Originally Posted by
43Inches
I think you really don't understand that a company can't just generate infinite shares from ever producing more shares. First they have to be worth something, to get the desired return, then there has to be willing buyers which is usually not an issue, and then you have to avoid diluting investors shares already invested. Every time you float more shares each share loses value, which turns off potential investors if that continues. Coles is going down a similar path to QF at the moment, its quest on dominating market share is seeing it setting up stores to compete with its other stores sometimes within a km of each other. The onus is then placing ever increasing pressure on labor to cut costs in staff numbers and conditions which are now below award. QF wont get away with that for pilots as its in a highly competetive environment so its starting with the stood down FAs and other segments. The writing is on the wall for both companies.
No one is talking about infinite shares; that's simply a nonsensical straw man. Qantas bought back well over 500 million shares between 2012 - 2019; that gives them the flexibility to re-issue share via an equity raising without significantly diluting share value. That is not something that Rex has in its bag of tricks.
Rex's HY1 results are comparatively much worse than Qantas's. Rex's revenue for the half of $116.5 million was down by just $9 million on HY1-21 but their operating loss (EBITDA) was over $33 million. That compares to an operating profit for HY1-21 of $24.8 million off of revenue of $125 million. That's nearly a $60 million swing over a year. What's the fundamental difference between the six months to December 20 and the six months to December 21? Jet ops. It should be ringing alarm bells.