Queenstown Airport: Air New Zealand's Crocodile Tears

The outburst of hot air from Air New Zealand Ltd [AIR.NZ] domestic airline general manager Bruce Parton over the weekend about the deal Auckland International Airport Ltd [AIA.NZ] stitched up over buying a piece of Queenstown Airport seems to be nothing more than sour grapes from a company that practices the same sort of monopolistic, anti-competitive business that the airline is accusing the airport of practicing - one of the reasons I bought AIA shares by the way.

"AIAL has displayed significant greed over several years and is adept at fleecing travellers. It would be naive to think it's not aiming to increase airline and airport charges, which will ultimately increase the cost of travel into and out of Queenstown," NZ Herald, 24 July 2010

Mr Parton's part of the airline has had a decades long history of over-charging on most of the domestic routes that it operates on and still does when not faced with competition in small towns - Napier is still a route that you have to take a mortgage out just to fly there and I am sure you have your own story to tell about your own local Air New Zealand rort.

Lets forget about that though. This is simply part of business. When you don't have a competitor to keep you honest there is always the temptation to charge more. In Auckland Airport's case they are able to charge more because of their size and dominance in this part of the world and that is unlikely to be challenged anytime soon simply because they are the biggest and will probably remain the biggest for many more years to come.

Mr Parton's suggestion that the deal between AIA and Queenstown Airport needs to be looked at by the Commerce Commission is a retrograde move by a manager without the foresight to make the move on Queenstown before AIA did. Is it really going to be a fair playing field if one or more of the airlines flying to Queenstown own the means to fly there and the Airport as well? I dont think so.

Whatever you think of Auckland Airport's business practices and charges - and some of them have been and still are highly suspect and overpriced - Air New Zealand operates in a similar manner and will continue to do so given the opportunity to own part of Queenstown Airport.

Better that a company with experience at running an airport, rather than a state run bureaucracy like Air New Zealand have a chance to fleece us all over again.

Mr Parton's cries are those of a hungry, anti-competive, monopolistic crocodile.


Disc I own AIA shares in the Share Investor Portfolio



Auckland International Airport @ Share Investor

Queenstown Airport: AIA purchase good Long-Term but will cost shareholders Short-Term
Long Term View: Auckland International Airport
VIDEO - Simon Moutter on Australian Airport Purchase
Auckland Airport Capital Raising a fair call
Auckland International Airport lands Australian Ports
What Infratil sale of Auckland Airport stake means...
Is another Auckland Airport bid likely under a business friendly Government?
Latest Airport coverage
Cullen's move on Auckland Airport has far reaching effects
Cullen's move on AIA tax plan Anti-Business
AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?

Discuss this Stock @ Share Investor Forum - Register free
Download AIA Company Reports
Download Queenstown Airport Company Reports


AIR @ Share Investor

Long Term View: Air New Zealand Ltd
John Palmer Tipples on the Shareholder
Mike Pero and Air New Zealand: Capitalism vs Socialism
Rob Fyfe's "Environmental Extremism"
Reality Needs to Bite
Air New Zealand wants another taxpayer bailout

Discuss this stock at Share Investor Forum - Register free
Download AIR Company Report





c Share Investor 2010

DNZ Property IPO: It stinks

In an ideal world Initial Public Offerings (IPO) are a means of raising capital from the public to enable the company getting the proceeds of such an IPO to use it to grow and prosper into the future. The DNZ Property Ltd [DNZ.NZX] IPO (see DNZ Prospectus)that kicked off earlier this week is certainly one for either the blind, stupid or both or a broker if you haven't sold your allocation to the aforementioned and is far from ideal, in fact it has the rear-end smell of failure written all over it and you dont even have to glance at the glossy, expensive prospectus to get the full stench.

It wouldn't be so bad if the funds raised in the IPO were going back into the business but the big bad, bogeyman up front is that the $35-40 million raised will be going to two overstuffed suits to buy out their management contact.

As the basis for an IPO this has got to be one of the worst reasons to raise cash.

Even if the underlying company was worth you investing your hard earned, can you really trust management of a company and its directors that would allow two individuals to walk away with this much money without doing anything for it?

What kind of agreement was drawn up that this kind of money would be needed to buy out a contract like this of such a small business!!

With these kind of backroom deals going on you know you cant trust management at DNZ Property, now, or in the future - the business is very badly managed.

The big winner will be the brokers, they always are with these kind of turkey IPOs, but I suspect that the small investor like me will be avoiding this stinker like the plague. It will be pushed by your broker because they will get a commission to sell it to you but all you have to say is no I would rather set my money on fire than hand it over to DNZ.

It is sad that this, the highly risky Ecoya Ltd [ECO.NZ] and the heavily debt laden Kathmandu Holdings Ltd [KMD.NZ] IPOs have been the only three calls to the market for capital over the last year or so. The DNZ IPO just took IPOs in NZ to a new low.

Ecoya is at least well managed, Kathmandu has at least a good brand but DNZ is simply a shitty, cynical, little attempt to feather-bed two individuals pockets for doing sweet fanny adams.

No wonder the NZX is performing badly and small investors continue to buy houses instead of shares.

In case you are wondering where I stand, I am of the opinion that the DNZ Property IPO is excrement in the true sense of the word.

STAY AWAY.

Related

DNZ Prospectus
About DNZ

Discuss DNZ @ Share Investor Forum


From Fishpond.co.nz



Buy Every Bastard Says No - The 42 Below Story, by Geoff Ross & Justine Troy & more @ Fishpond.co.nz





c Share Investor 2010

Unlisted Market Discussion

I have been aware of the Unlisted Market for shares, it has been around for a few years. It is independent of the NZX and steers clear of the nonsense and conflicts of interest of its bigger brother.

There are about 40 listed stocks or financial instruments and they offer the following:


For Issuers, Unlisted:

Provides a centralised and transparent trading mechanism Minimises participation costs Provides an arms length price discovery mechanism for securities, minimising the need for regular and costly company valuations Improves liquidity Facilitates communication with investors and shareholders Lowers transaction costs Removes the burden of share trading administration from the company secretary by centralising existing OTC trading Enables exposure to greater investor interest and publicity Provides a low-cost, first step for companies to facilitate share trading while examining their future options for a registered market listing For Shareholders For companies that have yet to make any move to formal or registered security markets, Unlisted provides a simple means for existing and new shareholders to buy and/or sell shares in Issuers. For professional investors or venture capitalists, Unlisted provides a mechanism to buy into smaller New Zealand businesses, with the knowledge that should they wish to sell their ownership stake they can easily do so through the trading facility. For Stockbrokers Participation in Unlisted gives brokers' clients access to a broader range of shares in small and growing New Zealand companies.

Unlisted's rules and regulations
Unlisted is a trading facility that is not a registered stock exchange under the Securities Markets Act. Investors in companies quoted on Unlisted are not protected by the Securities Market Act's protections relating to insider trading, continuous disclosure, Directors' and officers' relevant interest disclosure or Substantial security holder disclosure.

Issuers remain bound by the obligations contained in their constitutions, the Securities Act, the Companies Act and the Financial Reporting Act, and by Common Law.

Quotation on Unlisted does not affect an Issuer's status under the Takeovers Act and Code, and the usual regulatory protections associated with a registered exchange and Securities Commission enforcement of them are not available. Source from - About Unlisted

As part of the Share Investor Forum, you can now discuss Unlisted Stocks on this part of the site.

The companies listed here are not for everyone, most are moderately speculative and in the early stages of life as companies.

List some of your own if you desire. It aint hard.

Enjoy.

Disclosure - None


Related

Unlisted


Recent Share Investor Reading

• Long Term View: Methven Ltd
• Long Term View: NZ Oil & Gas Ltd
• Long Term View: Kiwi Income Property Trust Ltd
• Long Term View: Cavalier Corporation Ltd
• Allan Hubbard: Full TV3 Interview - July 16 2010
• Cavalier Corp: Profit Upgrade off low 2009 Result

Discuss this Topic @ Share Investor Forum


From Fishpond.co.nz



Buy Every Bastard Says No - The 42 Below Story, by Geoff Ross & Justine Troy & more @ Fishpond.co.nz





c Share Investor 2010

Long Term View: PGG Wrightson Ltd

In this series of posts I am going to be looking at stocks listed on the NZX in relation to their returns to shareholders over the life of their listing -what shareholders would now see in their back pockets if they had invested in the company IPO. The calculation of returns includes dividends and tax credits.

PGG Wrightson Ltd [PGW.NZ] has been a poorly performing stock since its January 1982 listing . We will make our comparison at an adjusted share price of 50c*. $1.13c in net dividends** a 5:4 share spilt in 2010, a 9:8 split in 1994 and a 9:8 split in 1992 and 30% more in tax credits (see chart above)gives PGW a 240% return (see chart below for the share price percentage gain against the average of all NZX indexes - does not include dividends, tax credits and the share split in its calculation) and over the nearly 28 year listing*** of PGW an approximate annual net return of 15%.

This is approximately a 3% less return when compared to the average of all NZX indexes.


Earliest available data for share price from 1991*
Dividend records go back to 1994**
Our comparison is for 16 years. All relevant available data to show the return for PGW dates from and includes 1994***


Long Term View SeriesAuckland International Airport
Air New Zealand
AMP Ltd
Briscoe Group Ltd
Cavalier Corporation Ltd
Contact Energy Ltd
Delegats Group Ltd
EBOS Group Ltd
Fletcher Building Ltd
Fisher & Paykel Appliances
Fisher & Paykel Healthcare
Freightways Ltd
Goodman Fielder Ltd
Hallenstein Glasson Holdings Ltd
Hellaby Holdings Ltd
Kirkcaldie & Stains Ltd
Kiwi Income Property Trust Ltd
Mainfreight Ltd
Michael Hill International Ltd
Metlifecare Ltd
Methven Ltd
New Zealand Refining Ltd
New Zealand Stock Exchange Ltd
Nuplex Industries Ltd
Port Of Tauranga Ltd
Postie Plus Group Ltd
Pumpkin Patch Ltd
Restaurant Brands Ltd
Ryman Healthcare Ltd
Sanford Ltd
Sky City Entertainment Group Ltd
Sky Network Television Ltd
Steel & Tube Ltd
Telecom NZ Ltd
Telstra Corp Ltd
Tourism Holdings Ltd
The Warehouse Group Ltd


PPG Wrightson @ Share InvestorStocks on my Watchlist: NZ Farming Systems Uruguay Ltd

Discuss PGW @ Share Investor Forum




c Share Investor 2010