Originally Posted by
CurtainTwitcher
Hypothetical questions are raised in my mind. Why can't the soon to be ex JQ A320's be sold on the second hand market instead of being rolled into Network? Is it likely there a difference between the book value & the achievable resale value? If there is a difference, could this be the the source of the capital issues?
Lots of assumptions in those thought bubbles, just musing.
Very good points.
There is a crossover where old versus new is considered necessary,
a large input in the consideration is the fuel price.
Simply put if fuel is cheap enough, it makes sense to hold on to older aircraft, despite supposed higher maintenance and operating costs.
With the IATA required reductions in CO2 difficult to achieve with the current fleet metrics, fleet renewal was increasingly obvious.
The fact that the RPK costs 64% more to deliver across the Pacific is empirically relevant when considering the relative urgency of the renewal.
It may well be, contango in the fuel price and an increase in the cost of capital forced their hand.
We were prepared to consider the narrative of RealityCzech with the caveat that they 'didn't' need a fleet renewal if fuel price was low. We surmise that the narrative of Relaityczech is more an industrial theme that has been used many times before. Qantas has demonstrated a liking for fear and doubt. Scaring the staff is an airline management preoccupation. Effectively QED, Qantas needed a new fleet.
Effectively a book value of zero represents the accountant perception. Depreciation schedules vary enormously from jurisdiction to jurisdiction. Economic life in an asset is a different metric.
Given the current JQ fleet of A320 are older and may in most jurisdictional contexts have a close to zero book valu,e perhaps the only place they can go realistically is into yet another subsidiary?