Forum Archive Index - November 2001

["Phil Boeyen" <pboeyen@sharechat.co.nz>]

Hugh

Good precis. Cullen does seem to have done an about turn on this.  One
moment "let's stay in till we get it up and going and make a buck", then the
next "we're long term shareholders".

One thing though.  I know you have talked before about airlines being a
commodity biz re Buffet, but really, are they low/no entry? Given the safety
regulations and landing right issues that have to be met, I wonder.  Also, I
have my doubts that competition is determined by price alone.  Certainly
discount carriers yes, but as so many airlines make their main cash from
business travellers, I would have thought things like take-off slots,
branding, in-flight services and so on count for quite a lot.

Regards, Phil


----- Original Message -----
From: "hugh webber" <hugh.webber@clear.net.nz>
To: <sharechat@sharechat.co.nz>
Sent: Wednesday, November 28, 2001 6:17 PM
Subject: Re: Re: [sharechat] Cullen airlines


> yeah, I'm rather sceptical of the Cullen logic on this....so we the
taxpayers
> will have the privilege of paying for future losses without any profit
motive
> to stimulate cost efficiencies.
> But then there are lots of contradictions involved.
> It was said that the Govt could not afford to let Air NZ disappear becos
of
> the effect on tourism and exports which is probably a reasonable
statement.
> So now they close down airfreight exports from the South Island and
cripple
> the world beating Air NZ Engineering Workshops in Chch.
>
> And as we all know the history is fraught with contradictions. Air NZ
wanted
> Ansett and said it had identified $350 million of synergy savings incl
> doing Ansett engineering work in Chch. Nothing happened. No savings
> took place. Instead costs blew out as they took on Toomey and his
> gold plated mates from Qantas - was it $25 million on management that
wasn't needed.
> Then the Aust government says you can have Ansett and now we'll let in
> Impulse and Virgin Blue so no one can make a profit.
> So Ansett goes down the tube and the Oz govt says its all Air NZ's fault.
> Nothing as blind as those who will not see.
>
> And as I've pointed out from time to time airlines are a commodity in the
Buffett
> analysis i.e. you can't make a reasonable continuing profit - they are
typified
> by low/no barriers to entry and competition determined by price alone -
> so sensible people (which should include governments) don't invest in
them.
>
> cheers,
> Hugh
>
> ----------
> From: G Stolwyk <stolwyk@wave.co.nz>
> To: sharechat.co.nz <sharechat@sharechat.co.nz>
> Subject: Re: Re: [sharechat] Cullen airlines
> Date: Wednesday, 28 November 2001 12:48
>
> Big ' Iron bird ' with wings clipped, can't fly so high anymore!
>
> One would normally smell kerosine,  whenever this plane takes off from the
tarmac; from now on, the
> odour of the gases from the exhausts will be more  like that of  burnt
bank notes!
>
> Keep flying Big Iron Bird!
>
> Gerry
>
>
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