Sandilands confirms what business understands that the vaunted $3billion liquidity will get wiped out fairly soon when the notes out there become due or need to be rolled over.
Short of a miracle or Government intervention the music will stop.
Complete trash! Qantas will have not have problems refinancing debt as it falls due as it has a significant asset base. The reduced credit rating will add about $100m in interest costs to total debt, most analysts predict. There is absolutely no suggestion (and no reliable analytical comment) that Qantas will be unable to refinance its debt when it falls due and will be forced to use cash to pay down debt. (Unless it can generate free cash flow to do so willingly; which is unlikely for some time).
The Government debt guarantee was about Qantas forcing Virgin (or more importantly, Virgins' backers) to back down from the capacity war eating away at Qantas' most profitable base. Nothing more, nothing less. Virgin showed it could tap its owners for capital. Qantas wanted to go one up and tap the government for a debt guarantee.
Did Qantas detail why they needed the debt guarantee? No! Did the government (PwC) analysis see why Qantas needed the debt guarantee? No!. If there were some pressing liquidity issues facing Qantas, would they have backed down on the debt guarantee so readily? No! Are there potential refinancing problems? No! Neither Qantas nor Government/independent analysis show any near term problems.