Member Info for Andyagogo

Two buys today, 9.97 the lower one.

I was tempted to be less cautious in buying quantity, but have attempted to stick to a plan.
It's always much easier to see clearly with hindsight!.

* highly competitive leasing rates

Ok final comment on the results conference call.

Their view is new aircraft pricing is high atm, with manufacturers having multi year full
order books. Although it was not directly mentioned, my impression was Michael expects this to
change over the next couple of years.

Highly competitive aircraft leading rates were mentioned re Lauda on the Airbus.

Lastly, they appear to view the market for selling older aircraft as strong,
many of these are going to China to be reconfigured as cargo planes.

Michael was asked about consolidation. His view is the sudden fall in the oil price prevented some
consolidation over the winter months.
He favours oil staying higher for longer to help take out capacity
Finally, Michael gave a long list of airlines that he thinks will no longer be independent
or around within a few years. So the view appears to be a European sector heading for 4-5 large companies.

Clearly these are guesstimates.

One of the interesting comments Michael made was on Lufthansa.
He appeared to suggest their low cost subsidiary may be selling sests below cost
and EU authorities appear unconcerned about their acquisitions.
I think the phrase was along the lines of .they appear to be able to buy whatever they want.

For opportunities that may materialise late October/November time.

I would much prefer if we were not heading in this direction,
however got to be realistic and say some form of at least short term shock
may now hit.
How that plays out remains to be seen.

What usually happens is share prices make a low while
news Continues to weaken - Provided there is nothing fundamentally
wrong with a company that is.

I added a small amount of RYA this AM.
Like the buy backs, however most private investors probably favour the IAG or EZJ divi income.

Well surely it's very relevant given a potential, for at least a short term hit
to profitability, and sentiment.
As mentioned I'm not making a political comment.

Leaving the politics aside, my take fwiw is risks of leaving without a deal and/or a new
general election are increasing.

Tomorrow will be a huge win for the Brexit party, as those who favour
no deal effectively have a single party to vote for, given the UKIP melt down.

The Remain vote splits many different ways.

So as we near late October and leaving without a deal looms large,
sentiment against the UK listed airlines may weaken further.

There is a saying..be careful what you wish for..
and a no deal Brexit may come with some unintended consequences-
we might ultimately end up with Corbyn.

The bear case appears to be RYA's cost advantage re competitors
is being eroded away- union recognition etc.

Now I'm not an industry expert or anyway near
so rely on the figures that RYA quote.

From those figures (and some may be cherry picked?) they appear to
show their cost advantage growing, rather than decreasing.

Ultimately reducing the share count boosts earnings per share, unless profitability
is in longer term decline. Next PLC one of the better UK examples.

In a nutshell...almost certain more short term pain is on the way..

As a contra indicator, that may be a positive.

Still not managed to read the full LEX post results article,
It may focus on the increasing non fuel costs that RYA faces.

Has cut their 2020 RYA earnings forecast by 9%, I don't have the exact numbers.

Another buy back steadily reducing the share count.

And the Max situation may hopefully be temporary.

It's quite a big change on expectations, to the downside.

Up to late last year Michael was optimistic about higher profitability
in 2020/21 - this did Not constitute official RYA guidance, just informal
comments made by Michael.

Now today we have - 0 visibility on H2, and profitability may take a dent
for a year or two given continuing European overcapacity.

Now whether that's already about in the SP .... (I can't call)

It may also be worth noting that what little guidance on 2020 is given,
appears to assume the UK leaves the EU With a deal.

A No deal Brexit is Not factored in to today's comments.

Is what the market may not like.
Prior to these results consensus looked for a (very approx) 10% increase
on pre tax for the coming year.

2020 estimates may need a significant scaling back if I am reading that correctly?.

On the flip side the buy back still, sounding positive on the Max.

Finally found it.

Michael's record is far better than the vast majority.
He's arguably created huge value over the years.

Look at the last VOD CEO, lauded in an FT last year on
stepping down from the top job. During his time at VOD he
was paid a lottery win type compensation.
And for what?.

I warned repeatedly on the VOD board last year at over £2 a share,
sadly not all my stock views are that prescient!.

I also think Jack's posts are very good, as that's being mentioned.

Good luck for tomorrow guys.

Any guidance on POST spectrum free cash flow.

That's the gold standard metric re VOD valuation imv.

Looking at the pre spectrum free cash flow is far less useful.

You can read the results at just after 7.00am, they will on on here in the News tab at the
top of the page, or you prefer on the Vodafone investors site.

In terms of what to do?, I would not be confident giving any view on that,
as it depends on your individual circumstances.