June operating stats summary
June is about your typical total pax month at 1056. Substantially more than May 892 - but well less than peak months of 1200+.
All % are pax growth yoy (revenue passenger kilometres) and Load factors unless otherwise mentioned.
total pax 2.3% improvement but still below trend of 5%+ for 2011 :mellow:
Domestic 3.2% w 80.7% LF - A weak result vs trend but LF is okay :mellow:
Tasman/Pacific 13.1% w 85.5% LF - Great result! Ash cloud benefits to AIR on display :t_up:
Long Haul overall (8.7%) - improvement from Japan offset by weaker performance for UK/USA :mellow:
UK/USA (6.3%) w 88.6% LF - disappointing growth :t_down:(why? people waiting to come for RWC instead?) Load factors excellent very very good capacity management. :cool:
Asia/Japan (8.9%) w 78.6% LF - improvement here beyond expectations and a good Load factor too. (capacity to Japan was significantly lower - matching demand) :t_up:
Asia ex Japan 1.0% w 79.6% LF - decent but below average ~3%. Good LF improvement from May. :mellow:
Yields:
Group - up 2% yoy :)
Short haul - down 1.7% yoy (prior were negative 3.2,2.8,2.6) likely this reflects selling high priced fares during ash cloud and unlikely to be sustained. :mellow:
Long Haul - up 4.3% yoy - have been consistent at 4.3%-4.6% for 4 consecutive months - 77W benefits here and good capacity management sustaining higher prices. :t_up:
Overall commentary:
A nice result with a great shorthaul performance due to the ash cloud. A poor UK/US balanced by some signs of improvement out of Asia and Japan that we have been waiting for. :t_up:
Rating 6/10 - A substantial improvement on the May numbers I thought were poor.
Domestic pretty steady as usual - nothing to write home about. Looking to a good Sep-Oct.
Looking forward I expect ongoing lower yields on shorthaul - price scanning reveals fares are really affordable (e.g middle of RWC return from sydney for ~$400-$440) and even Xmas and NY fares are pretty cheap vs what I am used to seeing from AIR. I expect Sh yields to average -3% over next few months at least before stabilising (when?). My hopes are that this is an indication that AIR feel the strategy is paying off (i.e lower yields + higher LF > higher yields + lower LF). It will be interesting to hear at the Results presentation how successful Seats to Suit has been in dollar terms though we may not get that info.
Longhaul was a bit sick overall this month and the deteriorating pax growth on US UK should be cause for concern. Japan still poor but good to see some turnaround.
updated analyst targets (post June op stats)
credit suisse - $1.34 (20% discount to valuation $1.68 reflects jet fuel yield and fx risks)
DB - $1.55
Mac Bank - yet to update.
AIR posted a net profit of NZ$81 million ($62 million) for the 2011 fiscal year.
What's up with the AIR SP? Their NTA/Share are worth more than their current share price!
So you can buy a share at $0.915 and own a company that has tangable assets worth $1.32 per share.
Their Dividend Yield alone is quite good at 6%, far more than the interest you would get at a bank!
And they are going to pay out very soon with a 2.5-3 Cent dividend in March. :t_up:
We need more buyers in NZ! Or is there something I don't know about.. (other than the slowly recovering economy!)