Forum Archive Index - April 2001

["G Stolwyk" <stolwyk@wave.co.nz>]

 

 

Deidre,

 

Readers will know, that I have discussed AIA from time to time.

 

Investors have been asking why AIA,s  share price was not $ 4.0 at this stage.

 

It is highly likely that some larger investors knew about the failed airline not having been able to pay landing fees for two months at Wellington.

For a start, some staff would have known this and presumably, Infratil, the chief investor, will be well aware of this. The topic would have been discussed at their Board meeting!

 

It is therefore possible that much of any fall-out has already been factored into the share price of AIA.

 

AIA is a much stronger company and may well have received the landings fees, anyway, leaving Wellington and possibly CH-CH out of pocket. 

 

I believe that AIA 's projection of overseas arrivals is well below the actual numbers.

There is a lag of time between the fall of the $NZ and the consequent increase in tourism.

 

Tourist numbers for March -  and for the whole country - were 16% up on March last year according to official figures .

 

Therefore, much of the effect of the collapse will be negated.

 

I quizzed two brokers on their opionion, both think, that although there could some temporary problem, in the medium and long term AIA may benefit.

 

Much depends on the possibility of Quantas Australia operating here.

 

This company could be interested because it pays to "keep Air NZ weak " and also, because it would have better control of the NZ feeder routes to Australia. 

 

So, if the share price of AIA drops too much then it pays to buy some, I think.   

 

Gerry