Like Warren Buffett I wouldnt touch airline stocks with a ten foot spruce goose. AIR is kinda limping along at the moment. It has increased competition on the Trans Tasman route where it makes the bulk of its profit, much higher fuel bills historically speaking and a huge slowdown in people flying that looks to continue well into 2010.
Granted it does have 1 billion of taxpayer cash in its bank account, but even a billion aint enough when you are being squeezed by the balls.
AIR will have to consider a partner or merger with another player to survive in the medium to long term and its current rouble just might be the turning point.
It is too small to seriously compete and those competitive pressures are seriously eating away at its bottom line.
kbot wrote:Not only has Mr Fyfe being sniffing it, it appears the fumes have reached some wallets. Not sure why the share price has rocketed (I mean flown high ?) recently, but AIR was a small allocation of my portfolio when I pulled my savings out of the bank late last years. If only I had a crystal ball 30 days ago . . .
kbot wrote:Thanks B.
I like the fact that you've put some pointers for me to study on. I plan to hang on to these until after the A320 new planes come in and during the Rugby World Cup games, I'll fondly say goodbye to them. Touch wood AIR will also issue cheap shares before that, and if not that, then there is also some incentives for long term investors I need someone fluent in English to explain to me if it's worthwhile.
kbot wrote:Appears that short-term wise this received a pounding. Not sure why investors are not interested at this bargain. I'm pretty sure come dividend time in Nov this year, there should be a bounce.
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