Member Info for timbo87

Why would Iran go to war with Israel? What are the benefits? It's not like it's a country that's particularly rich in natural resources like most of the Middle East (which is why those wars exist).

All of this is a load of games being played by Iran to gain more favour amongst other Muslims.

https://countercurrents.org/2024/04/iran-israel-rivalry-is-it-ideology-or-realpolitik/

Ask yourself this question: why would a nation warn another nation of an attack? Doesn't really make any sense, does it?

Classic situation: stock price drops, so a load of idiots follow, creates a collapse. At a certain point, the idiots are cleared out and the smart people start picking up shares.

There's something called the 3 Day Rule. In a news driven crisis, you buy on the 3rd day of trading and not before. People panic for a few days, often sending it far too cheap and then the smart money watches and just picks it up cheap, which often corrects the price.

Thanks Midastouch. I think that's where I was at. That this isn't a poor reflection on the company or management, just that exchange rates fluctuate. And in another quarter, it might work the other way and boost net profit.

(I'm just trying to see any risks regarding the state of the company from the results and nothing stands out).

"Quick trade yesterday at 15.75 and now it becomes a long term hold lol.

It will come back up, but patience required."

If we take the mid-point of guidance pre- and post- these results, it's €400m vs €600m. Or roughly, 33% down. And the share price has fallen by 36% since the Ryanair results. That is to say, the P&W hit is not only priced in for this year, it's priced in as if it will happen every year.

The share price is now only 1.5% higher than it was at its lowest point in 2022, back when it was losing money.

I guess it means they had to get some sort of foreign currency at a high price, and there's swings and roundabouts on this?

"The FTSE is a circus, the tail wags the dog in the City these days."

Every stock is, and always has been priced as: real price + mood. Stocks start making huge profits for a few years, people think the growth will never end. Get an adjustment, people start dumping their stocks.

Stocks always eventually move to where they should be priced. Investors dumping their stocks because they're scared is an opportunity. "Buy when there's blood in the streets" was Nathan Rothschild's advice.

The adjusted guidance reduction of around 30% less profit for the year is now priced in, and as if it was a permanent reduction.

I'm already too loaded up for more, unfortunately.

Expecting a bad day, and some fall. I still feel that the business is fundamentally solid looking at the EBITDA, RASK. They don't seem to be suffering from the same problems of price competition as Ryanair, which is good.

Theres lots of opportunities around betting against Middle East doom.

"My take is, not just that Eastern Europe flight are more expensive, but also that there is 'probably' less competition and therefore the margin is better."

Right. No-one is charging £250 or £400 for these sorts of flights because they cost £220 and they're adding on a little margin. You charge what the market dictates. And you sometimes make huge money and sometimes, not a lot. If you've already paid for aircraft you might as well run them and make a little money at quiet times of year. Maybe you only get £100.

Lufthansa had lower profits. Here are two things to take away from it:-

""However, market-wide capacity growth intensified price pressure for the passenger airlines, causing yields to fall.""

On many routes, there's a lot more competition, so prices fall. Simple supply/demand.

"The group also pointed to a "normalisation" of ticket prices, which many airlines like Ryanair have said shows a particular price sensitivity among European consumers whose appetite for shelling out for travel at any cost is declining."

Now this is why I like Wizz. Because it's not flying off to Rome for a weekend. It's going to see Granny in Cluj with the kids, which I think ranks higher in people's priorities. You won't cut it just to have a nicer car. And net migration from Romania, Hungary, Moldova is still increasing.

"So what your saying is that very short haul flights to western Europe are cheaper than longer flights to eastern Europe."

You might want to check your map. London to Malaga is 1042 miles as the crow flies, London to Bucharest is 1300. At most, the extra costs of time and fuel are going to be 25%. That doesn't explain the fares being something like 50% higher.

What does is that there's a lot more competition. Either because there's been an increase in planes flying or because there's been a fall in the number of passengers that want to do it. Go and look up how much more it costs to fly Xmas Eve vs Xmas Day to New York.

I'm going to make an assumption here that there are too many airlines flying to Malaga now, but also, going off to Malaga is optional. And I don't think many people are going to Bucharest on a summer holiday. They're going to see family. They've moved from Romania, and are off home with the kids to see Granny. They're not going to sacrifice that lightly.

We'll see what the results are like tomorrow. My thinking is that Wizz might still see a hit. But they're mostly serving routes without a lot of competition.

I've been looking at the price of flights for August on the Wizz Air website just to see what things are like. I thought I'd share what I've noticed.

What might be described as "summer sun" flights, such as London to Faro, London to Malaga are quite cheap. Even Saturday to Saturday, as little as £250. Whether there is just too much competition, less people doing holidays, I don't know. So, I think that on these routes, Wizz may face some of the same problems as Ryanair.

But on the routes to Eastern Europe, such as London to Cluj, Chisinau, Bucharest, Plovdiv, the prices are very high (often as much as £400 return), which suggests that there isn't the same problem.

I think there may be some loss of profit because of the "sun" flights like Ryanair, but I think they're considerably less exposed. Ryanair fly to 22 different airports around Spain and Portugal from London where Wizz only fly to 3.

I think you have to get away from this simple view of Ryanair/Easyjet/Wizz/Jet2 being in the same business. OK, they're all budget airlines. But they are also not as simple as petrol stations selling petrol.

Ryanair: super cheap. By most accounts, not that nice. From what I can tell, no holidays business. Fundamentally about flying off to sun or weekends in Barcelona/Paris etc.

Jet2: I don't know enough, but a bit of a hybrid airline/holiday company, that is paying Jess Glynne's mortgage.

Easyjet: cheap. Pretty nice, in my opinion. Similar destinations to Ryanair, but also has the holiday business.

Wizz Air: this is the one I know most about. It's not really a holiday airline, or much. More than anything, it's the migrant worker airline. People who were born in Poland, Romania, Hungary who are living in Western Europe who are going home to see their family now and again. There's a slide about this in one of their presentations. It's something like 70% of their traffic in the past decade. But also, you just look at their route map and flights. They have more flights to Bucharest than Faro, more flights to Cluj than Malaga.

Now here's something I just did: cost of flights to Malaga vs Cluj in summer. Malaga is cheap. Around £90 return. But the prices to fly to Cluj or Bucharest are pretty wild if you haven't already booked. You're looking at £350-400 return. So my guess is that Wizz are going to take a bit of a hit on the sun flights like Ryanair, but the family flights to Eastern Europe are still a good business.

I think this is good advice, thanks.

My feeling is to hold on Wizz until results on Thursday, see what happens and switch some to Easyjet. I generally like Wizz as a long term, riskier stock, but the Easyjet feels stable and that it's going to print money over the next year.

Can someone on here give me a brief explanation for why Easyjet are doing well but Ryanair aren't?

I'm holding some Wizz Air, and I think they're going to be fine with Q1 results on Thursday. They've had no warnings before, their customers are more family travel rather than holiday and there's not much competition to their destinations. But just trying to figure out if I should cut my holding.

A similar drop to Ryanair is now priced in. I'd invest more, but I'm at 50% of my portfolio since noon and that's already scary, even on something that's this much of a bargain.

The "nationalisation" plan is no different to what was happening under the Conservatives, the Williams-Shapps . As the franchise agreements expire, they become part of state run rail.

And it's still going to be the likes of First running the trains. Just that it won't be a franchise but what are called Passenger Service Contracts. Roughly speaking, they get paid to run trains to a contract and paid for running that train, rather than gaining revenue if trains are busy.

Materially speaking, it's going to make very little difference.

Pokerchips,

Thanks for the reply

"The last thing he knows he should be getting involved in is nationalising railways because he doesn't have the money to spend on such a thing.... but he does have to knock heads together and get a better running network ... railways needs a high volume of passengers to pay its way .... but you have to get the right balance of price and service to do that ..and competition in the market helps bring down prices....as you see in markets like Spain, where it is working well ..."

Nationalising railways is already happening and doesn't really cost anything. The assets are owned by the government and rolling stock companies. First or whoever just run them. It only costs if you terminate the franchise early, so they're waiting for the franchises to expire.

And they were never really "privatised". Not like NEX where Mrs Thatcher just let them do what they wanted. Franchised rail is micromanaged. What trains to run, what fares to set, how tickets are bought, whether there's a buffet car on the train or not. It's barely different to being nationalised.

Part of the reason why there's an ever-widening gap between rail and coach prices is that NEX or Megabus have innovated more to maximise revenue, cut costs. Like demand-based pricing to maximise revenue. e-ticketing, scrapping ticket offices, charging for seat reservations. Rail moves at a glacial pace by comparison.

It's why I invested in NEX. Probably too early, but I fundamentally believe that rail is going to get replaced by coach. Not on local lines around cities, or long distance, but for mid-distance travel. People going from Reading to Birmingham, or Swindon to Gloucester.

I will be very surprised if "nationalise the railways" doesn't mean "franchises return to government at the end of contracts".

Everything about Labour seems to have this sense of double-dealing, the right noises for the left. But you drill down into details, it means barely doing anything.