Qantas Debt/Equity ratio was around 75% BEFORE any JQ jets were put back on the books. Along with everything else that Qf has wasted money on, those bonuses were VERY expensive.
This is a very important point. The impact of IFRS16 is difficult to gauge (for the individual airlines), but its impact is widespread. Qantas is not the only airline having to re-organise the lease structure.
The DE ratio is definitely something concerning firms long airline stocks. Qantas may well find some pressure in FY19 on their funding costs (think credit rating) Time will tell.
Ultimately the type of narrative Mr Clifford was seeking to bed in (the point of this thread) may indicate pressure is becoming evident. As the yield curve now indicates a higher interest rate environment, rising fuel prices levers up pressure on Qantas' fuel included CASK. Combine this with a possibly weaker AUD and Qantas input prices rise disproportionately. RealityCzech is assisting this 'Clifford narrative' by linking fleet to Qantas' International future prospects.
The fleet renewal is well overdue, they know it. Their expansion of JQ, although ambitious has never reaped a tangible return. Low fuel price saved the day.As we monitor multiple sources of input price volatility, it appears that Qantas could be sailing into a storm entirely of their own making. Indeed it is suggestive that the self indulgent (share buy backs) beahaviour has exposed the shareholder when prudent financial strategic management would have seen the business better prepared to handle what are clearly for Qantas at least rising seas and falling tides.