Here's the NZ Herald's report on the document: http://www.nzherald.co.nz/business/n...ectid=10881011
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Here's the NZ Herald's report on the document: http://www.nzherald.co.nz/business/n...ectid=10881011
Good for Bob De Groot i'd say.
It's never that cut and dry as"send maintenance to asia" in aviation. I've worked for several European airlines that tried it and it came back to haunt them with delays and extra costs out of heavy maintenance. If there's a delay in NZ you can shuffle a schedule. If it's in Asia and the next a/c is on the way,it's not so easy.
What will be,will be though. Better start looking for a new job in ChCh!
Go Jetstar!
I would have thought that Cullen Airlines would have waited until other operators had gained more operational experience with the 787 before having a clean-out of engineering and maintenance staff.
Going on the experience so far the long term future of this aircraft is questionable, and Cullen Airlines has signed up to buy it.
If the 787 turns out to be a dog Cullen Airlines may need more engineering staff than they planned to keep their old 767's and 777's in the air.
Boop boop de do
Marilyn
Oh, there's problems with all new aircraft types and the 787 is a leap in technology. It'll be sorted and hopefully a good aircraft.
The heavy checks have been extended from 5 yrs out till 10 years but we'll see how that works. Our not so old A320's have had significant corrosion problems in the wings. Of course this was also not envisioned.
After maintenance has gone watch for using Asian aircrew on Asian contracts. Once that has happened and a large portion of shares are sold overseas,what is the benefit to NZ from our national carrier?
from the herald today...
http://www.nzherald.co.nz/business/n...ectid=10883928
NZ Herald "Analysts bullish on partial sale of Air NZ"
Cullen Airlines has a couple of future vulnerabilities. What are Emirates going to do with their spare 777's when they replace them on routes with A380's?
Will customers desert if a competitor puts A380's on the Pacific?
787 Dreamliners have had a troubled introduction, will these problems be sorted by the time Cullen Airlines takes delivery of theirs?
Boop boop de do
Marilyn
PS. While I may seem to be down on Cullen Airlines they are in a better position than QANTAS or European flag carriers.
I noted with much interest that the PM in his Budget speech yesterday talked about increased funding for tourists from Latin America. I travel between NZ and Argentina every 6-8 weeks. The only travel option I have at present between NZ and Argentina is LAN via Santiago. Aerolineas Argentinas pulled out last year. So if you want to fly direct between Latin/South America and NZ, LAN in your only option. It is increasingly fully booked and increasingly expensive. So if the PM wants increased tourism between SA/NZ, which I agree with, we need more flights. Star Alliance is completely out of the loop between Australasia and South America.
Based on the above, I expect and wish for AIR to start flying from Auckland to Buenos Aires or Brasil. It would be a significant business for us and I reckon much more profitable route than the heavily competitive routes we are currently fighting on.
It wont be Cullen Airlines flying to South America iceman.
Because of the extended duration of such a flight over the Southern Ocean the rulz say that a four engined aircraft must be used. The only four engined aircraft in the Cullen Airlines fleet is the 747 which they plan to retire.
LAN use a four engined Airbus 340 on this route. This model is no longer being built leaving the A380 the only aircraft in current production available to fly this route. Whoever continues or develops this route may view the A380 bums on seats capacity as too great for the passengers on offer.
Boop boop de do
Marilyn
PS. Boeing are touting a 747 update called the 800 series. Reception by the market to this proposed update has been lukewarm so it is an open question whether Boeing will continue with the update.
Not so. With 240 ETOPS a two engine aircraft can do it albeit not in a straight line.
Also the 747-8 series is already flying.
http://www.lufthansagroup.com/en/com...a-passage.html
Flying and the freighter version is popular
Sorry to say Iceman but I understand that Air NZ's Chief Strategy, Networks & Alliances Officer (Stephen Jones) spoke last month to a South American focused Business group. Apparently he spelt out that AIR is not looking at flying to South America anytime soon. The main 3 reasons being:
1) Destinations - Santiago is already well serviced by LAN & Qantas (ex Oz). BA is serviced by Aerolineas ex Oz (I agree it is a very liberal use of the term serviced) and there is high economic risk dealing with Argentina whilst it rapidly goes broke. Sao Paulo is too far to reach directly and they are against flying two stop destinations. Lima is a possibility but that has the least demand.
2) There is no decent Star Alliance partner to feed onto in South America.
3) They don't have the aircraft type suited to fly there (which is this 4 engine vs 2 engine debate) and so would have to fly a more northern route (to stay within so many hours of land or something) and this is less economically viable.
Apparently they are not completely against it and they are continuing to investigate BA but there is nothing happening in the near future.
Thanks for that Anonymous. I had heard similar reasoning but it disappoints me, more for purely selfish reasons rather than as an AIR investor ! Aerolineas does not provide as service, they provide flights. They cut out Auckland last year and now fly only BA-Sydney as you correctly point out. I will not fly them between South America and Oceania anyway which leaves me with LAN via Santiago as the only option. The planes are nearly always full since Aerolineas pulled out of NZ. That's why I don't understand how the Government think increased tourism between NZ-SA can be increased if we don't have flights to cater for it !
Your point about Argentina's precarious economic situation is unfortunately very very valid and all to real
Not sure they could get the full 25% away with just a rights issue - It would require all shareholders to double their holdings.
I do think they will be looking to do something that doesn't require a full prospectus to so maybe a rights issue combined with an institutional book build?
Alternatively, they could do what the Ozzy government did with Telstra and 'sell' the shares to its future investment fund (NZ alternative would be super fund, but could split with ACC etc) who could manage an orderly sale over time.
Not a lot of new information in this article, but will post none-the-less.
http://www.nzherald.co.nz/business/n...ectid=10888007
"There has been analyst speculation that Singapore Airlines would be a possible partner to give Air New Zealand better connections into Southeast Asia and to Europe."
What additional level of co-operation would NZ be seeking with SQ over and above that which is already provided for, given that they are both members of the same alliance?
Code sharing would give a direct route out of ChCh to Asia.
I flew Christchurch-Paris return last week. Air NZ disappointingly had now decent or competitive Star Alliance options so I ended up booking SIA directly from their website. These code sharing arrangements like Air NZ has with Etidad or Cathay Pacific seem to be undermining the integrity and benefits of the Star Alliance in my view !
AIR has had a good run over the last 12 months. Any reason why I shouldn't sell at these levels and if so inclined, buy back in when the Gummint sells down? What I am contemplating is whether there is more upside prior to the sell down and what the price and effect of the selldown will be. Any thoughts?
The sell down may well be in 2014. It may also be a right issue or placement.
Analysts are forecasting earnings growth next year. This will put them on a pe < 10 (for fy13 and fy14). Recently analysts have been playing catch up. They have been consistently under-estimating earnings.
On a negative note, their last monthly report had a drop in RPK's.
I still hold. I am comforted by the resilience in the share price given the recent market correction.
I'm not giving advice. Up to you:)
Its tough to anticipate what the price or effect of the govt sell down will be so its not something I worry about.
What does have me concerned is the recent decline in the NZD, the strong NZD has been a key reason to own the stock, with that reversing I am no longer so keen and am going to start trimming.
As noodles also noted the April stats were a bit weak - my revenue growth assumption has been revised downwards too.
Specifically on the operating stats yield (year on year) fell from +3.8% in March to +0.5% in April and RPK growth fell from +2.8% to -0.8% so quite a bad result...
noodles - You'd be better switching to cash. I relate to your feeling, this really is an "enchanted" market.
Thanks noodles and modandm. Sold some yesterday with the upgrade news and holding the rest for the annual result. Just trying to time the cycle. Have taken good profits on the way up so not too worried.
Thanks for your responses
Cash!? That would mean paying off the mortgage. If my wife saw the mortage go down, she might want to upgrade the house... Or worse, renovate. I've recently brought some hnz. I might have a punt on wynyard. Lots of action on the aussie markets atm. We are seeing lots of downgrades. Some good shorting oportunities.
Yes from the delta of Ytd group yield each month.
Buying today :). Market due for correction after strong run (mostly just pe going up), air nz on the other hand pe has gone down so weakness in air is buying opportunity for me.
On the currency weakness have decided that will not effect fy13 or fy14 result and market likely too stupid to factor it in fy15. Stock is on 9x fy13 and less than 6x fy14 ignoring virgin worth c.30cps now...
I'm calling the stock at 175 post results and div so a good 25pct to come in near term. Seems the pattern now so sticking with it :D
Finally in stock news I read jet star is cutting nz capacity which is pleasing. I continue to be impressed by the strength of nz domestic and new a320s arriving now -first today- should continue to see some growth.
Op Stats out today.
Good to see that RPK's are back on track (up 3.7%) and ytd yield is stable after weak RPK's last month.
This is consistent with the company's forecast of being at the top end of guidance.
Any one else think AIR is currently a good buy? Potential for a serious uplift in share price heading to full year results and dividend? Also did that accident with ASIANA impact AIR NZ for their flights etc? possible damage to income?
I like the small buy and seller indication. The big firms are holding as they know of the good news to come. End of year will be very positive. AIR has a fantastic safety record and a great market position. Currently, they look solid... possibly in the best shape the company has been in for a long time. I expect that with the NZ dollar devaluing, soon there will be an increase in incoming travelers. With a great winter, lot's of snow... we should see healthy visitors numbers. Both national travel and international will be good. Thanks for that CJ, your right.
I hope that the fire in the Ethiopian 787 parked unmanned on the tarmac at Heathrow has a trivial, easily resolved cause.
Poor aircraft choices can cripple an airline and if Cullen Airlines was to ditch the 787 and go for the A350 they would have to go to the back of the order queue.
The other problem, if they persisted with the 787 they would have to keep on more engineering staff longer than planned to keep their ageing 767's and 747's in the air, until the 787 was satisfactorily bedded in.
Boop boop de do
Marilyn
NZ dollar weakness is a negative for AIR - fuel and aircraft costs are USD denominated. They do have hedging in place but it rolls of from about 90% to 10% over 24 months - a declining wedge. This has been mentioned before.
Continued Dreamliner issues are concerning - if delivery delays result FY15 could be impacted but n/c to this or next year.
That wouldn't be a problem for me MM. That means I would keep my job for longer..
Yeah. A necessarary evil that I fully inderstand. A dying industry. At least in the capacity we know it now. Aircrew will be next in time. Think drone operators..
For me it'll be back to study. Project management or quantity surveying.
Unless there is some financially sorted woman out there looking for a 43 yo solo dad!
Operating stats for June (last month of FY13)
A disappointing showing really - Group RPK down significantly. On the plus side its the cutting of underperforming Asian flights that have caused this. Anyway it reduces the top-line while my fuel forecast is based on company data which should incorporate route cuts (but may not). Yield materially weaker, and clearly so on domestic - but then again costs have been falling as a320 arrive.
Nothing to get excited about anyway - results out next month - could see a small beat, most picking earnings to come in at the top of guidance.
I was shocked at how poor the yield result was. It had dropped from 1.6% to 0.9% in one month. RPK's down as well. With higher oil prices and weak NZ dollar, fuel costs will also be a headwind for FY14.
I heard a quote recently... "Only ever date airline stocks. Never marry them". Well AIR.NZ, you are dumped(sold).
Same here. Also dated them for 18 months and sold after about 6 months and made a loss for tax purposes. Then bought them back again a short while later for .845c,.875,.88,.89,.90. Then sold them at $1 and then bought them back at $1.04, $1.05 and $1.13 and then sold them for $1.305 , $1.31 and got my money back pluss a couple of thousand. Am i a slut or what?
From WSJ
By Ross Kelly Airlines from Asia to the Middle East are building big stakes in Virgin Australia Holdings Ltd., making it one of the world’s most coveted airline investments and prompting expectations of a takeover bid.
http://si.wsj.net/public/resources/i...0729110606.jpgclick to enlargeVirgin Australia, the No. 2 carrier behind Qantas Airways Ltd. in one of the world’s more robust aviation market, offers a rare acquisition target for foreign investors angling for a piece of the action in Australia, which restricts foreign ownership of domestic carriers with international flights to 49%. Virgin, however, is fair game because last year it spun off its small international flights unit to enable it to attract foreign investment.
Singapore Airlines and Air New Zealand in recent months have both raised their holdings in the Brisbane-based airline, while Abu Dhabi-based Etihad this month gained Australian regulators’ approval to raise its position from 10% to as much as 20%.
And with billionaire Richard Branson indicating his 13% interest is up for grabs, another wave of buying may follow.
“We could easily see a situation where either two of the three airline shareholders, or indeed all three, issue a takeover offer for the company,” said Russell Shaw, Macquarie Group’s Sydney-based aviation analyst.
Control of Virgin Australia would offer immediate strength in Australia, where sunshine and beautiful beaches helped attract more than 5.5 million visitors in the year ended in June 2012. Increasingly, tourists are arriving from fast-growing Asian economies such as China.
Virgin is a domestic carrier, but the influx of foreign arrivals is funneling passengers into its network as tourists hop from city to city.
To be sure, it hasn’t all been smooth sailing for Virgin. In May, the carrier downgraded its profit guidance as Australia’s resources boom fades and fragile consumer confidence crimps demand for local leisure travel.
At 43.5 Australian cents (40.3 U.S. cents) each, its shares have almost doubled in value in the past two years, but in the most recent year they have gained only 5%, underperforming a 19% rise in Australia’s benchmark S&P/ASX 200 index. The shares remain 80% below their 2007 peaks—cheap by historical standards.
Singapore Airlines invested around US$125 million in April to nearly double its stake to almost 20%, while Air New Zealand raised its stake last month by 3%, to 23%, and said it would like to raise it to 26%. Companies in Australia that own 20% or more of another company can raise their holding only by 3% every six months without having to make a takeover bid.
A spokesman for Etihad said the carrier “may purchase available shares to increase our shareholding where it is prudent to do so, and will provide notice in accordance with regulatory disclosure requirements.”
Speculation about a tussle for control of Virgin intensified this month after unusually large blocks of its shares were traded in Sydney. The identity of the buyer or buyers remains unclear.
Air New Zealand didn’t respond to requests for comment.
A Singapore Airline spokesman said, “At this point we have no plans to increase our stake beyond 19.9%.”
The presence of three rivals with significant stakes will make any takeover hard to pull off. But analysts at Macquarie say a joint bid is possible.
Shaw said Singapore Airlines and Air New Zealand are the most likely partners because they are both members of Star Alliance. And while they don’t now have a strong bilateral relationship, Air New Zealand’s search for alliance partners in Asia could bring them closer together, he said.
The most challenging relationship to forge, Shaw said, would be between Singapore Airlines and Etihad, because both carriers serve Europe from separate hubs and would compete for Virgin passengers heading there from Australia.
A Virgin Australia spokeswoman said the company doesn’t comment on speculation regarding its share register.
Simon Marias, managing director of fund manager Allan Gray Australia, also believes a takeover bid is possible but is quick to point out the obstacles. Allan Gray, which manages around 2.5 billion Australian dollars (US$2.3 billion) of client funds, doesn’t hold Virgin shares but it does own around 5% of Air New Zealand.
Marias said a joint bid would risk involving Australia’s competition regulator, which has already expressed concerns about the consolidation taking place among the nation’s carriers. Earlier this year, it allowed Virgin to acquire a controlling stake in budget carrier Tiger Australia only because the target was likely to disappear from the market altogether without an injection of fresh capital.
“One airline could take a much bigger stake [in Virgin] and make an offer to the other minority holders. But the size of their blocking stakes would make that hard to achieve,” Marias said.
Why the AIR drop?
I think it is likely the poor Ops stats for july.
See my previous post.
http://www.sharetrader.co.nz/showthr...l=1#post418567
The price was 1.47 at time of posting. I know this because i sold out.
Maybe. A note from MQ following a call with mgmt suggests poor weather resulting in a large number of cancellations and refunds during the period was a factor in the stats. Even so one month of poor stats doesn't change the investment case. A 1c move in the currency has more impact and the currency has fluctuated between 82c and 78c wildly over the past month or two.
I will go into more detail later this month, but I remain a buyer.
I wouldn't mid seeing some detail provided by AirNZ on the increase in revenue directly derived from their loyalty and Oneup schemes. There has been an immense amount of investment into these by the Airline, so one would hope that this is paying off.
Yes that would be most useful to see how that is working out, and whether upgrading people allows more economy seats to be sold. I just used up all my airpoints and got a OneUp upgrade to Business Class for a trip this week, and when I went to choose my seat, there were only 4 other seats booked in Business Class. About half of economy was unfilled as well, so I'm not sure how much revenue is gained from this - it certainly has a lot of potential though to help fill seats at last minute. I got a great deal anyway! Maybe my flight was not very full anyway, but it will be interesting to see how many seats are taken when I board.
Modanim, glad to hear you are still a buyer, I bought back in recently, I valued your research.
Regardless of whether I make any money out of AIRNZ, I've decided they are a great NZ company
and an airline we can be proud of.
Food4Thought asked; "Why did AIR drop?"
Maybe this announcement from, their twenty something percentage holding in, Virgin.
http://www.asx.com.au/asx/statistics...idsId=01431214
Memo to State Owned Enterprises Minister Tony Ryall, sell Cullen Airlines to Ethiad now.
Boop boop de do
Marilyn
Again could be - but I doubt it. So far the valuation the market places on AIR has given absolutely no credit for the investment in Virgin, which is roughly 30c NZD per share at the current VAH valuation.
NZ management are clearly thinking long-term with the stake in VAH, which is frustrating for me in the short term! Post results I hope to get a 1-on-1 with the CEO or at least CFO to raise concerns that NZ is not doing enough to reward shareholders, why not further raise the dividend, why aren't they buying back shares?
On a medium term view - say 3-4 years I think there is a good chance NZ and VAH will merge. In the mean time the NZ govt should be pressuring management to get the share price up to a fair level, before offloading some of the govt stake. I see this offloading as a catalyst for more institutional investors to look at AIR, and likely a strong improvement in the share price. AIR trades at a substantial discount to other listed peers on most metrics, and has a better competitive position than others like Qantas, which faces not only a growing domestic competitor but a multitude of competitors on almost all international routes.
Regarding Etihad buying a stake in AIR - I don't think Etihad would want to. NZ can't provide good feed for their network when there are numerous 1 stop options to Europe via asia or the US. Actually I see Etihad quite worried that NZ VAH merge with SQ a significant stakeholder - sending Australian feed through Singapore. Etihad are a bit mad honestly, they are so late to the party on the kangaroo route, and why you would want that business anyway with the growing Chinese airlines looking ever threatening on it I have no idea. Etihad would do better to focus on the Europe/Eastern Europe/subcontinent/Central Asia/West Asia. Which is what it is doing with the likes of Jet and Jat airways (india and Serbia).
Its a good question so I asked it a few months ago. Apparently this revenue is recorded as normal passenger revenue (not ancillary revenue) and therefore the impact of it is reflected in operating stats. Apparently CC fees and f&b purchases and seat selection fees etc are the ancillary fee revenues.
personal note...
just returned from trip to london and east europe flying as cheap as possible: virgin Aus, etihad, ryanair, easyjet.
never ever again. Anybody over 5'5" would be acutely uncomfortable. 'Economy' on these planes is strictly cattle class.
etihad food and cabin crew good, but the plane designed for midgets who don't need a loo more than once every 15 hours. I think only four for economy...
Sydney-AbuDab (13-14 hours) absolute agony.
in future it will be AIR all the way.
From Chch to London? And at a comparable price? I thought Air had the largest seat 'pitch' (distance between seats) around for Economy?
NZ is still an attractive destination for the Chinese traveler, even after the baby powder scare. I don't see every Chinese student all of a sudden packing up their bags as NZ now isn't a safe and reputable place for them to study. Their loved ones will still come to visit. The destination is still a great destination and the numbers arriving by AIR won't drop. The up and coming AIR report will be mighty fine. I love it how the price has dropped back on AIR share price, prior to some serious good news for investors. Perhaps these guy's who are selling are also the people buying into RAK at the moment?
AIR a bit stale for discussion at the moment?
Took the opportunity to buy on the dip at 1.36, 1.37. The annual result not far away should give the share price a shunt IMO
In good news for AIR, VAH and QAN, United will downgage their 2x747 flights to 777-200ER from 1 April 14. This is 105 seats per flight or 210 seats per day between Australia and the US.
If you assume 75% load factor thats about 75 to LAX which will mostly go to Qantas and Virgin - maybe 10 to Air NZ (as star alliance)
To SFO these should mostly go to NZ as Qantas and Virgin dont fly there. so +50 seats a day! This should support NZ's ambition to fly 777-300er aircraft daily to SFO next year. This year it has been a mix of 747 and 777-200ER, between 5 weekly and daily.
It also should support NZ launching further services to the US - NZ really are well positioned on the trans-pac, they have the right aircraft, and the right product. US carriers with higher cost bases are not a threat - and they would rather focus on the south american market where fares are high. VAH/Delta are stable, QAN is stable. Only threat is Emirates launching AKL-LAX, not sure if they would be allowed to or wherther they would want to - It would be a strategic departure.
Unstoppable! NZD on the up again! 10 days to results! Will post something a bit more thoughtful in a few days after July operating stats.
http://blogs.crikey.com.au/planetalk...ralia-flights/
Operating stats
Nice results to start the year RPK growth of 2.2% and yield of +0.9% equals pax revenue growth total of 3.1% for July.
All parts of the network firing except Asia where they cut capacity by 25% year on year (HKG-LHR). Very strong demand on routes to the US saw load factor over 90%. A good performance from short haul.
Yields were -1% short haul +1.8% long haul so overall about +0.9%.
For reference my base case estimate for PAX revenue growth for FY14 is 2% so we have started well ahead of that.
Fuel hedging disclosure
Fuel consumption reduced by $11.5m on updated volume. Also they have been locking in hedging at below market price due to backwardation in the forward market. A decent chunk of hedging in the 102-105 bbl range (brent). Looking at the jet refining spread $15 bbl is a conservative assumption based on recent range. That means I revise my fuel costs for Q2,Q3 and Q4 from 125 USD bbl to 120 bbl. Q1 remains 125 bbl.
FX has been quite volatile recently 78-81c - I leave my FX estimate at 80c.
Total effect is a decent reduction in my estimates for FY14 fuel expense. (to around 1096m NZD).
Model and target price update (pre results)
Based on the above changes I expect 25c EPS for 2014. My target valuation for 1 year ahead is $2.50 based on a historic P/E of 10x, or 9x + 25c for stake in Virgin.
I believe the multiple chosen is supported by the prospects of further earnings growth of 20% to around 30c EPS in 2015, as 5 new aircraft (777+787) arrive at the end of FY 2014. (this is based on current fuel and FX estimates). We should see good capacity growth support 5-10% pax revenue growth in FY15 - (777-200 refit also a tailwind as is more A320 domestic).
Air NZ is in a sweet-spot for the next 3-4 years. The usual caveats with airlines apply - I am satisfied with the margin of safety here, and it goes without saying am heavily invested. Most recently I topped up to the tune of 200k at $1.45.
Short term and comment on Full year results (due Thursday)
Recent guidance has been provided suggesting top of the range (around 17c EPS) and that this is after the cargo penalty of $7.5m. Estimating closer than that would be pointless. I am looking forward to seeing progress on cost reduction. Recent reports suggest good progress is being made. My model features higher costs than some analysts such as Macquarie, so I hope results give me scope to reduce and increase my FY14 EPS number further (lets see).
Consensus has the full year dividend at 4c. I would be disappointed by this but NZ has been spending on new a/c and more shares in VAH.
Elsewhere it will be interesting to hear when they think 767 retirement will be, some suggestions they might stick around longer to enable higher growth in FY15. Maybe a bit of an anti-climax for me generally, I don't expect much on strategy etc (its all well known). Although a 300% increase in profit shouldn't be an anti-climax - I'm sure the media will have a field day. Lots more to come for this stock - happy holder.
And this is a disgrace.
Air New Zealand to axe up to 180 jobs
Last updated 10:44 23/08/2013
Air New Zealand has told staff it will cut up to 180 engineering jobs next year as it closes an aircraft maintenance facility in Auckland.
The closure has been blamed on the loss of third-party engineering work, the retirement of its Boeing 767 fleet and an inability to attract replacement work, due to the high New Zealand dollar.
The facility will be closed by July 2014.
The Engineeering, Printing and Manufacturing Union (EPMU) has entered a consultation process to try and keep the jobs in New Zealand.
"The confirmation of job losses is devastating for our members and we will be doing everything we can to protect jobs," EPMU assistant director of organising Strachan Crang said.
Air New Zealand is also proposing to outsource the upgrade of its Boeing 777-200 fleet.
"The EPMU wants this work done in New Zealand and we are committed to working with the airline to keep our members employed," Crang said.
He said the EPMU's engineers were working hard to remain productive.
"Over the past three years they've delivered productivity gains in the double figures but this has all been eaten away by the high value of the New Zealand dollar," he said.
"New Zealand has world-class aircraft engineers but unless we see action on the high dollar this highly-skilled, well-paid industry will continue to decline."
During the 58-day consultation process the EPMU will have the chance to study the business case and suggest an alternative proposal.
The news follows recent job losses at the Christchurch Engine Centre, Safe Air and Air New Zealand Technical Operations.
- © Fairfax NZ News
I think Disappointing is the right word. You cant expect them to keep open an uneconomic business. I guess the question is why dont we try to become the service centre for the new Boeings - aren't we some of the earlier purchasers?
Not sure on the facts of the ERA case but assume they wanted them opened so they could prove that the person wasn't really sick - If the employee takes the company to court, the full discovery should apply.
Re the restraint of trade, again not knowing all the facts but they should have won. You have a restraint of trade in a contract for a reason and if an employee goes to the only other NZ airline (your only competition!), I would think it should apply. The fact that he had also been sent on gardening leave should be irrelevant. A restraint of trade isn't a standard contract term so he must have agreed to it (more common as you get senior but then you are negotiation that contract anyway).
As I see it CJ they have the upgrades to the 777-200's to be carried out over the next 18 months. This could still be done here, employing New Zealand workers. Natural attrition over that time would reduce the number of redundancies and give those affected more time to cope with the situation and reorganise their lives.
New Zealand Inc gains and this should be what all big employers should consider. So not to is a disgrace.
Speaking from experience in a similar incident, as an employer you cannot legally stop an employee from being gainfully employed in their area of expertise, despite what is added into the contract. What you can do is set reasonable terms and conditions for when an employee moves on, however requiring 6 months gardening leave with a further 6 months restraint of trade is quite frankly unreasonable and downright gratuitous, especially in a country with very little alternative employment choices in that industry. The court has rightfully (IMO) recognised this fact.
If however the employee takes and disseminates confidential information or trade secrets (e.g. AirNZ's strategic plans), then AirNZ would still have a case. That helps to provide a fair an equitable balance between the employee and the employer.
They had already fired the woman so no need for this as evidence
Restraints are fraught with difficulty especially if you are trying to hold a person beyond 6 months.Quote:
Re the restraint of trade, again not knowing all the facts but they should have won.
They are chewing through a fair bit of cash in their legal department.
...can't wait for the fulll year report. AIRnz is looking great
Accept your points. Normally RoT are only for a very restrictive area - depending on teh business, it could be as small as not to set up in competition in the local neighbourhood. From the little I read, I understood the guy knew company secrets and I guess this point was disputed (being the secrets he held, would have been public by then - ie special fares and promotions). If he was a pilot/engineer, I agree a ToT coudn't be applied.
Note that the Gardening leave is just them serving out their notice - ie paid but not having to work (not everyone knows the term so just clarifying).
She was (I assume) disputing that sacking, hence why full discovery was needed.
Go back to russia you bloody communist!
We live in a capitalist society. Air NZ owes an obligation to its shareholders to maximise profits. In this case is not blatent or hard nosed - there is simply no work for these people with new aircraft.
I have absolutly no time for this sort of rubbish social commentaty on this (an investment) forum, take your bleating somewhere else! Where are the mods on this forum...
Whats a disgrace is the reporting and the unions trying to score political points. I'm an engineer at air nz. We have two unions,EMPU and AMEA. Everybody(who doesn't have their head up their a***) has known for years this is coming. The 787 needs 10 year heavy checks,not five. The old aircraft are getting phased out from all fleets so there is no work out there regardless of the exchange rate.It'll cost 12 mil extra to do the upgrade work in NZ and would give the workers an extra year of work before the inevitable happens. The company put a very good offer to the employees for their collective.If it was accepted the work would be done in house. The hook was it had to be agreed so there would be no industrial action while the upgrade was on. The EMPU took it to it's members. 78% voted in favour. The rest want 20% or they'll chain themselves to the gates! Lol. The AMEA lawyer(husband of the secretary) deemed it an illegal offer and refused to take it to the workers. IDIOT. 50 workers in my hanger alone quit AMEA. As it wasn't ratified,the company did what they said and are taking the cheap option and putting the work overseas. The AMEA is now calling it the companies/national fault. I can assure you very few workers are blaming the company.
Anywho, over 140 workers in AKL are over 65 and 40 over 70 so hopefully they do the right thing and fall on their sword.
The world turns,things dont stay the same and companies evolve or die.
Modandm, I guess that is what you saying and I agree , but a bit of sensitivity mate. Thats 180 paychecks not going to feed families.
Thanks for sharing this slimwin. I do recall you told us on this forum not long ago that this was coming. I am shocked to read the detail as you have explained it here. Where is the media and why don't they rip into this a bit more and get the real truth out ?
As for modandm, I will come to his defense as his posts, especially on this thread, have been extremely valuable. His most recent post was out of character and I just put it down to him having had a hard week or a hard Friday arvo !
Thanks Slimwin - a very interesting post. It's good to hear the other side of the story. I have heard that the airline would look to redeploy some workers; what roles do you think they would fit into?
Aircraft efficiency does come with some other costs unfortunatly, doesn't it!
It'll be a unified workforce that copes with the light and heavy maintenance. Makes sense to me. New positions will be created to do this but of course there will be net loss.
My hat goes off to modandm. I quote his figures at work to gain cred at the coffee table! I certainly wasn't having a go and hope it didn't come accross as that.
No surprises that the NZ media just quoted the unions press release as gospel without bothering to find out the whole story.
Thanks for that insight slimwin. I can get quite defensive of the airline - labour relations are always difficult but NZ has done a good job of building a good culture and I hate to see misinformed commentators jumping to criticise. No doubt will be more labour/green garbage rolled out this week when the airline announces a profit (albeit a modest return on assets invested) - didn't hear much complaining about AIA and the 'yield improvements' in their parking operation supporting another record year of profits... makes me sick.
Lets hope the union pulls its head out. Not many companies would bother negotiating considering the prospect for $12m of saving by sending offshore - my feelings are a bit mixed. On one hand its the right thing to do, and on the other $12m is a lot for industry where profit is hard to come by. The long term thinking of management in doing the right thing through challenges like Chch and this is commendable and a strong culture has permeated the airline (much unlike at Qantas). Overall this is value enhancing for shareholders.
The Aussie unions sealed the fate of Qantas heavy maintenance. No surprises nearly all the union reps at work,on my base anyway, are English or Australian. The default mode for this tired union model is confrontation regardless. The last three negotiations the company has made good first up offers as opposed to start low and meet at the middle. It makes the unions a little redundant and I wonder if they are feeling like that.
I hope for the guys in AKL that they snap out of it. That extra years work would make it a whole lot easier for guys to plan their future. I'm sure many will take other jobs over that period and lesson the need to actually sack many people.
Last chance to buy before results come out tomorrow. Any takers?
Apparently not *shrugs*. Tough crowd. I've got mine already.
Bulltrap, you know it, I know it, the analysts know it... tomorrow will be a fruitful day and I shall give you a virtual ~~~**** Hi 5! ****~~~
Suckers not buying in at this level... anyway... the non believers could probably still get on the plane last minute if you are ready for a quick take off...
Can't Share Trader add a "Like" feature?
Anyone have an idea of what the results tomorrow will look like?
best you hold onto your socks if you own some...
I outlined expectations on page 61. 17c EPS, 4c Div and around 260m in normalised pre tax profits is expected. Guidance to this was recent so don't expect massive difference. Hope for a bigger dividend, good progress on cost savings and guidance that forward bookings look strong.
Consensus for FY14 is 290-315 and I think this is low and it should be 350-380 therefore guidance will be key.
Lets see
Air New Zealand profit more than doubles
9:03am, 29 Aug 2013 | FLLYR
Air New Zealand today announced earnings before taxation of $256 million for the 2013 financial year, an increase of 172 percent on the previous year and the company’s best result in five years.
The net profit after taxation was $182 million, which is $111 million or 156 percent up on the previous year.
Operating cash flow was the highest ever at $750 million, and the company reported cash holdings of $1.15 billion. Gearing improved seven percentage points to 39.1 percent, a record low for the airline.
A fully imputed final dividend of 5.0 cents per share has been declared, taking the total dividend for the year to 8.0 cents per share, a 45 percent increase on the previous year.
Chairman John Palmer says the result places Air New Zealand amongst the best performing airlines globally. “We are focused on further improving on this result in the 2014 financial year. Based on the airline’s forecast of market demand and fuel prices at current levels, early results and forward bookings are encouraging.” he says.
“This result is one that investors, Air New Zealanders, customers and our nation can be proud of. It marks the start of an exciting new phase as Chief Executive Officer Christopher Luxon and his management team drive their Go Beyond strategy to grow the airline,” Mr Palmer says.
“Strong results allow Air New Zealand to reinvest in its products, services, training and development to further enhance the customer experience and to connect more people and businesses than ever to, from and within
yay on the dividend!
Will post in detail in a few days once I have been through in detail but all looks healthy and as expected.
Will be tuning in for the call at 10:30.
Will be interesting to see the markets reaction - given whats going on in Syria it may be quit muted. Who really knows - anyway at first look the result looks fine to me.
Again yay on the dividend! :D Huge check coming for me!
Pretty happy with those results
When are AIRnz/Virgin launching a NZ initiative to get people to outer space? The new word on the street is Richard Branson couldn't find a better location then NZ to launch some space flights...
not as good as i expecting.. the share prices were static..i was thinking a big jump
Just wonder if people are a bit spooked about the proposed partial sell-off and the desire of the govt to keep share price attractive - particularly given the debacle of MRP.
Or more like have an eye on the price of oil.
Not concerned about lending $40m unsecured to Virgin Australia?
Lending money to the company you own 20%(?) of and,more importantly, are carrying the fight for you on domestic aussie routes. Perhaps there's some strategy in there somewhere.
Could be a combination. A good result ahead was hardly a secret either so perhaps priced in for now. Lets see where it is in a few months.
I'd say the prospect of a sell-down is keeping the share price low - some may be simply holding out for a discount or for less uncertainly, others may be actively trying to beat the price down (who knows?).
The government should just ignore the share price, and price the offer at fair value with a two-month application window. If they're left with a pile of unsold shares at the end, well fine.
Or they could just sell their entire holding to the highest bidder. It's not like having a state-owned airline is part of anyone's grand plan.
(And this is from someone who's against asset sales - of national infrastructure, that is.)
Yep. And a show of faith in them. They've just laid out a lot of cash in upgrades to the fleet. Not sure when there next big cap ex but you'd hope a few profitable years in the intrim.