This from your Rodger, you are a great example of adaptation, just like customers are adapting to the new price points. Also if a time comes to increase fares what happens....Quote:
Yes and last months Op stat's weren't especially flash either. Was catching up on some back programs of Madam Secretary last evening and normally fast forward through the adds but did notice that earlier this month they had an Asia sale and their special was $599 each way to Hong Kong, (this week in yet another sale to Asia where their loads are barely making money at only 72.5%) those same fares are now only $499 each way. I believe this is indicative of the yield pressure as airfares to Vietnam were also only $499 each way...It would appear they are struggling to fill the plane to an acceptable level on some routes.
When Cathay Pacific came out this week and said their yields are under intense pressure that has to be a bit of a concern too, note their average load factor is running at just over 85%, a load factor AIR can only dream about on their Asian routes at present.
Special fares by all airlines have been the norm now for many, many months and consumer fatigue regarding same was a hot topic at the recent international IATA conference as reported on CNBC. AIR's recent load factors despite frequent sales at very attractive prices supports anecdotal evidence that the consumer is generally "getting used too" cheap travel" and doesn't react as strongly to new sale initiatives. By way of example, you can jump on www.grabaseat.co.nz right now and bear in mind this daily special has been up on that website all day and there's hundreds of seats left to LA for only $473 and you can get back for as little as $467. (Thousands left to Hong Kong and Vietnam). These are extraordinary fares for a flight of that distance and yet consumers are not hovering them up with any great appetite like they would have months ago before they were bombarded by cheap fares by all and sundry. It gives the keen observer and inkling of the current yield / demand environment in which AIR operate.
CNBC reported that New aircraft orders at the recent Farnborough biannual airshow were well down on the last show, airlines appear to be becoming more cautious as consumers become more blasé about cheap travel.
Disc: Took some money off the table in regard to AIR this week at $2.24. Still holding some. I think company guidance for 1H FY17 (which will most likely be forthcoming at the annual meeting in just over two months time) may disappoint some investors.