Fascinating, thanks for posting. Maybe this Virgin stake is worth something after all ?
Noodles. Starting point for EBITDA margin has to be the ten year average in your original analysis 16.1. When then need to consider that this includes several years of the GFC which is arguably the most serious financial crisis since the great depression. We also need to consider going forward that AIR will have a very very young and fuel efficient fleet, for example the new Dreamliners require no heavy maintenance for the first 9 years. I would think if we took out the effect of one year of the GFC on the basis that the length and depth of the GFC was so severe its very unlikely to repeat going forward, some would actually say the current operations are still affected by the GFC, low world growth e.t.c., (travel is very cheap now in real terms) I would suggest taking out the 9.8 EDITDA of 2011 and replace with another 19.9 for FY19 the ten year average becomes 17.1%. Add another 1-2% because AIR will have one of the youngest most fuel efficient fleets in the world by FY19 and I think an average EDITDA of 18-19% is a reasonable assumption going forward.
Ten year average PE is 11 and we have interest rates at 60 year lows so maybe a slightly higher PE is currently warranted based on normalised earnings at normalised EDITDA margins.
Interested to hear your updated thoughts on CVT if you have the time in that thread mate.
All the talk by some people about how the world is changing to budget carriers...honestly I think you can discount all that as simply people speaking their own book in terms of how they fly.
As I've said before, there is no actual data to back up such spurious claims. Actual operating statistics show loads YTD are at close to record level's and yields are holding up extremely well considering how dirt cheap jet fuel is. By now most people who fly from time to time have had truly horrible experiences on sardine can budget carriers and most people have worked out you get what you pay for.