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Old 21st Oct 2019, 06:34
  #11 (permalink)  
Rated De
 
Join Date: Sep 2017
Location: Europe
Posts: 1,649
After Qantas announced a $2.8 billion loss in 2014, staff were all called on to freeze their wage levels for 18 months, a call that my union was first to heed in order to help the struggling airline.

Dear Mr Purvinas,

A small but pertinent point.
  • The loss in FY14 was a result not of deteriorating trading conditions, rather the write off for the International fleet; The loss was on paper only.
  • As a result, the following year QF reduced depreciation by circa $326 million (also didn't tax) This is the source (when combined with fuel price falls (totalling $527 Million) of the "transformation profit".
  • Senior insiders had "performance incentives" your staff did not. The pay freeze your staff took (and management too) did not include any transformation upside. The insiders had them: Millions of options with issue prices at less than $1.00 vesting post FY15.
  • The transformation profit say the share price surge and"amazingly coincidentally" those same insiders could cash in their options.
Given the rather on book valuation of the A380 fleet, there is high probability that the same play is run again. The write down results from the auditors and "management" declaring the value of the aircraft on books is more than that a sale would raise, hence the "impairment"
Be vigilant for a similar play.

It is a straight out transfer, and a robust regulatory environment would not only have investigated the claims of "terminal decline" in CY11, but also the very rapid "transformation" FY15 as well as the "incredibly well timed option vesting dates.

Otherwise eloquently written...
Rated De is offline