Forum Archive Index - May 2001

[Greg <g&jelliott@xtra.co.nz>]

Matt, the group has cash in the bank (2001 Interim Accounts list $700m cash
balance at end Dec 2000). But, as Snoopy has previously pointed out, it
wouldn't be wise to burn this all on a fleet replacement programme,
particularly given the state of competition. They will probably be looking
at various options, including lease, and perhaps involving something clever
with SIA.

Greg E.

> From: "Matthew Van Veen" <mattvanveen@hotmail.com>
> Reply-To: sharechat@sharechat.co.nz
> Date: Thu, 03 May 2001 17:55:49 +1200
> To: sharechat@sharechat.co.nz
> Subject: Re: [sharechat] Airline shares
> 
> One thing that hasn't been mentioned on this forum today is I am sure I
> recalled CEO Toomey yesterday when discussing the possible talk of
> discussions with Impulse, AIRNZ had $600m in cash reserves. Anyone of you
> airline analysists have an idea where this money is from?
> 
> Matt
> 
> 
>> From: "Andrew Dengel" <adengel@clear.net.nz>
>> Reply-To: sharechat@sharechat.co.nz
>> To: <sharechat@sharechat.co.nz>
>> Subject: Re: [sharechat] Airline shares
>> Date: Thu, 3 May 2001 15:47:44 +0930
>> 
>> Thanks for your comments Snoopy, very interesting discussion from everyone.
>> 
>> One thing I feel I have picked up from all these analysis and opinions on
>> Airlines (and the relative politics involved)  is.............
>> I dont think I want to invest in one!! ;-)
>> 
>> Andrew
>> disc: hold no airline shares and dont think will be for some time
>> 
>> ----- Original Message -----
>> From: <tennyson@caverock.net.nz>
>> To: <sharechat@sharechat.co.nz>
>> Sent: Friday, May 04, 2001 12:53 AM
>> Subject: Re: [sharechat] Airline shares
>> 
>> 
>>> Thanks Brian, Greg, Andrew and Peter for your useful comments on this
>>> topic.
>>> 
>>> Greg, perusing 800 articles and coming up with the reasoned
>>> conclusions you did would put many pro analysts to shame, so you
>>> need not apologize for not being one.  I was interested in your
>>> bracketed comment
>>> 
>>> "(the SAAB is a reliable work horse on existing
>>> routes but they could do with 2 more, also more ATRs
>>> and focus on the shorter main trunk routes, and focus
>>> the Beech 1900s on the short provincial routes)."
>>> 
>>> Now it seems to me that you are suggesting larger planes are needed.
>>> Yet back in the early Air New Zealand domestic days, did they not run
>>> Fokker Friendships (around SAAB capacity) on these routes, a plane it
>>> would seem in hindsight was too big to be economic?   So I am curious
>>> at your reasoning behind this statement.
>>> 
>>> Further, I am also curious about the situation with code sharing and
>>> international landing rights.  Now I understand the usefulness of Air
>>> New Zealand using a star alliance partner to fly into London, rather
>>> than a half full plane of their own.  But this doesn't mean they have
>>> given up their landing rights into Heathrow, London does it?   Or did
>>> they never have landing rights there, was it only to Gatwick the
>>> other London Airport?  But if Air New Zealand aren't actually flying
>>> any of their own planes to London, and have no future intention of
>>> doing so, just what rights is Helen Clark talking about negotiating
>>> with the British government.  I guess I'm a little confused as to how
>>> this landing rights system works.
>>> 
>>> Andrew, I see the point about Virgin Blue being an Australian
>>> Airline.  I suppose you mean it is registered as a company in
>>> Australia.  But it is still British *owned* by the Virgin Group in
>>> the UK, so in that sense it is British.   And it would seem that it
>>> is the ultimate ownership, rather than where the airline company is
>>> incorporated, that is the key issue as regards trading off
>>> international landing rights.
>>> 
>>> I know that Virgin Blue has nothing to do with the
>>> European operations of Virgin Atlantic.   While technically correct,
>>> both airlines still both enjoy the support of the same shareholder.
>>> It is hard to imagine that Richard Branson regards them as
>>> completely separate, even though legally, they are.
>>> 
>>> I don't see Singapore Airlines getting too concerned about the short
>>> term performance of Air New Zealand.  In fact I would suggest it
>>> rather suits them that Air New Zealand has a couple of bad financial
>>> years.  If Air NZ/Ansett don't meet certain profit targets, then no
>>> top up payments to Brierley Investments are required, thus saving SIA
>>> millions of dollars!  In fact it wouldn't be beyond the bounds of
>>> possibility that two years out SIA might use their influence on
>>> Branson to engineer a merger between Ansett and Virgin Blue.  Air
>>> NZ/Ansett CEO Toomey is jumping up and down about the Impulse/Qantas
>>> merger at the moment.  I don't think that is going to be called off.
>>> But by getting the Australian commerce commission to officially
>>> sanction that, how could the Commerce Commission not sanction a
>>> merger between Ansett and Virgin Blue down the track?   How is that
>>> for a grand conspiracy theory?
>>> 
>>> And now to Peter's latest 'rave' on the subject ;-)
>>> 
>>> "I cannot agree with you with Air New Zealand is
>>> currently demonstrating any reasons why they should be
>>> treated as a 'best in breed'."
>>> 
>>> Well, I didn't exactly say that.   I said that if you were to invest
>>> in airlines you should invest in the best ones.  Unfortunately for
>>> Air NZ both Qantas and Singapore airlines (the direct
>>> competition) fall into that category!
>>> 
>>> Personally I think Air New Zealand are well managed.  They have to be
>>> to 'hang in there' with the competition!  It seems to be a series of
>>> factors (intense competition in Australia, downturn because of the
>>> olympics, digesting the different culture of Ansett, a spike in fuel
>>> prices and the weak New Zealand dollar) any one of which they could
>>> have coped with, but when all 5 hit together, well, it hurts!  I
>>> regard myself as slightly 'underweight' in Air New Zealand but won't
>>> be buying any more of them until I have a clearer picture as to how
>>> they will fund the 5 billion dollar fleet upgrade for Ansett. SNOOPY
>>> 
>>> (disc: Hold AIR)
>>> 
>>> 
>>> 
>>> ---------------------------------
>>> Message sent by Snoopy
>>> e-mail  tennyson@caverock.net.nz
>>> on Pegasus Mail version 2.55
>>> ----------------------------------
>>> "You can tell me I'm wrong twice,
>>> but that still only makes me wrong once."
>>> 
>>> 
>>> 
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