I think we have the answer for the downdraft in share price.
A little bit of analysis showed mikey that domestic yield for March was 7.6% lower than March 2015, Tasman yield was down 9.3% and long-haul down 0.3%. This is yield falling off a cliff.
Good post mikey.
Big Picture - Reality Check
Quote:
Originally Posted by
mikeybycrikey
Reading the posts here over the past week, it seems to be a series of people trying to catch a falling knife. Something that I learnt not to do after I started reading ST (but often struggle to do).
I finally decided to do a bit of analysis on the operating stats. I have been expecting that AIR might reach the top of its rise at some point so thought I should understand the data that AIR publishes every month.
I threw the operating stats for the past three years into a spreadsheet and tried to understand them. I hadn’t thought too much about the drop in short-haul yield from -0.2% to -1.2%... then I read that this is the change in financial YTD yield compared with the same period in the previous year. Not just monthly change in yield but financial YTD change. Hmmm. 9 months into the financial year, a small change in YTD yield could lead to a big change in monthly yield.
A little bit of analysis showed me that domestic yield for March was 7.6% lower than March 2015, Tasman yield was down 9.3% and long-haul down 0.3%. This is yield falling off a cliff.
Obviously there is a large potential for this to be inaccurate since I’m inferring a lot from very little information and I’m not even 100% sure what all the terms that AIR use actually mean. But this a significantly larger drop in yield than in the past 3 years.
This is a bit of a concern and could have something to do with the latest drop in SP. Airlines operate on pretty thin margins and a drop in yield of this size (if I'm correct) is potentially a big problem, even with the low oil price.
YTD yield is down 1.2% average in $N.Z.(their reporting currency) across the network on RPK's flown which have grown at their fastest rate in the airlines 76 year history.
Did people really expect that yield would be up when they've got something like an extra 15% YTD extra capacity to fill and at a time when jet fuel is the cheapest its been in many many years ?
Did people really expect if QAN got belted down a whole dollar AIR would escape any fallout ?
We all know Jetstar's regional expansion would have some effect on domestic yields...surely this is not rocket science and something that the market already understands !
I know some of us would like to forget the world cup cricket last year, (well certainly the final) but the fact remains that boosted last year's traffic at this time of year and yet load factors despite fast route expansion have held at record high level's...surely a encouraging factor ! I'd suggest the timing of Easter is irrelevant.