AIR-Air New Zealand Limited

[Waltzing]

the dividends tell the story of global inflation and also NZ economy?

Ai review to come will publish... may not be accurate.. what does MR AI have to say..

https://claude.ai/public/artifacts/882e20e5-194f-4e11-9433-877eaf14e7ec

Air New Zealand's operational reality reveals the true depth of NZ's economic weakness, and suggests professional GDP recovery forecasts may be optimistic:
What AIR's Results Actually Show:
Domestic Demand Collapse:

Government travel "particularly soft" (public sector cuts biting hard)
Corporate bookings only showing "early signs" of improvement (businesses still cautious)
Need to raise fares 5% despite weak demand (pricing into recession = desperation)
Domestic revenue under severe pressure

Real Economy Indicators:

Revenue growth: +0.15% (essentially flat in nominal terms = real decline with 3% inflation)
Had to cut 4% capacity due to engine issues, yet couldn't fill remaining seats
Load factors under pressure despite reduced supply
"Subdued domestic demand" mentioned repeatedly in guidance

GDP vs Reality Gap:
MeasureOfficial GDPAIR Reality Check2024+0.5%Revenue +0.15%, profit -14%2025 Q2-0.9%"Soft domestic market"2026 Forecast+1.7%H1 earnings ≤$34m (vs $155m H1 2025)
Why AIR is a Better Indicator:

Real-time: Airlines feel demand shifts immediately (forward bookings = leading indicator)
Discretionary spending: Travel is first thing cut in downturn
Business barometer: Corporate travel reflects business confidence
Government proxy: Public sector travel shows fiscal reality
Consumer sentiment: Leisure travel reveals household finances

The Discrepancy:
RBNZ projects recovery to 2.3% growth by 2026, but AIR's H1 FY2026 guidance (earnings similar to or less than $34m) suggests:

Consumer pullback continuing
No business spending recovery
Government austerity intensifying
Recession potentially deepening

Conclusion: AIR's ~50% earnings collapse from H1 2025 ($155m) to H1 2026 (≤$34m) suggests NZ's economic reality is materially worse than RBNZ's baseline forecasts. The professional economists may be underestimating recession depth and overestimating recovery speed.
This is why the Bear Case scenario ($0.52-0.68) has meaningful probability.

Impact of Engine problems.

https://claude.ai/public/artifacts/666887f8-01ee-44b4-9d81-23e70b3021fc

[Basil]

https://www.rnz.co.nz/news/business/575151/sharesies-platform-reports-record-turnover

One of sharsies customers favorite picks.  Interesting article in the Headliner investment newsletter recently.  HUGE problems with engines and aircraft out of service and those issues are not set to be rectified anytime soon.

[Shareguy]

https://www.rnz.co.nz/news/business/575151/sharesies-platform-reports-record-turnover

One of sharsies customers favorite picks.  Interesting article in the Headliner investment newsletter recently.  HUGE problems with engines and aircraft out of service and those issues are not set to be rectified anytime soon.

Does not surprise me in the least that it's a top Sharesies pick.

The engines issue is largely outside their control. However Foran made the decision during lockdowns to park the planes in the desert and have mass layoffs and not answer the phone or communicate with customers. They were dishonest in the handling of refunds and got caught. This has cost them a lot of loyal customers.

They droped the ball big time unlike some other airlines who used the time to modernise their fleets. There is a lot of competition that offer a superior experience with in some cases better prices. When you take out the fact that they are largely surviving on customers pre flight cash, how solvent is it.

In my opinion the government should sell out. The sooner the better.

[Left Field]

Ouch for holders.....significant downgrade

https://www.nzx.com/announcements/461180

Outlook
 
 Taking the above factors into account, Air New Zealand now expects a loss before taxation for the first half of the 2026 financial year in the range of $30 million to $55 million. This assumes an average jet fuel price of US$85 per barrel for the period. The airline cautions against extrapolating first-half guidance across the full year, noting that additional capacity growth is planned for the second half. As a result, traditional comparisons between first- and second-half performance may be less indicative of full-year trends for the 2026 financial year.

[Shareguy]

Just been listening to the new ceo on the wireless. Made the comment that in hindsight was not a good move making a lot of the skilled staff redundant during covid. He gave the example of engineers who take 6 years to train. There is a travel boom with many of Air NZ'S competitor's making substantial profits. Air NZ have a lot of work to do to regain customers. Thought the new ceo sounded good, time will tell.