Originally Posted by
Rated De
IFRS 16 is making big waves in many transport oriented companies.
It is exactly why Qantas is bringing the aircraft on balance sheet.
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Perhaps the tide has gone out on the shell game?
Any analyst/ investor worth their salt in airlines always effectively brought leases back on balance sheet anyway. (same with the big retailers who often have long term leases)
You'd compare airlines on a pre-lease basis using
MCap + Debt + PV leases (or 8x shortcut) / EBITDAL (where the L is leases).
Note that the Lease Payment consists of both an Interest Component (as someone else is financing the purchase) and a Depreciation Component (as that asset becomes less valuable through age and use)
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The share price is also now down almost 25% from its $6.40 highs in October, although I suspect this is mostly driven by jet fuel and a general global sentiment that the recent high profitability of airlines will turn (combination of fuel up and greater competition)