Qantas:After The Dust Has Settled
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QANTAS PROFIT UPDATE
SYDNEY, 28 November 2011: The Qantas Group expects to report underlying profit before tax (Underlying PBT) for the six months ending 31 December 2011 in the range of $140 million to $190 million, despite period on period increases in fuel costs and the impact of industrial action which together total over $650 million.
Qantas Chief Executive Officer Alan Joyce said the forecast result underlined the strength of the Qantas Group’s strategy and portfolio of businesses, and would be achieved despite a number of challenges.
The impact of extensive industrial action taken by the Australian Licenced Aircraft Engineers Association (ALAEA), the Transport Workers Union (TWU) and the Australian International Pilots Association (AIPA), and the subsequent grounding of the Qantas domestic and international fleet, is estimated to have had an unfavourable financial impact of $194 million in the first half of FY12.
This financial impact includes:
‐ industrial action prior to the grounding: $68 million
‐ impact of the grounding (net of cost savings) including lost revenues, refunds and accommodation over three days: $70 million
‐ impact on forward bookings of the union campaigns: $27 million
‐ customer recovery initiatives in response to industrial action and grounding: $29 million
Mr Joyce said that, it would have been unsustainable for the business to continue to manage ongoing and escalating union action – which would have resulted in significant forward revenue loss, increased costs for the business and destroyed customer loyalty.
“Had the union industrial campaigns continued the impact on the business would have grown to $85 million a month,” Mr Joyce said.
“However, since the termination of industrial action by Fair Work Australia we have seen customers return to Qantas.
“We can now provide absolute certainty for our passengers and this has led to a strong and quick recovery in forward bookings. Domestic bookings, including from corporate accounts, have recovered particularly well and are now back to normal levels.
“International bookings for the period up to January have also recovered, but at a slower rate because of the longer lead times associated with international travel. Forward bookings for international travel in the second half of the financial year are now in line with normal trends.
“After a very difficult period we are now back to normal operations thanks to the continued support and loyalty of our customers and employees.”
In addition to the impact of industrial action, the Group’s first half performance reflects a challenging operating environment, with uncertainty in global economic conditions, elevated fuel prices and volatile foreign exchange rates.
The outlook for the second half of FY12 remains volatile and given the uncertainty in global economic condition, fuel prices and foreign exchange rates, it is not possible to provide further guidance at this time.
Overall, the Qantas Group’s balance sheet remains strong, with significant flexibility to manage fleet capital in the short-to-medium term and a robust cash balance currently in excess of $3.3 billion.
SYDNEY, 28 November 2011: The Qantas Group expects to report underlying profit before tax (Underlying PBT) for the six months ending 31 December 2011 in the range of $140 million to $190 million, despite period on period increases in fuel costs and the impact of industrial action which together total over $650 million.
Qantas Chief Executive Officer Alan Joyce said the forecast result underlined the strength of the Qantas Group’s strategy and portfolio of businesses, and would be achieved despite a number of challenges.
The impact of extensive industrial action taken by the Australian Licenced Aircraft Engineers Association (ALAEA), the Transport Workers Union (TWU) and the Australian International Pilots Association (AIPA), and the subsequent grounding of the Qantas domestic and international fleet, is estimated to have had an unfavourable financial impact of $194 million in the first half of FY12.
This financial impact includes:
‐ industrial action prior to the grounding: $68 million
‐ impact of the grounding (net of cost savings) including lost revenues, refunds and accommodation over three days: $70 million
‐ impact on forward bookings of the union campaigns: $27 million
‐ customer recovery initiatives in response to industrial action and grounding: $29 million
Mr Joyce said that, it would have been unsustainable for the business to continue to manage ongoing and escalating union action – which would have resulted in significant forward revenue loss, increased costs for the business and destroyed customer loyalty.
“Had the union industrial campaigns continued the impact on the business would have grown to $85 million a month,” Mr Joyce said.
“However, since the termination of industrial action by Fair Work Australia we have seen customers return to Qantas.
“We can now provide absolute certainty for our passengers and this has led to a strong and quick recovery in forward bookings. Domestic bookings, including from corporate accounts, have recovered particularly well and are now back to normal levels.
“International bookings for the period up to January have also recovered, but at a slower rate because of the longer lead times associated with international travel. Forward bookings for international travel in the second half of the financial year are now in line with normal trends.
“After a very difficult period we are now back to normal operations thanks to the continued support and loyalty of our customers and employees.”
In addition to the impact of industrial action, the Group’s first half performance reflects a challenging operating environment, with uncertainty in global economic conditions, elevated fuel prices and volatile foreign exchange rates.
The outlook for the second half of FY12 remains volatile and given the uncertainty in global economic condition, fuel prices and foreign exchange rates, it is not possible to provide further guidance at this time.
Overall, the Qantas Group’s balance sheet remains strong, with significant flexibility to manage fleet capital in the short-to-medium term and a robust cash balance currently in excess of $3.3 billion.
ASX: Preliminary Monthly Traffic and Capacity Statistics - Oct
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Hang on a minute. According to the Australian business section we are now back on the market. Not a bad move, if you look at each different section, the company is worth a lot more broken up and sold down the track then what it is worth now. Singleton and Dixon, are a couple of people deciding if it is worth the risk, and there are more. Fighting for your jobs might be eventually futile, there could well be no airline left, in a few more years if these people proceed. They, if they buy it, are not buying it because of sentimental reasons, they are purely looking at a quick buck.
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Surprise surprise...gloom and doom profit forecast due to industrial action and collapse of deal that never really existed, diversions to investments in pubs and now these rumours.
I wish they would all just go away and I mean ALL.
I also hope again that ASIC starts looking at all of it.
I wish they would all just go away and I mean ALL.
I also hope again that ASIC starts looking at all of it.
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As posted by MR Wobbles 6 Aug 2011
Dixon cashed up and looking to invest
GAAM, Fly Lease
Now to some fancy flying by a stellar cast of local investors who have been the force behind the country’s second-biggest aircraft leasing business Global Aviation Asset Management and have now managed to sell it to US-listed FLY Leasing for $US1.4 billion. FLY is the former Babcock and Brown aviation leasing business and boasts former B&B execs Trevor Lowensohn and Phil Brown as its advisors. The merry cast at GAAM cashing in on the deal include former Qantas boss Geoff Dixon, his former CFO and former Leighton CFO Peter Gregg, former Allco boss David Coe, John Singleton and private equity investor Mark Carnegie. This team is now looking at multiple investment opportunities and Dixon has told The Australian Financial Review that they are looking to put together a bid to take over the management of the $6 billion portfolio of RBS Aviation Capital, the fourth-largest aviation leasing company in the world.
what timing Qantas looks cheap
AMOS2 WHERE ARE YOU
Dixon cashed up and looking to invest
GAAM, Fly Lease
Now to some fancy flying by a stellar cast of local investors who have been the force behind the country’s second-biggest aircraft leasing business Global Aviation Asset Management and have now managed to sell it to US-listed FLY Leasing for $US1.4 billion. FLY is the former Babcock and Brown aviation leasing business and boasts former B&B execs Trevor Lowensohn and Phil Brown as its advisors. The merry cast at GAAM cashing in on the deal include former Qantas boss Geoff Dixon, his former CFO and former Leighton CFO Peter Gregg, former Allco boss David Coe, John Singleton and private equity investor Mark Carnegie. This team is now looking at multiple investment opportunities and Dixon has told The Australian Financial Review that they are looking to put together a bid to take over the management of the $6 billion portfolio of RBS Aviation Capital, the fourth-largest aviation leasing company in the world.
what timing Qantas looks cheap
AMOS2 WHERE ARE YOU
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What do ASIC do ?
What is insider trading?
Do we need more senate inquiries ?
Will the A380 orders reappear, with no penalty?
Is the APA bid Phoenix rising from ashes ? (just with different players)
Stay tuned
What is insider trading?
Do we need more senate inquiries ?
Will the A380 orders reappear, with no penalty?
Is the APA bid Phoenix rising from ashes ? (just with different players)
Stay tuned
Last edited by MR WOBBLES; 28th Nov 2011 at 02:04.
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And you would not buy a washing machine from any of them. Qantas prices drop, profit is down, are we now really seeing what it is really all about. A selloff? Dixon finally gets what he always wanted? Joyce gets the kickbacks, the company sold off, then broken up and sold in sections? Why do I smell a rat? Could you blokes have just walked into the biggest sting in this country? Walked in and given them just what they always wanted? Christ, I hope I am wrong and its just my imagination running away from me, but the people who are in this...............................oh dear.
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From another thread but relevant - Managers Perspective writes
33 Disengage responds
It is what it is......
But loosely translated, I think it means YOU LOSE!
MP
But loosely translated, I think it means YOU LOSE!
MP
Qantas management today have costed their ideological decision to fight instead of negotiate with their staff at $250m. That cost doesn't include damage to brand, cost of disengaged staff, or future settlement costs.
Having trashed the airline (a topic the above is only a fraction of) all MP can come up with is "YOU LOSE". For QF management this has been a bit of a game to which they had access to the bank account to spend as they liked. They did but QANTAS WAS THE LOSER!!!!!!!!!!!!!
Having trashed the airline (a topic the above is only a fraction of) all MP can come up with is "YOU LOSE". For QF management this has been a bit of a game to which they had access to the bank account to spend as they liked. They did but QANTAS WAS THE LOSER!!!!!!!!!!!!!
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Qantas chief executive Alan Joyce has rejected reports that he is dumping plans to establish a full-service airline in Asia in favour of a deeper alliance with Malaysian Airlines.
As reported by the ABC this afternoon at about 3.30pm. There has been no ASX statement on the issue.
Given wide coverage of the issue in most Sydney press atleast, it seems the market is less than fully informed one way or the other.
As reported by the ABC this afternoon at about 3.30pm. There has been no ASX statement on the issue.
Given wide coverage of the issue in most Sydney press atleast, it seems the market is less than fully informed one way or the other.
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it seems the market is less than fully informed one way or the other.
Qantas boss rejects speculation Asia deal is dead - ABC News (Australian Broadcasting Corporation)
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Funny how that now all negotiations with "the 3 unions" have been halted by FWA after the 21 days grace AND THEN qantas announce the Asia plans are off.
As suspected it may have just been a threat to hang over our heads during EBA time.
As suspected it may have just been a threat to hang over our heads during EBA time.
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Yep can see the headlines tomorrow. Alienate the whole workforce, alienate the travelling public, severely psss off the government, tell the whole of OZ they are only needed for funding offshore expansion through higher fares, tell a few porkies along the way about what the true intentions are, announce plans that seem to have fallen in a heap, be left with NO STRATEGY re the future other than crush the workers at any cost...wonder if those institutional shareholders are feeling the love now.
That is before any changes to QSA to reign in this rogue employer (as per Senator).
When will someone ro anyone be held accountable...soon I hope.
That is before any changes to QSA to reign in this rogue employer (as per Senator).
When will someone ro anyone be held accountable...soon I hope.
Contrary to speculation that Qantas was set to mothball plans for a new Asian airline, worth hundreds of millions of dollars, Joyce is believed to have been working on a deal to not only speed up these plans but make them bigger and less costly than the original proposal announced in August.
Less costly 
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Well, according to The Australian
Mr Joyce said having a premium airline in Asia remained part of the strategy. But the new joing venture could involve a Qantas product on Malaysian planes, rather than its own Airbus A320neos.
Nunc est bibendum
Mr Joyce said having a premium airline in Asia remained part of the strategy. But the new joing venture could involve a Qantas product on Malaysian planes, rather than its own Airbus A320neos.
This airline deserves better management.
