Qantas stays on sidelines as Boeing orders jump
Qantas International chief executive Simon Hickey this month said he believed the international business could return to profitability with its current fleet, particular as its ageing 747s are retired.
"What we need to do is what we have been doing – to make sure we keep on driving our costs down and get our productivity right on the aircraft and that will get us to a position where we are profitable again and where we will be able to invest again in the future," he said.
Qantas International is cashflow positive but loss-making after its large depreciation charges. Mr Hickey said buying new aircraft to lower operating costs wouldn't necessarily be a financial panacea because of the capital cost and future depreciation issues.
Heard something similar recently, that not only was QFi cashflow positive, but
all QFi routes were cashflow positive. So according to SH, depreciation costs are holding International back.
If this is the case, why are older aircraft (which have lesser depreciation costs) being retired, and not newer aircraft?
Haven't management been banging on for years that our competitors have an advantage over us, in that they have accelerated depreciation schedules compared to Qantas? By SH's logic, wouldn't this have a negative impact on profitability?
Also, considering that Qantas own a considerable part of Jetstar's fleet, how much does the depreciation of
Jetstar's aircraft contribute to the adverse depreciation costs of QFi?
Why is it that QF was willing to spend $130m to gain more 'transparency' between the profitability of International and Domestic, but apparently don't see the need to inform the market of things such as leasing costs between JQ and QF?