Al From Australia, joined Jun 1999, 593 posts, RR: 2
Reply 1, posted (13 years 10 months 1 week 6 days 21 hours ago) and read 1698 times:
I read it as they are losing money hand over fist on the current route network and frequencies of flights, so they are aiming to turn that around to a "making money" airline in the short to medium term timeline by introducing a more acceptable and responsible schedule with less flights, staff and costs from now.
Short answer - they are taking a painful option now to make a return to profit in the medium term. Being responsible to their shareholders and ensuring some sort of future for themselves I guess is a good description.
Aerorobnz From Rwanda, joined Feb 2001, 7812 posts, RR: 17
Reply 3, posted (13 years 10 months 1 week 6 days 20 hours ago) and read 1678 times:
It means that they are making flight schedule cuts to their network and concentrating on existing profitable routes, and reducing costs any way they possibly can to stay in business long enough for the 'medium term' to come..
TG992 From New Zealand, joined Jan 2001, 2910 posts, RR: 10
Reply 4, posted (13 years 10 months 1 week 6 days 19 hours ago) and read 1668 times:
Air NZ flying into unknown
02 December 2001
Air NZ is taking a surprisingly aggressive approach under new management, writes Terry Hall.
Air New Zealand is flying in unknown territory as it copes with a drastically altered international aviation scene in the aftermath of the New York terrorist attack and a string of other problems.
These include questions of whether its new majority shareholder, the government, will interfere with its day-to-day operations; how it will cope with the loss of Ansett which was delivering thousands of passengers each year to its international routes; how it will rebuild its reputation in Australia, a key market; and what will happen to the fractured relations with Singapore Airlines. Just months ago SIA said it wanted control of Air New Zealand, event without Ansett.
There are also issues about when it will return to profitability. Traditionally the airline makes most of its profits between December and February - so it is too soon to say. ABN Amro said last week that November loads were down by a total of 20 percent on the same month last year.
It is also understood Air New Zealand has been worried by the high level of no-shows - people who fail to turn up for flights presumably because of the terrorist attacks. On the plus side insiders say the London-Auckland flights are full. New Zealand's reputation as a safe haven - a concept promoted by the government and tourist authorities in Japan and other selected markets - seems to be having some success.
Air New Zealand, under its new management, is taking a surprisingly aggressive approach to signs Japanese tourists are staying home. It is offering discounts worth a total $5.5m off its fares from Japan, this country's second biggest tourist market.
Significantly, at the time when Qantas and other airlines are scaling back flights, Air New Zealand has increased capacity on Asian routes including Japan, Hong Kong and Taiwan due to customer demand.
The Bank of New Zealand says visitor numbers in October held up surprisingly well. While visitors from higher spending Japan and the US were down by some 19.6 percent total visitor numbers fell by just 3 percent.
Many of these people came from Australia. The BNZ noted while this would be good news for Auckland International Airport, greater numbers of Australians would not necessarily be a plus for the industry as a whole. "For airlines short haul flights are not the big dollar earners, and the high spending end of the market tends to be driven by folk from further afield."
Air New Zealand's share price has been showing remarkable resilience, with the shares trading last week at up to 11 cents above the 27c a share agreed with the government for its $585m equity injection last week.
Much of this strength was driven by the substantial fall in the international oil price. Last year's massive spike in prices was a key reason Air New Zealand and other airlines got into trouble. The return to lower prices will represent major cost savings. However analysts say this is only part of the equation.
The latest quarterly profit from the company - released before the oil price fall - showed the company operating in a positive cash flow position. However it was finding trading difficult. In the September quarter it made an operating loss of $26m up from a loss of $4m in the corresponding three months of last year. This implies it will make a substantial trading loss in the full year.
Both broker and aviation analysts welcomed the government's confirmation last Tuesday that it was committing itself to a total rescue package that could total $1.035 billion. This would include a further $150m up to June 2003 if needed "to shore up business confidence in the company".
Credit Suisse First Boston said the commitment is positive for the company "to recover from a significant deterioration in its financial position".
However many investors were unhappy at Michael Cullen's comments that the airline will remain under state control. Airlines are risky, cash hungry businesses. There are concerns the new management will not be as aggressive as might need to be when cutting jobs. Government ownership also suggests pressure could be applied to maintain unprofitable routes to minor centres where a government may feel insecure.
The government may surprise by maintaining a hands-off approach, and there has been no sign of interference in the cost cutting moves disclosed to date, including the proposed sale of the South Island ski-field operations and Jeyset, the loss making Australian travel business.
Air New Zealand's A shares slipped back to 33c on Friday morning (down 4c on the week) and the B shares to 35 (down three). This coincided with comments from ABN Amro and Credit Suisse First Boston that the share price was well ahead of their valuations.
Al From Australia, joined Jun 1999, 593 posts, RR: 2
Reply 11, posted (13 years 10 months 1 week 6 days 15 hours ago) and read 1601 times:
ETA Unknown, I think your nick should be changed to Facts Unknown. What an absolutely absurd statement to make.
Funny you should mention Star Mx5. I had already heard a funny story (from my source inside WHQ at UA) that has come from the corridors of power of the 5 power brokers within Star itself, after some private meetings between certain Star members during last weeks Star CEO conference. The plot thickens as they say. Cheers. Al.
AirNewZealand From New Zealand, joined Oct 2000, 2549 posts, RR: 6
Reply 13, posted (13 years 10 months 1 week 6 days 13 hours ago) and read 1582 times:
I agree B744,
Looking at the load factors for the next three months nearly every single INTERNATIONAL flight is going out with a full load, now how can they say they are going to cut routes??
Aussie Is especially looking good, with all flights going out full, except for Dec 14th, and Jan 10,11,12,13.
I think the press need to do some research on Load factors before going and saying such rubbish as "there pax loads are not doing too well!!"
Also, AirNZ was a money making side of AN/NZ, though AN gave alot of Pax to NZ as it has been stated. It is good that they are co-operating again, as they both need each other!! At least the press got that right.
I think you have been mis understood by some of the members on this forum! Come on Guys i think you owe this dude an apology. He said nothing about AN Aussie, but as yet again, this thread will be f****d up by people who are still angry at others...I am not relating to you Mx5_boy!!
By the way, yes you are right about them only serving those ports, but look at all the tourists they will pass onto UA, LH, SQ etc.... Everyone knows, LH got real angry at NZ as they were taking all there customers from the LAX-FRA route. Also UA got angry about NZ taking the Pax from HNL-LAX and v.v. Both settled it, though i think AirNZ is still very angry at these two carriers for doing this as they made lots of money for NZ!
Even though NZ only serves these four different ports from every one else, they are the only STAR carrier to serve, all of the Networks....
ie, Asia, Australasia, Europe, New Zealand, Pacific Islands, United Kingdom and America.
The three next closets are SQ, TG, and UA!
BMI is very similar to NZ!!
B727-200 From Australia, joined Nov 1999, 1051 posts, RR: 2
Reply 16, posted (13 years 10 months 1 week 6 days 9 hours ago) and read 1555 times:
Hey AirNewZealand.....bite me!!
Seriously....NZ must have a lot of recoiling to do after "de-merging". Firstly, they have overstaffed areas that were grown to absorb the AN work load in a rationalised group. Secondly, they have some departments that do not exist anymore (or are a skeleton of what is required) due to moving that division's functions to Melbourne.
Add to all this the S11 effect and and it is going to be tough times for NZ. As for Star, members are added to the alliance for as much their geographical location as route structure. For this fact, I can not see Star removing NZ, especially since the other Star member in the region is very weak (on an international scene more so).
A down-turn in load factor could be an opportunity for NZ to get rid of its B762's (if it has not already done so?). These aircraft are in not much better shape than the AN ones.
Mx5_boy From , joined Dec 1969, posts, RR:
Reply 17, posted (13 years 10 months 1 week 6 days ago) and read 1534 times:
What are the loads v's yields? I have seen some incredibly cheap fares advertised for NZ flights and don't forget they have cut services. Full planes don't always equate to money making.
I'm not having a go at NZ, I'm just wary about the governments involvement and how long it will stay involved. Some serious restructuring needs to be done and as Al hinted above, rumours at Star are they are not happy with NZ for some reason.
Again, remember that good loads don't always mean great yeilds, even though traffic at this time of year is great - lot's of Kiwi's going home from Oz for xmas, same with Islanders to the Islands.
Dalecary From , joined Dec 1969, posts, RR:
Reply 18, posted (13 years 10 months 1 week 5 days 21 hours ago) and read 1520 times:
No doubt at some stage in the future, QF will have another go at securing NZ. They will have few other options if they are to expand and grow in the future and try to retain some identity. Can't see the NZ Gov'ts stake being anything more than for the short term.
Marara From Australia, joined Oct 2001, 680 posts, RR: 0
Reply 21, posted (13 years 10 months 1 week 5 days 19 hours ago) and read 1510 times:
Yahoo! Australia & NZ Finance
Thursday 29 November 12:10 PM
NZ govt floats chance of 25 pct Air NZ selldown
WELLINGTON, Nov 29 (Reuters) - The New Zealand government might sell a 25 percent stake in national carrier Air New Zealand to a cornerstone shareholder, probably an airline, New Zealand Finance Minister Michael Cullen said on Thursday.
However, the government would remain the airline's majority shareholder and the sell down would only happen when the international aviation market improved, Cullen said.
"Suppose we sell 25 percent to a cornerstone shareholder, we will still own 57 percent. There is no intention at this stage, not even a contemplation, of surrendering majority shareholding," Cullen told Reuters in an interview.
The government is to pump up to NZ$1.035 billion in debt and equity to rescue the debt-laden airline after it lost NZ$1.4 billion in the year ending June 2001, due mainly to the collapse of its unit Ansett Australia.
The bail-out will result in the NZ government owning 82 percent of the airline and Cullen said it will remain the majority shareholder for an indefinite period but "not forever".
Cullen said he would not rule out any potential buyers of the cornerstone stake but finding one was not a priority.
"We have got to get on and concentrate on getting the business right," Cullen said.
Singapore Airlines Ltd SIAL.SI owns 25 percent of Air New Zealand and had attempted to increase its stake to near 50 percent earlier this year but the proposal collapsed.
Under the government's rescue package, SIA's stake will shrink to less than five percent.
Brokering house ABN AMRO said in a research note this week it believed only two airlines, SIA and Air NZ's major regional competitor, Australia's Qantas Airways Ltd (ASX: QAN), could be possible cornerstone shareholders for Air NZ.
Air New Zealand's unrestricted B shares AIRVB.NZ last traded two cents lower at NZ$0.34 on Thursday, while the NZ resident-only A shares AIRVA.NZ were down one cent at NZ$0.33.
Singapore-based Brierley Investments BRY.SI holds 30 percent of Air NZ but will see its holding cut to around 5.4 percent if the bail-out is approved.
Rmm From Australia, joined Feb 2001, 525 posts, RR: 1
Reply 22, posted (13 years 10 months 1 week 5 days 19 hours ago) and read 1498 times:
I know this all hinges on if & when SQ & AN get together in some form but
under this proposal does SQ still have to sell out if QF were interested
even though it now owns only 4%? Do the competition laws still apply
for this low level of ownership? I think if they did I could see SQ holding
there 4% just to annoy the sh*t out of QF.