Fyfe flys low over Cullen sell-down

…Fyfe’s view is that many airline investors currently see the sector as an “oil play” and are keen to exploit the cyclicality of aviation stocks.

When he joined Air NZ in 2003 – jet fuel was US$30 a barrel before peaking at US$90 a barrel three years later. It was an “uncomfortable” place to be. But a reversal of the “peak oil” scenario, which many doomsday-sayers believed would collapse the sector – has brought new confidence across the sector.


But the rising Kiwi dollar is causing issues. If it stays at current US70c levels, New Zealand begins to look a rather unattractive tourist destination.

But, if it falls, Air NZ’s external costs will be pushed up as jet fuel, aircraft and parts are sold in US dollars. A US65 cent level is Air NZ’s pain threshold, Fyfe suggests.

New Zealand Herald