defies logic, page-7

Ok I'm going to try to put my "balanced" hat on.

I think those applying "same industry, same effect" principles for VBA from QAN's recent downgrade announcement might have missed the point. I would have thought the market would have already factored this in anyhow, but what do you expect from a negative announcement in a crap market? - not a positive SP spike...that's for sure. The long term support of $2 for QAN would have to be a huge magnet at the moment also.

QAN are losing market share to VBA - I think this is painfully obvious from the recent monthly figures; QAN down, VBA up by comparison - V starting next year will do the same - should QAN expect the same T/O next year in the international market also with another low cost carrier entering on top of lower overall demand? NO

QAN has the double whammy of oil spike/ crap currency exchange (despite a large % hedging) AND loss of market share, but don't forget affect of segmenting their own market - business customers are now more cost focused (cheapest fare pretty much regardless) - another shift to VBA seat demand. Sabre mentions Ryanair quite a bit - take a look at the market share they've taken from BA in the past years...mind boggling if you ask me. Isn't VBA to QAN what Ryan Air is to BA?

I'd just love to see VBA get into some of the low competition regional sectors here - imagine Mt Isa-Townsville, even a Charleville Brissy sector a couple of times a week, maybe even Emerald-Brissy and that's just some in QLD. These sectors are mostly jam packed, poorly serviced (MACAIR aren't exactly renowned for on-time performance).

Worthwhile also taking a look at VBA's affect in New Zealand - how well do you think AIZ are going domestically in their own local market? $ rules again - the cheaper arilines get bums on seats.

That said, airlines have huge cash flow but the margins are very small, so people expect the slightest economic blip to be catastrophic for airlines. The key is speed to respond to changed conditions. I think this is what is wighing on the market's mind - can they dispose of planes if they need to drop back some cogs?

Now what doesn't make sense to me is that the international airlines are performing quite well by comparison to ours. US XAL looking pretty ok, BA, Ryan Air not bad either - we're doing a great job here of being another leader to the downside.

Anyhow, lets see what news Friday's AGM brings...