Saturday 1 October 2011

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Fedun




1. Australia, Japan sign open skies aviation agreementAustralia and Japan have signed an open skies aviation agreement that will allow Australian carriers fly into smaller Japanese airports, just as flag carrier Qantas looks to set up a low-cost airline partnership in Japan.

The deal allows unlimited flights between the two countries, including to Tokyo's Haneda airport, and lifts capacity restrictions at Tokyo's larger Narita Airport from 2013, Australia's Transport Minister Anthony Albanese said on Friday.

"It also makes it possible for Australian airlines to fly beyond Japan to third countries for the first time, including key markets such as China and Europe," Albanese said.

Qantas, Japan Airlines and Mitsubishi have announced plans to launch a new domestic airline -- Jetstar Japan -- as part of the Australia's carrier's wide-ranging overhaul to improve profitability.

More than one million people fly between Australia and Japan each year and passenger numbers are forecast to grow by 25 percent by 2020, Albanese said.

Japan signed an open skies accord with the United States in October last year as part of a government push to liberalize aviation markets, with Haneda unveiling a new international terminal to help meet demand.

Australia's Jetstar, a low-cost Qantas subsidiary, was the first no-frills carrier to begin services in Japan, flying into Kansai International Airport in 2008.

Jetstar Japan, in which Qantas, JAL and Mitsubishi would each hold one-third share, will launch with an initial fleet of three new Airbus A320 aircraft. 

2. One cheap airline stock ready to fly

Despite the downturn in consumer confidence and shoppers' reluctance to spend, it seems the world's demand for our resources is continuing unabated.
Even with the recent falls in the Australian dollar, the currency once derided as the 'pacific peso' still remains well above its long-term average. The dollar's strength makes life difficult for our exporters and our retailers struggle to get us to part with our hard-earned.
We all know that miners are making money hand over fist – most notably the Big Anglo-Australian, BHP Billiton. Importers are also benefitting, and figures from our airlines and travel agencies such as Flight Centre and Webjet show that Australians continue to travel – most notably overseas – in huge numbers, thanks in large part to the improved buying power of our local currency.

AUD + Travel = Opportunity Amongst Airlines?
With so many Australians travelling and the market in a funk, perhaps it's time to look for opportunities amongst airline stocks.
I'll admit to a fair degree of scepticism when looking at airlines. The economics of the business are generally pretty awful – high, regular investment costs, fluctuating (and growing) fuel charges and excess seat capacity characterise the international aviation business. The business is generally so bad that Warren Buffett was moved to say of Orville Wright's momentous first flight: "If a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down."
On a hiding to nothing
Believe it or not, the Australian aviation industry has been much more profitable (or perhaps just less diabolical) than the international average. In fact, based on the figures released by the International Air Transport Association in June this year, the entire global airline industry has lost an aggregate $US23.9 billion in the last nine years. It's hard to overstate this point. While some airlines have made money and others haven't, the entire industry is unprofitable.
Australian airlines have the luxury of a relatively protected local market, both in terms of limited regulatory access for international airlines and a domestic market that is really only big enough for two major players. While a few would-be third entrants have tried – and the incumbents have suffered reduced profits for a time – none have been able to successfully challenge the reigning duopoly.
Going where angels fear to tread
With the poor economics and Buffett's warning ringing in my ears, I had a look at Australia's two major airlines, Qantas and newly-renamed Virgin Australia, as well as regional minnow Regional Express (ASX: REX), better known these days by the moniker Rex.
Qantas has had a chequered recent history, with earnings per share being as high as almost $0.40 in 2007, and as low as only $0.07 two years later. In the most recently completed financial year, Qantas eked out only 11.6 cents per share in earnings. In the past few years, Qantas' return on both assets and shareholders equity has been a good deal less than the average term deposit. It's hard to justify an investment in the Flying Kangaroo.
Virgin Australia, nee Virgin Blue, hasn't been so successful either. While Qantas has turned a profit in each of the past 5 years, Virgin Australia has lost money in 2 of those years, in 2009 and 2011. When the company has been profitable, the return has been meagre.While Virgin sported solid returns on equity early in its publicly-listed history, superior results have been hard to come by in the past three or four years.
Pockets of opportunity
It is often the case that specialist players can carve out a profitable niche in a market. Our largest regionally-focused airline, Regional Express, may be the best of a bad bunch, but may also be a really interesting opportunity. Profitable in each of the last five years, Rex also delivers reasonable (and comparatively very impressive) returns on capital and shareholders equity.
Positioned to take advantage of increased mobility – particularly with the growing numbers of so-called 'fly in fly out' mine workers – and relatively conservatively financed with a manageable debt load, the business has seen slightly eroding profitability, which is a watch-out for the investors.
Foolish take-away
Qantas and Virgin Australia are likely very well-run airlines, but the industry economics are the millstone around management's neck. However, Rex looks potentially quite attractive. With its share price around two-thirds of book value, Rex trading on a price/earnings ratio of less than 6, and is sporting an 8 per cent fully-franked dividend yield.
As long as management can restrict the slow but steady profit decline (or better yet start to deliver profit growth), the smallest of our trio may well deliver investors a soaring return.

3.  Oiler Fedun's career in jeopardy
Nobody knows if what happened to the Oilers defenceman Friday night in Minnesota might result in his not having the NHL career that looked so likely after the way he impressed throughout training camp.

But whatever happens in his future, you have to believe, Taylor Fedun is likely to go down in hockey history.

The last league in the world to hold out against no-touch icing has no option left but to adopt it now.

Fedun has to be the last straw. There can be no argument left.

I’m not sure there has really been one since even Don Cherry, the great preserver of all things physical in the NHL, began making a case to get rid of no-touch icing a decade ago.

Cherry led the cry to banish the banal business of two players racing the length of the ice toward the boards to try to touch a puck first to determine whether or not there’s an icing call.

The excitement of the play has always been marginal and the risk-reward factor ridiculous.

Changing the rule has been one of Cherry’s pet projects for years. He’s done at least three Coach’s Corner shows a year on it. Now everybody has to join his chorus.

“It’s been at least 12 years I’ve been going nuts on it,” Cherry told me yesterday.

“I had to stop showing all the examples of it. I was making kids sick.

“How many guys had to retire because of it, because they’ve never been the same since something like this happened to them?

“I don’t get it. For the past five years, I’ve been getting calls from guys who say they’ve never been the same.

“I don’t get that some people think it’s an exciting play. Now they want to reduce injuries? This is an easy one.

“It’s always a chickenshit forward who won’t go in first and a guy like Fedun who ends up getting hurt.”

Is there a single member of the NHLPA who wants to continue with this now, especially with what happened to this bright young Edmonton native who played with the Fort Saskatchewan Traders and Spruce Grove Saints in the AJHL before spending four years at Princeton University?

The Oilers, who didn’t land in Vancouver until 2 a.m., showed up at the rink still rattled about what they’d witnessed Friday night in St. Paul.

“It was a tough one,” said coach Tom Renney. “It was very, very quiet in the dressing room after the game, on the flight to Vancouver and the bus from the airport to the hotel.

“I know they were thinking about Taylor.”

The team at least woke up to the news that Fedun had successful surgery on his right leg (femur) and will remain in Minnesota a few days for observation.

“It was crazy. It happened in the same rink, in the same end and the same spot as Kurtis Foster,” said Renney.

Foster, an Oiler last year, missed the last several games of the ’07-08 season and the first 50 of the following season after he broke his left leg in several places.

As an Oiler last year, he made a passionate plea to get the play out of the game.

“I don’t want to see somebody go through what I went through, or something even worse, before the league changes that rule,” said Foster.

“We’re the only league, I think, left in the world that still has the rule.”

Renney said that now that somebody has suffered the same fate, it has to become a louder cry.

“It’s time,” he said of going to no-touch icing.

The Neanderthal thinking that still permeates the NHL has already been eliminated to a significant extent with the brilliant move to appoint Brendan Shanahan head disciplinarian in charge of player safety.

Shanahan’s tough, reasoned, video-supported work since stepping into the job has so far been revolutionary.

Wouldn’t it be wonderful if he took it on his own to call for the elimination of this rule before the first puck is dropped in the regular season?

Shanahan, of course, is going to have to decide if Eric Nystrom, the Minnesota Wild player who had his stick in Fedun’s skates, causing him to go out of control and crash into the boards, deserves a suspension.

Maybe. After all, it was his stick and he should have been in control of it.

But it’s hard to accuse Nystrom of intentionally trying to injure Fedun — especially with the way he reacted Saturday morning.

“I feel so bad about what happened ... I could die,” Nystrom wrote on his Twitter account. “I would switch places with Taylor right now if I could.”

Most reasonable people are, I believe, blaming the NHL and not Nystrom.



Washington Post
Truex returned to the site of his only career Cup win and turned a lap of 159.004 mph to win the pole at Dover International Speedway. He crashed the Chase party with his first pole of the season. He won his only career Cup race in 2007 at the Monster ...
Edmonton Sun
Who knows if what happened to him Friday night in Minnesota may result in his not having the NHL career which looked so likely the way he impressed throughout the Edmonton Oilers training camp. But whatever happens in his future, you have to believe, ...
Chicago Tribune
A Northbrook man with 64 arrests was picked up by police again — this time for assaulting a woman and her two young children, authorities said Saturday. Francisco Tirado, 27, of the 3700 block of Salem Walk, entered the woman's home on Sept. ...
Savannah Morning News
Adrian Mora's 27-yard field goal with 1:16 to play set the school record for career field goals and put the finishing touches on a 41-14 victory. “I found out after I kicked it,” he said, though acknowledging that he was previously aware of his pursuit ...

Aviation NEWS By
Neha Jain
Aviation NEWS Reporter





       
   

              



            
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