QF Shares hit $1.00 Discuss

[moa999]

B772, Thats eactly the issue QFi has.
EK with a government owned airport that bends over backwards to build new facilities and has built a massive efficient hub operation.

Competing against QF, EK takes traffic from

PER/MEL/SYD/BNE to Dubai then onto those six UK airports plus plenty of other Euro destinations

But it does this by also mixing pax traffic from
AKL/CHC (via Aussie ports)
but more importantly
KUL, SIN, BKK, PEK, ICN, NRT, HKG, MNL, CGK, HCM, CMB and 10+ Indian cities

The hub is the killer, particularly with all the traffic coming from Northern Asian regions... There is just not the demand just out of Australia, so QF has slowly been losing everyone going to other destinations (eg MAN)


RedQ may have helped this situation but DXB is just so well situated for the current range of aircraft.
Even if RedQ had started it still wouldnt get traffic from India, Sri Lanka, Pakistan as they would be flying backwards, but could at least have hubbed traffic from Singapore, Malaysia, Indonesia, Phillipines.

[SOPS]

QF could hub out of Dubai, anyone can, its has an "open skies policy". Qantas could hub into Dubai and fly 777 to ports in Europe and where ever else they wanted.

But that would not fit into the grand plan of running the airline into the ground.

[grip pipe]

There seems to be a readiness to equate the share price of Qantas with a lot of intangible issues such as management, staff, equipment etc, but these are all how the business is done factors and not product and market share factors. Product, market share and sales volume are all that matter in the stock market valuation of the company and the returns on share ownership by way of dividends and share bonus issues. All physical assets are only ever what a written-down market disposal would bring, which is probably about 30% of book value.

A market value of $1 is not an issue for Qantas as a business. From a crude accounting perspective the business is divided up by its share register to arrive at a value per share and there are a lot of those $1 shares out there and still would be at ten times the price, big share book.

Qantas as a group of companies generates healthy sales revenues and hence cash flows and is able overall to generate an operational profit on the price above the cost of its product. It is not a basket case and has well run divisions which all contribute to the company's overall financial health. The business is therefore well differentiated in market terms horizontally. Vertical integration is a limiting factor as the loss of market share on and in international travel markets demonstrates. The company has insufficient capital to become an Emirates or United and given current international economic conditions absolutely no chance of growing this market, which is being shared by more and more competitors on a weekly basis.

As long as the company generates those cash flows and manages its costs it will remain profitable. So the issue of the market valuation of $1 is of concern only to shareholders who are expecting or demanding a capital gain on their holding. The valuation of course makes the business immediately obtainable in terms of a market bid for a controlling interest or even private capital consortium management, that is of course a matter for the Board and the interests or connections they represent to worry about not investors or ordinary shareholders who would see an immediate capital gain were such an offer to arise.

Profitable domestic business with dominant market share, growing leisure class travel arm and with an international side that can still hold over thirty percent market share sounds pretty good to me at a buck a share.

Possible market buyers or current managment are not going to commit corporate suicide by meddling internally much more and so it seems current staffing and management structures will remain which indicates a stable internal business. Everybody inside would have to be fine excepting the inevitable fallout from the rationalisation from older stuff like the 747, continued push for wage containment and the need to manage reduced expectations for those fond of foreign overnights, if you don't mind domestic overnights business will be fine. Question is will A380's or B787's do the trick and hold the line in the international travel market? Who knows need a crystal ball for that one.

[crystalballwannabe]

Bleeding

Been looking at Depth into the financials of QF.

I really feel for the people with an "emotional" interest in this situation i.e the pilots. But the writing has been on the wall for sometime....

Profit = Revenue - Costs

The revenue has dropped and I think a return to around the 11.5B mark is probable over the next few years. QF ranks 44 worst out of 50 for the ASX50 for current return on equity. Its somewhere between 2-4%

As far as the shares go, a fairly significant amount of dilution occurred with the offer at $1.40 I think after the GFC. This is affecting EPS

Lets look at a current investment in Westpac Bank. Price is amount 10 times earnings. This means in 10 years you will double your money assuming a dividend payout ratio of 75% i.e. 7 percent annual return. Remember 72/(number of years) = Percent per year required to double your money. This would appear to be a good investment with banks ability to "control" margins with interest rates/fee's and things like mortgage insurance. It is also environmentally friendly.

Now look at QF. With 5c EPS which is now likely over the next few years, times it by 10 and you have 50c. With no dividend, you are Gambling on "growth" creating value. Growth is not coming QF's way anytime soon. At 1.08 its "unattractive" for value investors (takeovers) and Buffet or Graham would not take such a gamble until it prob dropped to something like 40c (5 times 12 less one third).

Now look at something really simple like QF wanting to shed Second Officers. Last one first off means A380 officers need to go. They actually need them to stay because flying to the USA in that thing is about all its good for. This means 747 S/O would need to be trained up costly money they already don't have. Or they can sit around on Blank line rosters.

Domestic is sound. Jetstar is sound. International has major geographic problems that have been caused by the rise of nations with geographic advantage.

The best it can hope for is USA, Hong Kong, Singapore, Bangkok, Shanghai, Tokyo. Maybe Joberg/Manilla etc depending on the global economy which is demographically dismal. The 29 crash causing the great depression was caused by a growth period much like 2003-2007. The market has "stop bars" now for large one day crashes - but expect the market to deflate over the next 5 years.

One more thing. We are victims of expecting growth because we have had growth in this country for 20 years. Its not always possible to grow a business.... Investors have become "traders".... They will pull their money out of businesses that are not growing for a better deal elsewhere. QF "encouraged" this behaviour when it stopped paying a dividend. A better dividend policy would have been prudent for at least the last 8 years. Looking at the dividend yields paid previously, I don't think they were appropriate...
The opposite of Berkshire Hathoway is to have investors pulling out their money during business cycles.

I think broader economic conditions in the next few years will create the opportunity for Jetstar to become QF international without to much fuss. The idea of this being outrageous or sensible will depend entirely on YOUR PERCEPTION based on your individual circumstances as an employee, manager, shareholder, bystander.

The next management team at QF could be far more ruthless than the current one, intact I would suggest at my peril that it is actually doing a few things right in some area's, and certainly not in others....

I would not expect the Govt to intervene - the masses want to fly around for 69 bucks that is just fact. Its going to cost more to park your car soon then fly if it doesn't already.

Such is life. Don't hate the player - hate the game.

[balance]

Jetstar is sound.

Jetstar is only "sound" due to significant subsidy from QF. It couldn't, and wouldn't exist if it weren't for big (read - soon to be smaller) brother.

The theories you state are only valid if you believe the financials that QF spout. And if you do believe them, then I've got a bridge you might like to buy.

Simple fact of the matter is that QF is currently all about deception. It is smoke and mirrors. There are things happenning in the background, and faceless men with ulterior motives.

Don't believe all you read, crystal.

[crystalballwannabe]

Granted.... The group as a whole is sound would have been a better statement although there are about 30 companies comprising the Qantas Group which could be trimmed.

I have no doubts the Qantas Brand and company will survive and prosper as a whole, but there will be some short term "pain".

Faceless men have a lot to juggle at the moment - I wish them well.

[DEFCON4]

And all the employees wish them gone

[ALAEA Fed Sec]

And all the employees wish them gone


This is not true. Around 1400 Qantas employees have answered the engagement survey. About 7 of them think management are doing a good job.

[balance]

Steve, that figure has left me gobsmacked.

7 people really think that they are doing a good job? One might be a stretch, but 7...? Good lord.

I'm going to have to go away and have a bex and a nice lie down now...

[ejectx3]

Olivia must have 7 residences with 7 ip addresses

[Clipped]

PRESENTER:
Love your views on Qantas this morning, fears it could under. It has warned the Federal Government it could disappear if Etihad Airways is allowed to double its stake in Virgin Australia. Joe, should we protect it?
JOE HOCKEY:
Well, we should assist Qantas, Qantas is an Australian icon. It's a hugely important piece of Australian infrastructure. I don't think it's going to go under if Etihad increase their stake holding. Already, Air New Zealand and Richard Branson have much larger stakes as foreign investors in Virgin than Etihad. But look, we have to make a decision about whether Qantas does become a major international airline with a majority ownership overseas or whether we want to retain it and pay a price for retaining it as an Australian icon.
PRESENTER:
I suppose the going broke threat is sort of an ambit threat as you say, no-one really expects that. But I think Alan Joyce is making the point Tony that ‘Hey, we have got to compete against all these airlines that are owed by governments, subsidised by governments. We have these shackles on us about how ownership and how we operate. Have a level playing field, let us free if you like.’
TONY BURKE:
There is always tension there between the fact that Australians are really proud to have your own airline in Qantas, but the tension as well…
PRESENTER:
Does the government need to move to take those shackles off Qantas?
TONY BURKE:
As I say, Anthony Albanese is the Minister for Aviation and will be able to go through it in greater depth than I can but you have real tension in making sure you provide the best possible prices for consumers, the flexibility in a competitive market and also respecting an Australian icon.
JOE HOCKEY:
Alan Joyce is doing a great job as chief executive. This guy has been under the pumps, the unions have been outrageous with Qantas, and all strength to his right arm for changing the company.
PRESENTER:
Joe, Tony, thank you both for joining us.


Joe is obviously a big fan.

[ALAEA Fed Sec]

Olivia was Joe's former advisor.

[Wonderworld]

I remember reading Rob Gurney received his 'marching orders' in a QF press release about a month ago.

Not before he had a last hurrah in a hotel in New York for about $1500 USD per night.

[...still single]

Those outrageous unions, wearing their red ties, wanting to keep jobs in Australia and stuff.

About time somebody stood up to these dinosaurs. The future of Australia lies in outsourcing as much labour as possible to Asian countries with poverty stricken workforces. This is the only way Qantas can survive!
Why can't you people see that?

[moa999]

And look at the Australian International Shipping Industry. In marginal industries that are globally competitive the cheapest country, ie flag of convenience wins -- and its not just wages - its the whole gamut -- taxes, depreciation, airport and landing charges, government route rights and efficiency and practices.

At the moment QFi is behind the eight ball on a hell of a lot of those 'controllable' measures.

Thank goodness there is an Australian Domestic Airline Industry, otherwise the International Industry wouldn't exist. The more Tiger,Virgin (and indeed Jetstar) grow the less chance of QFi surviving.

--

Whilst the grounding was damaging so were the on again-off again strikes (admittedly not pilots, but frankly on the timing all on the same bunch)... I know a number of large companies who were shifting important flights completely to Virgin, not willing to risk a strike and cancellation response - without the shutdown there was a risk these clients were lost for good --- they are all back with Qantas... Short term expense traded for long term revenue -- any day of the week.


... a rationalist and a QF shareholder...(at $0.95)

[Capt Kremin]

The division of Qantas has been further outlined by Qantas management. Basically anything that is a cost to the bottom line has been put in the International division; anything that may make a profit goes to Domestic.

Vis:

International: Training & Checking, Flight Technical, Operations Support, Safety & Compliance, Flight Crew Resourcing

Domestic:Training Facilities & Commercial

:mad:

[1a sound asleep]

https://www.youtube.com/watch?v=7-2BlaVxSKE&feature=player_embedded#!

[22k]

God how much do you reckon that cost? Throwing two letters on would have cost a total of at least half a mil when you factor in the wanky video etc....

Great use of cash.

[tail wheel]

"....and all strength to his right arm...."

I suspect it gets plenty of exercise.........

[Fris B. Fairing]

Could we please have a "get your hand of it Darryl" emoticon?
:yuk:

[V-Jet]

Basically anything that is a cost to the bottom line has been put in the International division; anything that may make a profit goes to Domestic.

Is that factual?

If it is (and I'm not doubting your word) then they are merely repeating the Jetstar process with Qf itself. I might make a bid for the 504k in the checkin area at Syd Dom, because soon there won't be much else left. Who knows? it might just be the nucleus of a Charleville, Cloncurry, Winton, Longreach service. I say service, but I mean LCC of course.

[Mstr Caution]

Even if you live in Singapore you can still be Australian at heart. Clever.

More like:

Even if your BASED in Singapore you can still be Australian at heart.

As for the line:

"Everything we do is focussed on the people that fly with us"

Grounding an airline & stranding your passengers, not so clever.

Qantas needs to get back to basics, give people a reason to fly with them.

The travel experience is remembered, long after the price is forgotten.

[Capt Kremin]

V-Jet, the disposition of the various departments comes straight from a email from senior management.

[V-Jet]

Thanks Kremin, appalling, but thanks.
Fairfax guys had the decency to resign when things went on they obviously weren't happy with. Our lot just pin their ears back and trough on....

[Donkey_Punch]

Why don't we petition Gina to come in and make some kind of move on QF? That would be one way to dispatch some of the rot!

[Arnold E]

Our lot just pin their ears back and trough on....

Very little ethics in aviation.....

[Fruet Mich]

Spirit of Australians, lip stick on a pig!

Just a great distraction and attempt by AJ to make his customers think he is all about Qantas while quietly in the background Jetstar, his real passion expands exponentially!

AJ recently quoted from the IATA conference that he was proud that Jetstar had more aircraft in 7 years than Ryanair. AJ wants more LCC involved in IATA. he might be CEO of the Qantas group but we all know his true passion at the top.

Current Airbus orders Qantas: A320 = 145
Current Boeing orders Qantas B737-8 = 11

I'm pretty sure we could assume these A320's won't be painted in a red tail.
And we wonder why Qantas international is all of a sudden making a massive loss? How else can we explain why we defer/cancel 8 A380's. AJ needs to free up capex to enable the expansion and purchase of shyte loads of A320's.

He's selling the shareholders the dummy. in 2008, Qantas group made over $1 billion, Qantas international had good route structure and Jetstar had around 20 aircraft, no international A330's, and no Jetstar asia. In less than 5 years Jetsar has grown to a fleet of 11 International A330-200's, 47 A320's and 6 A321's with 145 A320's on order. Now after only 4 odd years of AJ Qantas international is making a massive loss.

Qantas commands one of the highest load factors internationally and arguably are the most expensive to travel with. But hey it still makes a loss of $450 million!

Keep making international look like they are making a loss, reduce flights, free up "Qantas" capex by cancelling orders so you can have capex to invest in other ventures.

I really don't think this is about unions, although that does work as a convenient smoke screen to expand a product our CEO cares dearly about. A very smart wee man who has a vision and a need to cement himself in aviation history as has his good friend O'leary in the north. Very very sad about what was a great aussie icon. Unfortunately unless we have a change at the top the future of the Qantas group is all orange. He has the keys to dad's car and he's going to thrash it to death and bring it back with the tank empty.

Smoke n mirrors 101

[Toruk Macto]

As the Jetstar CEO, Alan could not ask for a better desk to be sitting at than the one the Qantas board has given him !

[WorthWhat]

Hmmm! You have tabled some very astute issues Mich.
Nonetheless, just how significantly the points you raise impact on Qantas Mainline, depends very much on how much On & Off balance sheet debit Jetstar Asia and Qantas have on their respective books and which entity guarantees what.
Investment Analysts with access to the annual reports of Jetstar Asia & Qantas should be able to work it out, but why would they, no profit in kicking an already depressed share price and P.E. funds looking to buy a bargain aren’t going to say.

[struggling]

Solution of course is for Shareholders to persuade the Qantas Board to separate Qantas from Jetstar by publically listing 49% of Jetstar Australia.

Independence would then be obligatory and transparency clearer.

[mohikan]

Worth What / Struggling / Woodeye (you are all one and the same it seems)

There is zero chance of Jetstar being separate listed an sold. This is because to do so would expose the actual state of the JQ groups finances and more importantly cut off the QF funding lifeline as well.

Regardless of that also, it doesnt suit Geoff Dixon's purposes either. Have a look at the ultimate owners of Orange Star holdings. Hmmmmm.

Regardless of the anti union crusade, Joyce's current plan will fail because it doesnt address three fundamental cost issues of the Qf group. Namely:

1. Qantas has the highest number of staff per airframe (143) of any carrier in the world.

2. Qantas has the highest management and administrative costs of any airline in the word (from the annual report, and an extension of point one also)

3. Specifically, many positions within this administrative and management structure are paid significantly more then their peers in Jetstar, and indeed in other 'full service / legacy' airlines.

After watching this sorry saga for the last ten years, the only conclusion I can draw is that the argument is not about costs.

Its about super sized egos, hubris and get square.

[WorthWhat]

Your backhanded agreement is most gratifying Mohikan. One should always be pleased to be lumped in with esteemed company.

Yes, I support the views published by Fruet Mich and also agree with the solution Struggling has put forward.
However, that it may, as you point out -

· Expose the actual state of the JQ groups finances, and
· Doesn’t suit Geoff Dixon's purposes either.

Is no reason why long suffering shareholders should not seek to obtain value from a reorganisation of Qantas holdings that its workforce may well support?

After 10 years of observation I expect you believe there is a better way to ensure the Qantas Group can survive the ravages of fierce competition between Asian & M.E Airlines that will surely bring Qantas’ Asian & European operations to their knees if QF can’t take delivery of the 50 B787’s it needs remain competitive?

Looking forward to hearing from you.

[B772]

There are 'whispers' the QF Balance Sheet at present shows Current Liabilities as being greater than Current Assets. Also the Current Liabilities are greater than the Shareholders Equity !.

[ALAEA Fed Sec]

I reckon I could select a few liabilities to get rid of.

[600ft-lb]

B772, facts not bull**** is the order of the day. It's encumbent on the CEO to call in liquidators/receivers if the company is insolvent. It's not. If you know something the general share trading public don't then that would be insider trading. The traders have determined the current share price based upon current facts available to public. The rest is bull**** or insider trading.. What is it?

[The The]

No secret there 772. Only have to look at the half yearly report to see that Qantas has Negative working capital. It shows a current ratio (current assets/current liabilities) of approx 0.88

Then look at Virgin. Same story but appears worse. Current ratio is approx 0.7! Shock Horror!

It doesn't mean they are insolvent.

About half the current liabilities for each is unearned revenue. That is, tickets sold but not yet travelled. That's the nature of the business and shows why Current Ratio is not a good analytical tool when looking at airlines. In fact a high unearned revenue would indicate a good thing as it reflects positive forward bookings.

Both are operationally cash flow positive, which is probably more important short term wise.

Suggest you read up on Accounting 101 before scaremongering!

[Sunfish]

Could I be forgiven if I wonder if the Board and Management is working for the benefit of ALL shareholders, or just a select few...who might not even be shareholders at all just now?

The APA bid stank.

[teresa green]

If it was Australians are into the Spirit, I would understand it, go to to any bar and there it is right in front of you. Australian's Spirit are being sorely tested by stupid taxes, open borders, incompetent pollies, crap roads, crook hospitals, and spiraling prices, and their National Carrier limping along with one of its wheels nailed to the ground. Right now the only Spirit they can find goes with ice.:ugh:

[jaded boiler]

Obviously not a glass half full person.

[Arnold E]

Obviously not a glass half full person.

Nup, have to agree with TG

[desmotronic]

A group of wealthy individuals, including former Qantas Airways Ltd. (QAN.AU) management, is working on forming a syndicate to make an offer for the company, the Australian Financial Review reported Thursday, without saying where it got the information.

The newspaper reports that the syndicate has recently been testing lenders for debt financing. A Qantas spokeswoman declined to comment on the reports. Qantas shares were up 0.2% at A$1.10 early Thursday.

[hotnhigh]

A group of wealthy individuals, including former Qantas Airways Ltd. (QAN.AU) management

Trying to think of that word that starts with c to describe these individuals.

Oh, that's right..............champs.:mad:

[teggun]

Qantas Management are playing a very clever game, everybody has taken their eye off the ball. Everyone thinks all these A320 orders are going to go to Jetstar.

Have a little look at what is happening a QLink, new COO, new Chief Pilot new head of maintaince, apparently the guy who was in charge of overseeing the repair of the A380 that had all the drama's.

These people are not being positioned to run a Q400 operation, they are being positioned to expand QLink into the domestic market and reduce the mainline flying and overheads.

While also taking some flying off Jetstar, by doing this it will have a couple of effects, it will reduce the cost structure and aslo allow customers to believe they are flying with the Qantas mainline product.

It will also allow the figures that have recently come out indicating Virgin are carrying more passengers than Qantas to be retrieved from Jetstar and placed back under Qantas Domestic figures.

Mainline Domestic pilots will probably be given an option to apply to QLink and this will be the new Domestic B scale.

Watch how the game is played, all this will probably occur in the next twelve months if not sooner.

I know what the response will be, QLink will never gets Jets, they will go to Alliance or Cobham etc, just go back to the facts and look what is happening, at a very fast pace.

[FYSTI]

Qlink are getting Jets - they have already been told by Gissing et al with "we are not going to turn this into Jetstar". This makes it a double edged sword. It gives management leverage on the one hand against "internal" groups, yet on the other it gives Qlink pilots jet time in their logbook, and hence increases their employability elsewhere. From what I understand, Qlink has a relatively high turnover as it is. I note that Emirates, for instance requires Jet (http://www.emiratesgroupcareers.com/english/Careers_Overview/Pilot_Jobs/Minimum_Requirements.aspx) time. I'm not suggesting pilots will all go to Emirates, rather it gives them much more scope for alternatives than just Dash time does.

Its is also interesting that in the domestic sphere QF shorthaul (http://www.scribd.com/doc/72097306/Qantas-Short-Haul-Agreement-2007), Jetstar (http://www.scribd.com/doc/72097178/Jetstar-EBA-2008) and Virgin (http://www.scribd.com/doc/72097092/Virgin-Blue-Pilots-EBA-2007) are very close pay wise - if one reads the contracts closely (super salary, days-off penalty, profit share & retention bonuses), . Why have Jestar & Virgin pay increased over time - especially with the JPC negotiating? Ultimately companies need to be competitive to retain pilots. As Bruce Buchanan said at the Senate Inquiry on the 6th Feb 2011 (http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=rrat_ctte/aircraft_crew_2011/hearings/060212.pdf), the "market price" for a Captain is US$200K. Taking tax into consideration and the high marginal rate it needs to be higher in Aus to retain crew, which is what we see domestically.

Qlink, however may be able to offer something else, perhaps lifestyle to retain pilots for reduced pay. Jetstar can only offer "flexi-lines" to the newest 10% of crew, giving them a carrot to stay for the full-time contract. Without that, most would leave quickly with sufficient hours on type.

Not saying it is of no concern, however there are nuances for both sides to consider.

[Baxter Dewall]

Qlink are getting Jets - they have already been told by Gissing et al with "we are not going to turn this into Jetstar". This makes it a double edged sword. It gives management leverage on the one hand against "internal" groups, yet on the other it gives Qlink pilots jet time in their logbook, and hence increases their employability elsewhere. From what I understand, Qlink has a relatively high turnover as it is. I note that Emirates, for instance requires Jet (http://www.emiratesgroupcareers.com/english/Careers_Overview/Pilot_Jobs/Minimum_Requirements.aspx) time. I'm not suggesting pilots will all go to Emirates, rather it gives them much more scope for alternatives than just Dash time does.

Mate, with all due respect, this has been bandied around the traps since Adam was a kid. And please tell me which jet will service DPO,LT,DBO, WG,ARM,MRB,CCY,etc etc.

QF already have NC servicing most of regional OZ with the B717, and just reintroduced the Operator into SEQ. That deal is sewn up until 2018 with a 2yr extension clause.

This is not the ideal financial climate to be introducing new types. One only needs to read the myriad of posts that are cut and pasted on this site from media releases by many carriers deferring orders at the moment.

The carrot of jet equipment has been doing the rounds for ages at SSA and EAA. One QF Regional did infact operate jets, but that was a long time ago and the climate has changed. For the life of me, I can't see it happening again.

[FYSTI]

Baxter, you are correct about "since adam was boy", Qlink have had a narrowbody jet clause in the EBA since the days of Pontius.
You are also correct about deferments - however, has there been any recent developments in the Qantas group that have made sense? QF did put in an order for 110 A320's, where are they all going to go?
from the press release (http://www.qantas.com.au/travel/airlines/media-releases/aug-2011/5158a/global/en) [my bold]:
The Group has committed to order up to 110 A320s (106 confirmed from Airbus and four additional aircraft, either purchased or leased, subject to availability). These aircraft will facilitate capacity growth across Jetstar’s domestic and international operations, the launch of Jetstar Japan and the establishment of Qantas’ new premium Asia-focused airline - while the purchase rights and options provide the Group with significant flexibility to pursue further growth opportunities on favourable commercial terms.

Can they defer or are they committed to delivery without a large penalty now that the Asian premium carrier has been extinguished? Where would they send them? One obvious answer would be on routes currently served by B737's, as Jetstar did.

Just for the record, I in no way benefit from Qlink getting A320's, just the opposite.

[teggun]

They won't be operating jets into WG, DU, and the rest of the regional ports they will be operating into ports where Qantas Domestic operate now.

While also taking some of the Jetstar flying allowing them to operate Qantas color's back into various ports, allowing them to take pax numbers and placing them back into the monthly and yearly pax figures for Qantas Dom.

Open your eyes, lower cost structure, premium product same thing as what's happened with Jet Connect.

All the big management are moving into place, you need to remember Qantas does everything by stealth.

Everyone is too concerned about Jetstar and their not looking at the big picture. :eek:

[gobbledock]

Qlink are getting Jets - they have already been told by Gissing et al
with "we are not going to turn this into Jetstar".
Oh yes, lets believe JG. The master snakeoil salesman has spoken, it must be true!!

[Keg]

I wonder whether that's a similar line to 'Impulse will never be more than the 10 717s they have now', or 'J* will never fly international'. It's what you tell someone to keep them happy and compliant. Are there shortages of crew at Qlink at the moment? Are guys and gals leaving for DJ? Is this a way they can keep them a bit longer? Dangle the carrot of the big shiny jet?

When they're parked on the tarmac in Qlink colours pushing back on their first revenue services with former Dash drivers in command/ F/O seats, then you can believe them. Prior to that however.......

[Di_Vosh]

Oddly enough, during his recent roadshows J.Gissing flatly denied Qlink (Eastern and Sunnies) getting jets. IIRC, he did make the J* comment, but that wasn't in connection with jets; rather that he wouldn't be turning Qlink into Jlink.

IMHO, "Qlink are getting jets" is either wishful thinking or has come from seeing all the new managers from jet operations and adding two and two (to get five).

Again, IMHO, the reason for the bulk change in senior management at Qlink is more due to senior managers in the Qantas group realising what a complete bunch of incompetents they have "managing" what is becoming an increasingly important part of the group.

DIVOSH!

P.S. Agree with Keg: I'll believe it when there is a C-series/A319/whatever parked on B26 at YMML with an Eastern flight crew on board.

[The Green Goblin]

Guys open your eyes will you.

The Airbus orders are not for increasing the fleet. They are to replace the fleet keeping the maintenance down and the costs low. Maybe a couple of dozen extra for the Asian ventures in HK & Japan.

The older 320s are getting close to 30k now. Time to give them the flick.

LCC 101

Keep dreaming.

[wheels_down]

Fleet replacements indeed.

They have two A321's that are approaching 13 years old. Half a dozen A320's are over 8 years old. Half of Jetstar Asia's fleet is approaching 8/9 years old also with some being former Valuair Jets. It will be interesting to see how long they hang onto the A330's for, when you see that half the Jetstar A330 fleet is nearly 10 years old.

LCC seem to average around 10 years on their aircraft, Tiger are about to return its 2004 build A320's, some have gone with the rest to soon follow.

[B772]

QF dropped below a $1 today and closed at $1.005. The 3% odd fall today is due to either news an Institution was selling last week or the financial figures for 30 June have been leaked.

[Skyhawk XP]

Virgin up 4% today providing an investment return of +32.2% over the past 12 months. The Qantas investment return over the past 12 months is -43.9% a difference between the two of 76.1% (ouch)

[crystalballwannabe]

Traders will have the "jitters" until the formal loss is announced a perhaps a credit downgrade to follow....

The next 18 months are very uncertain. Europe is a big problem. Although the prices of commodities are still high, demand has plummeted according to some leading indicators.

[Buckshot]

The older 320s are getting close to 30k now. Time to give them the flick.

Just remind me how many hours OJA has on it now? 100k? :ugh:

[S70IP]

Quote:
The older 320s are getting close to 30k now. Time to give them the flick.
Just remind me how many hours OJA has on it now? 100k?


Ones a Boeing. Ones an airbus.

That's the difference.

[mightyauster]

^^^You are comparing apples and oranges knuckleheads! Shorthaul vs longhaul. The number of cycles is what should be considered, in addition to the number of hours.

[moa999]

capa article on the kangaroo route
Europe-Australia market changed forever as sixth freedom carriers gain scale and drop prices | CAPA - Centre for Aviation (http://centreforaviation.com/analysis/europe-australia-market-changed-forever-as-sixth-freedom-carriers-gain-scale-and-drop-prices-78646)

[piston broke again]

Ok so QF shares down to 99c in early trade. Any predictions on when VAH shares will overtake QF? I'm calling late August, early September!

[Ka.Boom]

How low can it go~?

[crystalballwannabe]

How low can it go?

No one knows the answer to that.....depends on the broader market as well.

The important thing is the airline returns to profitability ASAP.

I think the next 6 months will see a lot of changes. The institutional shareholders need clear direction and strategy not "hair brain" schemes or excuses. If one of them lose the "faith" could be an exodus. Speculators, traders, and short sellers will be circling for a while yet.

[B772]

Approx. 12 months ago the "Bell Ringer" predicted QF would fall to 69c. I reported this on a posting dated 3 Aug 2011 when the actual share price was $1.79. The way things are going QF could be 69c in October this year.

[catch18]

I think it will find support at 80c, but its anyone's guess

[wilcoleaks]

Who came up with the 65 percent "line in the sand"?

Why is that an optimal number for them?

[gobbledock]

QF Shares hit $1.00 DiscussTime for a new thread title and a merge?
'QF Shares hit $0.05 Discuss'.........

[SOPS]

May I ask what they closed at today?

[gobbledock]

May I ask what they closed at today?I couldn't be bothered checking the ASX, and it isn't relevant. It's a ****e investment. Buyer beware!

[wilcoleaks]

$1.14 up 3.64%

This OCT could get nasty with Spain at 25 percent unemployment and hurting and a reporting season potentially full of worse than expected results and credit downgrades for a host of Australian companies.

[Wonderworld]

Closed at $1.14

[gobbledock]

This OCT could get nasty with Spain at 25 percent unemployment and hurting and a reporting season potentially full of worse than expected results and credit downgrades for a host of Australian companies.
Spain and Italy's interest payments are due in October, and Greece and Portugal also have some payments due later this year also.

We are riding the fringe of a perfect storm, it hasn't kicked in yet and don't be fooled. Cast your mind back to the year 1914. By April that year things were looking better than they had been for a number of years. All was good indeed.
Then, June 28 and Ferdinand..............the rest as they say is history.
Don't be blinded by rose colored glasses.

[dr dre]

This OCT could get nasty with Spain at 25 percent unemployment and hurting and a reporting season potentially full of worse than expected results and credit downgrades for a host of Australian companies.


Can I ask why these global factors will only affect QAN, and not the likes of VBA et al? Surely worsening european and international conditions will affect both groups, considering now a miniscule proportion of QF ops are directed to Europe (and london as well)

[gobbledock]

Can I ask why these global factors will only affect QAN,
Of course others will be affected. But this is a QAN thread so we are funneling our discussion into QF.

[FlexibleResponse]

Could it be the intention of senior management to run the share price into the ground so as to allow a "private" third party to takeover Qantas shares at minimum cost thereby defrauding the current shareholders the fair value of their shares?

Management could always blame intransigent and greedy union officials and workers for the failure of Qantas to remain competitive and thereby justify management's and the board's recommendation to the now poor shareholders to accept the takeover bid when it inevitably arrives...

Son of "Project Suzie" is coming back for revenge..?

Alas, all the other so called "issues" are a smoke screen for the real agenda.

http://www.pprune.org/dg-p-reporting-points/453665-qf-shares-hit-2-00-discuss-8.html#post6537182

I generally don't believe in conspiracy theories...but where greed is involved, there is no depth to which some people won't sink.

[wilcoleaks]

If the economy has a "shakeout" over the next 18 months, no one would want to be at the helm of QF, especially someone new.

I think he will be there a while yet.

[catch18]

If virgin post a profit and QF post a loss bigger than expected and also cop a credit downgrade I would expect the share price differential to close to something like QF 80c, Virgin 60c by year end.

If Emirates wanted a deal - it would be done by now.

[Wedcue]

Taken from vflight.net, Virgin's EBA update...


The company must continue to maintain its cost competitive advantage over Qantas and not price itself out of the market. Parity with QF salaries is not sustainable;
The Company’s biggest threat is Jetstar which is being used as the QF growth vehicle now and into the future;

[porch monkey]

VA doesn't have pay parity with QF, and even if the EBA gave the boys their wish list, they still wouldn't. It's a reminder from the management that the earlier rhetoric re valued employees was just that, management rhetoric.

[Servo]

Well said Porch Monkey and VERY true. :*

[CaptCloudbuster]

The Virgin CEO needed to implement 3 simple initiatives to raise then hold pilot engagement.

1 New professional uniform. Check. The initial euphoria has waned and this is seen as more for JBs benefit than crew.

2 Improve Crew Meals. Fail. Pilots are simple creatures. Look on the bright side though, at least you guys don't have to pay for water whilst paxing anymore.

3 Duty travel in Business Class. Fail. JB will "never repeat this mistake from QF". Pity about all the sickies on DPS with the resultant call out and overtime costs though.

[porch monkey]

Amen Capt Cloud. The vast majority understand the need to be competitive. We don't want it all. At the moment though, if the EBA was implemented as the company sees it, we would go backwards. That is simply not acceptable.

[catch18]

2800 jobs gone

Consultants get paid, Australians become unemployed.

How about cutting 1 job and saving 2799.

Sad Day.

[Captain Gidday]

Oh yeah. But it's a 'victory for Qantas' though.

[Keg]

Parity with QF salaries is not sustainable;

Given what's occurring in QF it appears they're not sustainable in QF either! :(

[Wedcue]

I think that's his point Keg, 200k a year SO's are just totally unreasonable, I don't care what side of the fence you sit on. You're not the driver, hell, you can't even "fly" a TCAS event if another pilot is in the control seat. 200k backseat driver.

It's not even that pay rate that I don't agree with, yes there is study involved, yes you are taking risks with your life every day you fly, yes you spend a lot of time away from home, and so should be paid, and paid well. 100 for junior, 120 for the senior FO surely, surely is adequate for the lack of work you actually have to do..
Then you wont have 10 year SO's just sitting there, hanging around..

It's unsustainable.

[hotnhigh]

Then you wont have 10 year SO's just sitting there, hanging around..

Grow the airline and you don't have the problem.
It's all about economies of scale.
In the last six months LHR flying has halved, FRA on the way out. 767 fleet reduced, but what has occurred? One chief pilot has morphed into three. A few more group ceo's have arrived. How much are they paid? And the total number of non operational employees per airframe has increased.
At least the bbq's for the refurbished office blocks were well attended by the "general group manager analysts".

I do agree however that...
[/QUOTE]It's unsustainable.[/QUOTE]
But it's not directly related to SO's pay.

But AJ will keep cutting the wrong bits and pieces because the analysts, yield managers etc say so.
Shrinking to grow. Right on track.

[Seabreeze]

So Liv says

"“Importantly, Qantas is free to run our business as we see fit and not be dictated to by union officials who do not have the airline’s best interests at heart.”

Yep, you are doing this, but the shareholders are unimpressed, and the QAN.AX shareprice remains basically unchanged.

[wilcoleaks]

Fundamentally, I don't think the share price reflects a few things yet

1) 4 Engines vs Two. The A380 should have been 777's and the 747 should be gone by now replaced with 777. Singapore Airlines has 0 747s now flying

2) Complex things like reverse seniority redundancies.

3) Complex agreements and union sentiment that conditions should NEVER EVER go backwards

4) The local competition is doing a lot of things right

Unfortunately, QF shares are now very SPECULATIVE at best.

[CaptCloudbuster]

union sentiment that conditions should NEVER EVER go backwards

AO disproves your point 3:cool:

[crystalballwannabe]

Sell the A380 white elephant

Retire the 747

Put all bets on the 787

MASSIVE GAMBLE but that the best way forward.

Previous management created this situation.

At 1.06US a BIG boeing order seems prudent.

[Romulus]

At 1.06US a BIG boeing order seems prudent.

That being the case an even bigger from the other supplier given Aus$1=Eur0.86

[HF3000]

If QF international is really losing $450M per year, do you think adjusting the S/O pay rate will make much of a difference?

Current management look at revenue vs cost and think the only thing they can control is cost. After looking at aircraft costs and fuel costs the only thing they think they can do anything about is staff costs.

They forgot about revenue.

If you build a premium product, they will come.

Time they had a tour of the BMW and Mercedes Benz offices.

[Paolo]

flew QF business class in Feb 2012 SYD SIN and it was fantastic. The most attentive Business class crew I have come across, and I can compare it to BA, Finnair and Delta.

I hope QF get through this crisis or whater it is described as, because I sure would be happy to fly on the one world network in QF business class!!!!

[SOPS]

The trouble is Paolo is that QF seems to be committed to destroying its Inernational product. If only they would expand it, all would be well. But for the last XXX years (I dont really know)..the only thing that QF seems to do, is cancel routes and add managers to over see the routes that dont exsist.

[peuce]

To me, it still looks like Qantas is hellbent on morphing itself into Austral's largest Travel Agency!

[blow.n.gasket]

Wasn't that JimmyBowtie's original vision?
History being fulfilled ?

[B772]

The QF annual financial results to be released on Thu 23 August will show an underlying profit but a statutory loss for the year ended 30 June 2012.

The announcement regarding a deal with Qatar may be made on Thu 23 Aug. This assumes Qatar will join One World.

[wilcoleaks]

Regardless of how this story ends I think its an excellent example of why NEVER to buy Airline Stock.

[AEROMEDIC]

Given no profit, downsizing, lower business prospects, most assets leased.... who would lend them the money?

There is no lender in today's financial climate worth their salt that would provide the kind of finance required to Qantas, particularly at the current share price which reflects the VALUE of the company.

New aircraft.... forget it!!! :ugh:

[Romulus]

Given no profit, downsizing, lower business prospects, most assets leased.... who would lend them the money?

Plenty. The same amount of money is still out there, looking for a home to be invested in, it's just that investors look for less risky opportunities at present.

QANTAS is that less risky proposition.


There is no lender in today's financial climate worth their salt that would provide the kind of finance required to Qantas, particularly at the current share price which reflects the VALUE of the company.

Nope. The "current" share price reflects what someone sold the last share at and the price at which someone else bought it. It does not represent the prices that you can buy all shares at nor does it reflect the value of the company. It represents what a seller was prepared to sell their share, or part of their share, of the company for to a matching buyer at that point in time. If you wanted to buy all of QANTAS you'd be looking at a fairly massive premium to the current share price.


New aircraft.... forget it!!!

I'll wager a lazy $50 on that.

[Cactusjack]

Regardless of how this story ends I think its an excellent example of why NEVER to buy Airline Stock.Absolutely correct. However some people don't want to face the painful fact that airline shares are a crap investment. The risks outweigh the 'potential' profits.

In Australia, it would seem that out of the lot Alliance would be your best bet? Then again, the mining industry is close to tottering backwards.

ALLIANCE AVIATION SERVICES LIMITED price history chart

http://hfgapps.hubb.com/asxtools/imageChart.axd?TF=D6&TIMA1=0&TIMA2=0&s=AQZ

[AEROMEDIC]

Nope. The "current" share price reflects what someone sold the last share at and the price at which someone else bought it. It does not represent the prices that you can buy all shares at nor does it reflect the value of the company. It represents what a seller was prepared to sell their share, or part of their share, of the company for to a matching buyer at that point in time. If you wanted to buy all of QANTAS you'd be looking at a fairly massive premium to the current share price.

While I AM aware of this, I was talking about FINANCING not a share purchase.
I think you overlook the fact that Moody's downgraded the company to Baa3 from Baa2, one notch from junk status. P/E ratio is 42....not good when the sector is16.
The next review is in October so stay tuned for that one.

Without a return to profit of some kind, a further downgrade would clearly affect the company's ability to raise the kind of finance required to buy'lease aircraft, so it will be interesting to see their next earnings announcement later in the month.

That's what I'm saying. I don't want to get into a debate about this.

To repeat that, Qantas is in deep trouble.

[packrat]

To repeat that, Qantas is in deep trouble.

[ampclamp]

With Q due to report a shocker later this week I note that Mr Joyce has finally swallowed the fact you don't get paid more for poor results.

He has reportedly refused the pay rise granted at the last AGM.

So , is this move designed to head off criticism prior what could be a worse result than expected? He would know what is about to be handed down.

[ohallen]

Most likely an attempt to head off criticism OR Board couldn't tolerate complaints about lack of relativity of pay vs actual results, because he has shown no unwillingness to grab whatever he can.

Lets hope that someone remembers it is cheaper to dump dud management at any cost than persevere with a strategy that has no substance or chance of succeeding.

[crystalballwannabe]

Will be interesting to see how the share price responds over the next few days and what is announced.

[gobbledock]

My sources tell me that QF have definitely been quietly sourcing GSE specifically for use on Hamilton Island....to be con't

[ejectx3]

GSE? Ground services E_______?

[1a sound asleep]

$1.26. So glad I bought at $1. How high can we go?

[Propstop]

Not for long!!
S&P cuts Qantas rating - ABC News (Australian Broadcasting Corporation) (http://www.abc.net.au/news/2012-09-07/standard-and-poors-cuts-qantas-rating/4249370)

[Nepotisim]

Ground Service Equipment.

Power units, start carts, airstairs, stands etc..................:ok: