QF: The Virgin distraction
A recent $1b raising from the Roo had a couple of curious analysts asking questions.
I get the Virgin rhetoric. They are very vocal. Yes, the numbers are untidy and the previous bloke blew a lot of cash.
But what about its own house?
The USA and OZ Domestic markets will recover faster compared to some other markets. The below businesses are of concern financially during grounding, but more importantly for the following year after the vaccine, will continue to be heavily loss making. They also don’t have much say in the dramas in Singapore and Vietnam, they are at the mercy of the other shareholders due to previous issues.
QF International
Jetstar NZ
Jetstar Singapore 50%
Jetstar Japan 30%
Jetstar Vietnam 30%
Both Airline groups in this country are facing the same predicament. Balance Sheets are going to be wiped to zero. One can fund future loans against it 787s, the other can’t.
A $2-3 Billion Dollar Loss isn’t out of the question. A $1b loss post Vaccine also is not unreasonable. The bottom three on that list above face a very diminished near future, and will need large cash injections.
Is Airbus still wanting its cash this month and for the next three years for its narrow body fleet replacement? Because that was budgeted to be one of the largest financial commitments in the companies history. Those Bills start this month.
I think too many stones are being thrown.
Last edited by wheels_down; 4th Apr 2020 at 10:39.