Friday, July 08, 2005
Air New Zealand
As before I can't link this so it's partially pasted. But first a comment.
There's nothing like a socialist spending your money. It's very easy to do. It's also very easy for a socialist to lose your money for you. I like the last two sentences of this article. People blame the USA for having no 'out' strategy in Iraq. Well, Helen Clark and Michael Cullen have no 'out' strategy for AIR NZ shareholding. Cullen was very quick this year to tell people to invest in the stockmarket. He has made the classic mistake of not knowing when to sell. Dimwit.
Fuel price puts Government's Air NZ investment on edge
By Rachel Pannett
Sky-high oil prices mean it is not just consumers noticing their wallets are lighter.
Air New Zealand's share price is under pressure and the Government is now close to being in the red on the billion-dollar investment it made to save the airline from bankruptcy.
The Government paid $885 million in 2001 and a further $150 million last year, or an average of 26 cents a share, for its 81 per cent stake.
After a five-for-one share consolidation last August, that average is $1.30 in today's terms - just one cent below Air New Zealand's closing price of $1.31 (down 4c yesterday).
The difference between what the Government paid and what the shares are now worth?
A mere $8 million.
Taking holding costs and dividends into account, the Government is well out of pocket.
Compared with a high of $3.03 (in today's terms) reached in May 2002 - when Air New Zealand announced a "no frills" revamp of its domestic services designed to turn the business around - the Air New Zealand investment is looking decidedly dubious.
At that point the Government was $1.34 billion in the money.
Only briefly in 2001 when the airline was teetering on collapse have the shares traded lower than yesterday's closing price.
They hit an all-time low of 88c (in adjusted terms) on September 24, 2001, when the idea of placing Air NZ into statutory management was being considered...
Goldman Sachs JBWere aviation analyst Peter Sigley says Air NZ will face "a considerable earnings headwind over the coming period".
The airline has about 60 per cent of its fuel hedged at US$50 a barrel for 2006, but with Goldman Sachs JBWere predicting oil prices will remain this high until then, it will need to buy a good share of its fuel on the volatile spot market.
"The reality is that it is burning a hole in their pocket so something has to be done," Sigley said...
It looks as if Air New Zealand, and the Government, could be in for tough times ahead.
"With oil prices at US$60, the shares are only going to go one way," Direct Broking's Ken Allen said: "Lower".
There's nothing like a socialist spending your money. It's very easy to do. It's also very easy for a socialist to lose your money for you. I like the last two sentences of this article. People blame the USA for having no 'out' strategy in Iraq. Well, Helen Clark and Michael Cullen have no 'out' strategy for AIR NZ shareholding. Cullen was very quick this year to tell people to invest in the stockmarket. He has made the classic mistake of not knowing when to sell. Dimwit.
Fuel price puts Government's Air NZ investment on edge
By Rachel Pannett
Sky-high oil prices mean it is not just consumers noticing their wallets are lighter.
Air New Zealand's share price is under pressure and the Government is now close to being in the red on the billion-dollar investment it made to save the airline from bankruptcy.
The Government paid $885 million in 2001 and a further $150 million last year, or an average of 26 cents a share, for its 81 per cent stake.
After a five-for-one share consolidation last August, that average is $1.30 in today's terms - just one cent below Air New Zealand's closing price of $1.31 (down 4c yesterday).
The difference between what the Government paid and what the shares are now worth?
A mere $8 million.
Taking holding costs and dividends into account, the Government is well out of pocket.
Compared with a high of $3.03 (in today's terms) reached in May 2002 - when Air New Zealand announced a "no frills" revamp of its domestic services designed to turn the business around - the Air New Zealand investment is looking decidedly dubious.
At that point the Government was $1.34 billion in the money.
Only briefly in 2001 when the airline was teetering on collapse have the shares traded lower than yesterday's closing price.
They hit an all-time low of 88c (in adjusted terms) on September 24, 2001, when the idea of placing Air NZ into statutory management was being considered...
Goldman Sachs JBWere aviation analyst Peter Sigley says Air NZ will face "a considerable earnings headwind over the coming period".
The airline has about 60 per cent of its fuel hedged at US$50 a barrel for 2006, but with Goldman Sachs JBWere predicting oil prices will remain this high until then, it will need to buy a good share of its fuel on the volatile spot market.
"The reality is that it is burning a hole in their pocket so something has to be done," Sigley said...
It looks as if Air New Zealand, and the Government, could be in for tough times ahead.
"With oil prices at US$60, the shares are only going to go one way," Direct Broking's Ken Allen said: "Lower".
