AIR-Air New Zealand Limited

[Basil]

With all this postive chit chat  from the forums investment community, does it mean AIR is now a BB+/- BUY?

BBB Beagle Busy Buying?  No.  To me there are worrying signs that the initial revenue travel splurge is quickly waning and with huge amounts of foreign carrier capacity coming back onto N.Z. routes the rampant price gouging AIR has been engaging in, is quickly coming to an end.
Already they are back to the usual practices of heavy discounting to fill the much lower number of operational planes they have.

[Waltzing]

slow growth only then...  not up up and away...

[Waltzing]

some cut prices not everyday !!!

https://www.nzherald.co.nz/business/airfare-war-jetstar-launches-cut-price-domestic-flights/HCZ5UIKCFVEPZEQ6D2GYYJEZT4/

[Waltzing]

that means hopefully you can take more with you !! and you can be sure it wont go somewhere else where you arnt...

https://www.stuff.co.nz/travel/news/132010967/air-new-zealand-has-come-up-with-its-own-baggage-tracking-service

[BlackPeter]

With all this postive chit chat  from the forums investment community, does it mean AIR is now a BB+/- BUY?

Depends on the letters after the first B ; I am not buying

[Waltzing]

come on BP  ....  id say the world is not going to stay couped up in the cabin...

they are going to fly fly fly next year...and the next..

bali just got a plane load of Kiwis gone surfing... one group went for 3 weeks...

[BlackPeter]

come on BP  ....  id say the world is not going to stay couped up in the cabin...

they are going to fly fly fly next year...and the next..

bali just got a plane load of Kiwis gone surfing... one group went for 3 weeks...

Yeah - Neah.

While I sometimes invest in cyclicals ... I think the airline industry is too much of a magical rollercoaster ride for me.

1) I don't like roller coaster rides (personal preference)
2) I still more dislike rollercoasters where the track is likely to change or disappear during the ride.
    Too much Harry Potter.

Airlines offer both.

But feel free to invest - you might become richer ... or you might not.

[Waltzing]

Dont consider airlines to be anything other than trades...

In this case there may be a trade here for while.

 

[BlackPeter]

Dont consider airlines to be anything other than trades...

In this case there may be a trade here for while.

 

Fair enough. However - while it is inevitable to trade in order to invest (you have to buy at least once, don't you ...?), I don't consider myself as a trader.

I try to learn as well from other peoples mistakes. Warren Buffett invested a some years ago into airlines ignoring his own earlier advice. Big mistake when Covid arrived. Just one bend in the rollercoaster ride nobody predicted.

But sure - in the short run AIR may or may not be a good trade. Depends on where the tracks of the roller coaster are heading. I can't see them, though. Can you?

[Basil]

slow growth only then...  not up up and away...

Profits will peak in FY23 and drop away as competition heats up again.  That's how I see it mate.   It's also how the consensus analyst view sees it with eps dropping away from 12 cps in FY23 to 10cps in FY24 and then 9 cps in FY25. https://www.marketscreener.com/quote/stock/AIR-NEW-ZEALAND-LIMITED-6491407/financials/
Put a no growth PE of 8.5 on FY25 earnings of 9 cps and what do you know, we have fair value of 76.5 cps.
I guess it's a hold for modest yield if you like the aviation industry and believe another pandemic won't decimate earnings again sometime in the next decade.
Average dividend forecast for the next 3 years is only 5 cps though which gives a pretty modest yield of only 6.5%.
Food for thought.  Is that really enough for the very high risks in this very cyclical sector ?

[Waltzing]

Yes but the SHAZ doesnt buy by adding up the numbers do they? they may just see more AIR planes and more people travelling and go ... lets buy!!!

well  HLG might be a better bet at 5-80 6....

its going to be interesting seeing how they go anyway...

some good vol today and up a few cents... looks like a trade..

[Onemootpoint]

I do believe there could be some upside, short term or temporarily. So agreed. Good for a trade if that's the play. Too speculative as an investment per se for my book.

[Onemootpoint]

Meanwhile the competition is heating up on the traditional strong/ dominant AIR trans Tasman routes:

Qantas announces major boost to New Zealand services

https://www.stuff.co.nz/travel/news/132089934/qantas-announces-major-boost-to-new-zealand-services

This includes a new WLG/ BNE route. And for the plane spotters it will be operated by an Embraer 190.

[Waltzing]

There are some cheap $5000 business flights with emirates going for july.. over 24 hours to copenhagen... back 3 months latrer 40 hours...

[Waltzing]

How many engine types is AIR flying this year and proposes to run in the next cycle of its CapEx.

for example how 700's with which engine are being put into service and how many newer aircraft with newer fuel efficient engines are going to be flying.

Next gen 777 https://www.ge.com/news/reports/boeing-to-use-ges-powerful-ge90-for-next-gen-777#:~:text=The%20Boeing%20777%20is%20the,test%20stand%20in%20Peebles%2C%20Ohio.

It took 3 dacdes for TA to be refined for use in aircraft  engine design production apparently...

Turbines..

https://www.sciencedirect.com/science/article/abs/pii/S2214785319327191

https://www.youtube.com/watch?v=Sf6H8kSunRA

Carbon Fibre ...

https://www.youtube.com/watch?v=lapFQl6RezA