Qantas : Some astute Commentary

[slice]

nitpicker 330 - they were not saying Cathay crew get paid far more than QF crew, just correcting the mindless drivel that The sh1t shovel was posting.

[Metro man]

Remember any Australian pay rates look good from outside due to the strong Aussie dollar which skews the picture a bit at the moment.

The rest of us shouldn't complain about QF pay rates, would you rather be pushing for your own pay rise when QF have had a 15% increase or a 15% decrease ?

[aussiepilot]

Allowances

Since when do allowances and super get counted as salary?

Correct me if I'm wrong, but allowances are for meals and incidentals... as in when you can't cook in your own kitchen.

And super, it's a minimun of 9% if you work in Aus. I'm lucky enough to get a fair bit more than that, but it's not counted when I quote my pay per annum.

['holic]

And now those greedy bastards have sick leave!!!

To be fair though, I did put on an upper storey extension last year using my drycleaning allowance.

[Jetsbest]

Has anyone considered crew complements?

As far as I know, QF is the only company which (when they actually were hiring Olivia ) hired a mix of cadet and experienced pilots all to the rank of Second Officer. This mix, along with F/Os required to have command endorsements on type, means QF has, since Pontius was a pilot, used;
- 1 x Captain,
- 1 x F/O, and
- up to 2 x S/Os for its longer-haul flying.
Does any other company do this? My understanding is that CX use 1+2+1, BA use 2+2+0 as do most US airlines. SQ or EK info anyone?

It's easy to talk about QF S/Os who, by virtue of yearly pay increments with virtually nil QF promotion, have incomes better than competitors' S/Os. What's not so obvious is that the competitors' S/Os;
- are fewer in number for the same flying,
- promote faster to the greater number of F/O positions for the same flying,
- ultimately reach command (ie top dollars) much sooner too, and thereby
- have the potential to aggregate much greater wealth than an average QF pilot (divorce & other disasters excluded ) during a career.

There are pilots in QF with well over 10K hours and absolutely no command opportunity in sight under the apparent plans of current management. Are QF competitors siphoning off flying to wholly-owned subsidiaries or downsizing pilot numbers with A380s? And which competitors allow pilots to stay past 60?(just saying, not complaining; it's the law) The stagnation in QF mainline is demoralising and, yes, more pilots are probably considering leaving.

And some wonder why there might be some frustration...

[maggot]

Originally Posted by 'holic

To be fair though, I did put on an upper storey extension last year using my drycleaning allowance

hmmm, that sounds tax deductable to me

[bangbounceboeing]

so is 160k a year a realistic figure for a 5-6 year SO with Qantas ? Somebody says its 75k a year others 180k a year there can't be that much spread..............

[ampclamp]

Kremin has the credibility imho. The other is a blow in.

[noip]

so is 160k a year a realistic figure for a 5-6 year SO with Qantas ?

Nope. Not even close.

This is Taxable income I'm talking about, not meal allowances, Super etc and that is before you start deductions for dry cleaning and other work expenses. Just hourly pay and depending on type overtime.

Also, there is no "one" figure. I could quote $90k or $120k or whatever, but it depends chiefly on the aircraft type and overtime performed. Overtime might add 15% to pay, maybe a bit more for a more senior person.

Finally, the trouble with all this is that someone "knows" someone who went all out and did very well one year and suddenly everyone else is supposed to have made that same amount. Likewise, you ask what a 5-6 year S/O makes and suddenly it is transformed to one who has just started.

Whatever is claimed here, the reality is inevitably not as rosy.

N

[jaded boiler]

I thought the "average" qf 747 pilot was pulling $350 000 per annum, with some getting up to $500 000.

[assasin8]

No, no, no Jaded, it's the "average" Qantas pilot pulling $ 350000 per yet, NOT 747 pilots only... I've already put my letter into payroll, asking for all my backpay!

Anyway, I'll be able to buy that boat now, as well as upgrading the car and taking that long overseas holiday... Lucky Qantas pointed out how much I was being underpaid!

Thanks Qantas... Oh and the $ 200000 per year pay rise will come in handy too!

[34R]

I love hearing all of the expert commentary from non QF people about how much I am actually earning!

I'm a 4th year S/O on the 330 and will fall WELL short of 160K.

Base pay estimates are not a accurate reflection of ones earning capacity as nobody earns just their base pay, and at the end of the day it's what ends up in your bank account that matters, not what the award says you are entitled to.
The problem with that argument is that there are so many variables in your earning capacity at Qantas. Fleet type, overtime (or lack of it), blank lines etc., all have a huge impact.
If i were to consult all of my group certificates and average them out, I would be able to quote you more useable figures.

Having done that, once again I can claim that 160K is a mere pipe dream!!

For our 4 engine brothers, well, that's another question....

[FullySickBro]

Take six months training (on training wage circa $35k p/a) plus 18 months on probationary pay then add 1 year full pay, then an average $65-75k p/a over 3 years would be pretty close.

After another 3 years at full pay your average will have gone up somewhat depending on fleet, overtime etc.

But who else in the world runs 6-10 year S/Os anyway!

Should we perhaps ignore this shovel fellow and move on??

[Jack Ranga]

To be fair though, I did put on an upper storey extension last year using my drycleaning allowance.

Love ya work!

[fishers.ghost]

Some Qantas Analysis

Get Key Statistics for: Data provided by Capital IQ, except where noted.
Valuation Measures
Market Cap (intraday)5:4.32B
Enterprise Value (Jun 9, 2011)3:6.31B
Trailing P/E (ttm, intraday):14.73
Forward P/E (fye Jun 30, 2012)1:7.31
PEG Ratio (5 yr expected)1:0.22
Price/Sales (ttm):0.31
Price/Book (mrq):0.73
Enterprise Value/Revenue (ttm)3:0.44
Enterprise Value/EBITDA (ttm)3:3.46
Financial Highlights Fiscal Year
Fiscal Year Ends:Jun 30
Most Recent Quarter (mrq)Dec 31, 2010
Profitability
Profit Margin (ttm):2.04%
Operating Margin (ttm):4.74%
Management Effectiveness
Return on Assets (ttm):2.15%
Return on Equity (ttm):5.01%
Income Statement
Revenue (ttm):14.45B
Revenue Per Share (ttm):6.32
Qtrly Revenue Growth (yoy):9.90%
Gross Profit (ttm):3.88B
EBITDA (ttm):1.82B
Net Income Avl to Common (ttm):295.00M
Diluted EPS (ttm):0.13Qtrly
Earnings Growth (yoy):315.50%
Balance Sheet
Total Cash (mrq):3.65b
Total Cash Per Share (mrq):1.61
Total Debt (mrq):5.53B
Total Debt/Equity (mrq):91.69
Current Ratio (mrq):0.90
Book Value Per Share (mrq):2.65
Cash Flow Statement
Operating Cash Flow (ttm):1.57B
Levered Free Cash Flow (ttm):-410.25M
View Financials
Income Statement - Balance Sheet - Cash Flow.

Trading Information Stock Price History
Beta:N/A52-Week Change3:-19.96%
S&P500 52-Week Change3:21.21%
52-Week High (Nov 4, 2010)3:2.9752-
Week Low (Jun 7, 2011)3:1.8950-
Day Moving Average3:2.10200-
Day Moving Average3:2.33
Share Statistics
Avg Vol (3 month)3:15,462,500
Avg Vol (10 day)3:12,814,600
Shares Outstanding5:2.27B
Float:2.26B%
Held by Insiders1:N/A%
Held by Institutions1:N/A
SharesShort 3:N/A
Short Ratio 3:N/A
Short % of Float 3:N/A
Shares Short (prior month)3:N/A
Dividends & Splits
Forward Annual Dividend Rate4:N/A
Forward Annual Dividend Yield4:N/A
Trailing Annual Dividend Yield3:N/A
Trailing Annual Dividend Yield3:N/A
5 Year Average Dividend Yield4:N/A
Payout Ratio4:N/A
Dividend Date3:N/A
Ex-Dividend Date4:N/A
Last Split Factor (new per old)2:N/A
Last Split Date3:N/A
.
Abbreviation Guide: K = Thousands; M = Millions; B = Billions
mrq = Most Recent Quarter (as of Dec 31, 2010)
ttm = Trailing Twelve Months (as of Dec 31, 2010)
yoy = Year Over Year (as of Dec 31, 2010)
lfy = Last Fiscal Year (as of Jun 30, 2010)
fye = Fiscal Year Ending
1 Data provided by Thomson Reuters
2 Data provided by EDGAR Online
3 Data derived from multiple sources
4 Data provided by Morningstar, Inc.
5 Shares outstanding is taken from the most recently filed quarterly or annual report and Market Cap is calculated using shares outstanding.
6 Data provided by Computershare
Currency in AUD.
Sunfish may wish to provide a translation

[somewhereat1l]

Don't forget your underwear allowance!!!

Knitwear/Undergarment Reimbursement
____________________________________________________________ ______

A new policy has been implemented that allows you to be reimbursed for the purchase of specific knitwear.

Read the OHS brief distributed to your base, or on the homepage of qfcrew.com

The brief includes information on why this has come about, what to purchase and where from, and how it should be worn.

Cabin Crew Communications

[Ka.Boom]

The Q in Good Shape

As a layman going over thoes figures Qantas looks in pretty good shape particularly with $3bil on the balance sheet.
This cock and bull notion of a failing company seems to be a deliberate deception

[The Green Goblin]

Actually Ka.boom Qantas, if it didn't borrow money would be cashflow negative.

It's got 3 billion in the bank, but how much does it owe?

It would be like having 5k cash in your personal bank with a 20k credit card debt.

The profit they reported this year was the leftover proceeds of the 1.5 billion they BORROWED! This is why they have not paid a dividend.

If they didn't borrow the 1.5 billion, they'd be digging into their war chest and reporting record losses. Their credit rating would take a hit and the board would be shown the door.

Something the worlds smartest men don't want you to know.

To me it smells like those books are burning!!

The headlines from Dow Jones don’t sound too bad, “Qantas Airways FY Net Profit -4.3% at A$112M” and “1H FY11 Pretax Profit May Be Materially Stronger On Year”.

But just as a newly polished car may look good on the outside, it’s only when you look under the bonnet that you can see what’s really going on.

In the case of Qantas, forget the net profit amount and the forecast for the first half of the 2011 financial year, that’s just the lovely polished finish. If you want to look at the engine you need to look at the company’s cashflow.

And that’s where you can see the engine has almost seized up…

You see, while Qantas reports a $112 million profit, if it wasn’t for proceeds from borrowings of $1.352 billion, Qantas would have had negative cashflow for the year to the tune of $1.265 billion.

In other words, just like the Aussie battler who needs to go to a payday lender in order to cover the cost of a gas or electricity bill, Qantas has had to go to its payday lender and draw down from a debt facility in order to pay its bills.

This is despite supposedly having $3.7 billion of cash in the bank.

But you can see why Qantas went down the road of increasing its borrowings rather than drawing down on cash. Minus the borrowings, Qantas’ cash holdings would have decreased by around a third. Doubtless the analysts wouldn’t have liked that as it would have played havoc with a bunch of cash based ratios.

Much better to go further into debt instead. Just like the rest of the population. Debt is all the rage after all. $1 trillion of household debt can’t be wrong!

The rotten state of the company’s cashflow is evident elsewhere too, such as the decision not to pay a dividend for the third half-year in a row.

Which is hardly surprising considering on a per-share basis Qantas earned just 4.9 cents per share, or earnings of 1.9% of the share price.

When a company’s earnings are that low, and it needs to borrow money in order to be cashflow positive it’s not hard to figure out that the company is in terrible shape.

So much so that it’s not only a stock I wouldn’t buy if you paid me, but it’s a stock that we’d suggest short selling – providing you use appropriate risk management tools to guard against a potential move to the upside.

The way I see it is that airline stocks along with retailers and the banks present the perfect opportunity to short sell the economy heading into a depression – and perhaps the new ASX housing index if that ever gets off the ground. Although given the ASXs history in new product development I wouldn’t hold my breath for that one.

Qantas is clearly suffering from competition and the inability to increase airfares as much as it would like. And if Virgin Blue [ASX: VBA] is successful in its pitch to snaffle a bigger share of the business market then that’ll spell even worse news for Australia’s supposed national carrier.

But look, as you can see from the chart below, Qantas is by no means at a high point:


Terminal velocity for Qantas?



Source: CMC Markets

The best time to short sell this stock may have passed, but quite frankly as an out and out punt – and you know we like a punt – there still looks to be room for a further move to the downside. Perhaps even challenging the low point from early last year.

Broking firm Morgan Stanley recently cut its target price on Qantas to just $3.05, that’s about 20% above the current share price. We’d say that’s overly generous. 20% to the downside is our bet.

Best case for a short seller would of course be for the airline to go bust. And if their cashflow doesn’t improve then that isn’t entirely out of the question.

Although we can’t honestly believe any Australian government would allow Qantas to go broke. Not without finding some way of pouring taxpayer dollars in to prop it up just as it did with the banks.

Even so, a medium term price target of somewhere between $2 and $1.50 makes this a worthwhile punt – but make sure you protect against losses if the stock rallies higher…

Cheers.
Kris Sayce
For Money Morning Australia

[TIMA9X]

Ans this just in
Plane Talking

In an interview on Vietnam.net Bridge the general director of Jetstar Pacific Airlines, Le Song Lai, says it will need $US 45 million in additional capital this year to stay in business, and is currently being forced to pay for its fuel requirements a day in advance to Vinapco, the state owned fuel monopoly, after racking up unpaid bills of $US 8 million.

[Lodown]

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