Who are The Motley Fools......?
Alan and the board !!!
According to The Motley Fool investment adviser....
Source: Motley Fool
"JP Morgan says the 'Flying Kangaroo' will continue to rack up losses until 2016.
That's hardly surprising.
Regular readers will know we aren't overly keen on airline stocks, for many reasons.
Those include being subject to too many issues beyond the control of management such as accidents, plane defects, poor weather, a unionised workforce, booking software issues, terrorism, exchange rates, interest rates and the global price for fuel.
Add in the high costs of said planes, the capital intensive nature of the industry and the resultant high debt levels, no competitive advantage and the fact airlines sell a commodity product -- with the winner offering the lowest priced ticket -- and management have an almost impossible job of keeping the airline in the sky.
The national icon is said to be looking at asset sales and could sell its Freight division, according to the Australian Financial Review. A float of the Qantas frequent flyer program could also be on the cards – with the division among its most profitable, and estimated to be worth up to $3 billion.
Qantas -- you are selling the wrong assets!
Selling off assets is a temporary reprieve at best... unless they could sell off the airline itself. Only problem there is a lack of willing buyers!
JP Morgan now says that debt reduction strategies will have little impact on the company's "current difficult operating environment."
Current difficult operating environment? Try permanent. If someone can tell me how Qantas' operating environment ever improves, I'm all ears.
Qantas shares have dropped 30% in the past twelve months and are down a massive 85% since their $6 high in 2007. But the stock could easily go lower from here.
As we said in October last year, avoiding the market's potholes is key to generating decent long-term returns.
Qantas, sadly, is one of those potholes."
Well, I think we all knew this, but the "red flags" are flying from investment advice web sites such as this one, and this is further bad news backed up by the comment from JP Morgan (20th Jan)