We do not live in a perpetual GFC that will never end.
Quote:
Originally Posted by
forest
Noodles, according to the ASB site the last 9 years had EBITDA margin at 14% avarage. Including the last 9 years were some years that AIR had minimal competition on some routes. Therefor I would not go above the 14% myself but no doubt some will strongly disagree.
Noodles took the current year's forecast and incorporated the next two based on consensus broker forecasts so he made some attempt to measure an across the cycle average arriving at 16.1% EDITDA margin whereas your approach is purely backward looking and incorporates all of the years of the GFC since 2007 By doing that, in my opinion you are effectively assuming the effects of the GFC are going to repeat themselves over and over again in the future. When people are experiencing financial duress during what is undoubtedly the worst financial crisis since the great depression of 1929 they don't spend up on expensive travel and naturally that has had a significant effect on AIR for many years during the depth's of the great recession. To suggest the effects of the GFC are going to be felt perpetually going forward and no attempt should be made to capture the peak of the cycle's earnings in FY16, 17 or 18 is...shall I just say "its an interesting viewpoint" and leave it at that.