Tax on earnings?
I thought all companies were levied tax on profit?
Correct.
Amazing in the sense that in $2billion cash EBITDAR only $60million is paid in tax. Thats great, I wish my after deductions bill was only 2% of my earnings. They have a very active balance sheet that maximizes cash income and reduces tax payable. Good on them, the accountants they have employed have set the business up to save most of their EBIT as cashflow to invest in the business.
It's just a shame that the cash they are making on the Qantas brand is being reinvested into a low cost carrier employing people on 3rd world conditions.
To see the extent of the so called losses by the Qantas segment and the profits of the Jetstar segment, Qantas leases quite a number of aircraft to Jetstar. The depreciation on those aircraft is realized on the Qantas side of the balance sheet. The cost associated with the leasing is eliminated at the end of the day because its an internal money transfer.
So whose balance sheet looks good ? Who is left holding the depreciating asset impacting 'profit' and who is left with a rosy balance sheet ?
9 x A330's at a minimum. Who pays depreciation ?
How many A320's are owned by Qantas subleased to Jetstar ? Who pays depreciation ?
How many A320's are leased from Jetstar Asia to Jetstar ?
As others have pointed out how much money did Jetstar Asia make in profit by leasing aircraft to Jetstar (oz) ?
It must be really good fun being an accountant being able to make the balance sheet look the way you're told to make it look like.
All we need now is a 'muffins' column as they are the highest yielding product in the group apparently.