Qantas August 23rd announcements
Qantas cancels $US8.5bn 787-9 order after making $245m FY loss
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QANTAS Airways, reporting its first annual loss in nearly two decades, has cancelled orders for 35 of Boeing's more fuel-efficient 787-9 aircraft in a bid to save $US8.5 billion.
Australia's flag carrier is fighting to hold on to its coveted investment-grade credit rating as a robust performance from its domestic flights operation is offset by heavy losses at its international division. Based deep in the southern hemisphere, Qantas is an end-of-line carrier that's more exposed to soaring jet fuel costs.
The long-delayed arrival of Boeing's 787 class of aircraft has lumbered it with fuel-guzzling 747s longer than it expected.
Qantas said today that it had retained options and purchase rights for 50 of the 787-9 aircraft. There has been no changes for the group's plans for the 787-8 version, 15 of which will be delivered as planned from the second half of next year.
..."However, firm commitments for 35 787-9s will be cancelled. The restructure means a two-year delay in the group's first 787-9 delivery," the company said in a statement.
The changes will result in a reduction in capital expenditure that would equal $US8.5 billion at list prices, Qantas said.
The Sydney-based company booked a net loss for the year to June 30 of $245 million, compared to a $250 million profit a year earlier.
Underlying pre-tax profit of $95 million was at the top end of company guidance of $50 million to $100 million and beat the $65.9 million average of seven analysts' forecasts compiled by Dow Jones Newswires.
Qantas had indicated to investors in June that it would report its first statutory loss since privatisation in 1995, sending its shares to an historical low below $1.
The group's embattled international operations have been under siege as new carriers flying to Australia in recent years from the Middle East and China have been ramping up capacity.
It has also been under attack on the domestic front from a rebranded and restructured Virgin Australia under former Qantas executive John Borghetti.
Earlier this week Mr Joyce revealed that the board had accepted his decision to forgo any short-term and long-term incentive payments that would have been awarded for the 2012 financial year because of the airline’s poor share price and profit performance
Australia's flag carrier is fighting to hold on to its coveted investment-grade credit rating as a robust performance from its domestic flights operation is offset by heavy losses at its international division. Based deep in the southern hemisphere, Qantas is an end-of-line carrier that's more exposed to soaring jet fuel costs.
The long-delayed arrival of Boeing's 787 class of aircraft has lumbered it with fuel-guzzling 747s longer than it expected.
Qantas said today that it had retained options and purchase rights for 50 of the 787-9 aircraft. There has been no changes for the group's plans for the 787-8 version, 15 of which will be delivered as planned from the second half of next year.
..."However, firm commitments for 35 787-9s will be cancelled. The restructure means a two-year delay in the group's first 787-9 delivery," the company said in a statement.
The changes will result in a reduction in capital expenditure that would equal $US8.5 billion at list prices, Qantas said.
The Sydney-based company booked a net loss for the year to June 30 of $245 million, compared to a $250 million profit a year earlier.
Underlying pre-tax profit of $95 million was at the top end of company guidance of $50 million to $100 million and beat the $65.9 million average of seven analysts' forecasts compiled by Dow Jones Newswires.
Qantas had indicated to investors in June that it would report its first statutory loss since privatisation in 1995, sending its shares to an historical low below $1.
The group's embattled international operations have been under siege as new carriers flying to Australia in recent years from the Middle East and China have been ramping up capacity.
It has also been under attack on the domestic front from a rebranded and restructured Virgin Australia under former Qantas executive John Borghetti.
Earlier this week Mr Joyce revealed that the board had accepted his decision to forgo any short-term and long-term incentive payments that would have been awarded for the 2012 financial year because of the airline’s poor share price and profit performance
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Disgrace
Earlier this week Mr Joyce revealed that the board had accepted his decision to forgo any short-term and long-term incentive payments that would have been awarded for the 2012 financial year because of the airline’s poor share price and profit performance
Forgoing a bonus still does not justify a $2.5 mil salary, nor does it justify his or the Board remaining with the company, nor shgould it invoke investor confidence, the confidence of the public,the regulator or anybody else.
These chumps have murdered the airline. Well done.
Last edited by gobbledock; 23rd Aug 2012 at 00:54.
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I'm shocked by this report. Is it right.
Qantas drops firm Dreamliner 787 orders in huge shakeup | Plane Talking
This seems like the ultimate betrayal of all Australians. It says the changes mean a 'managed death' for Qantas long haul.
Qantas drops firm Dreamliner 787 orders in huge shakeup | Plane Talking
This seems like the ultimate betrayal of all Australians. It says the changes mean a 'managed death' for Qantas long haul.
Last edited by denabol; 23rd Aug 2012 at 00:59.
Qantas is a very profitable loyalty scheme business. Its airline subsidiary appears to be a real drain on its results
The whole results presentation is incredibly confusing. There is talk of underlying profit but some of the things excluded would appear to be a normal part of a business such as the need to rejig fleet etc. The cost of the shutdown continues to increase. I assume it has become a convenient dumping ground for costs that the directors don't want to talk about. It is very unclear as to where JQ makes it money. Sometimes JQ domestic is lumped in with QF domestic and other times JQ is talked about as a separate entity.
Yield appears to be a problem. Cents/RPK is basically flat. They blame currency though I think the domestic wars are starting to hurt. No wonder they won't give profit guidance!!!!!
The whole results presentation is incredibly confusing. There is talk of underlying profit but some of the things excluded would appear to be a normal part of a business such as the need to rejig fleet etc. The cost of the shutdown continues to increase. I assume it has become a convenient dumping ground for costs that the directors don't want to talk about. It is very unclear as to where JQ makes it money. Sometimes JQ domestic is lumped in with QF domestic and other times JQ is talked about as a separate entity.
Yield appears to be a problem. Cents/RPK is basically flat. They blame currency though I think the domestic wars are starting to hurt. No wonder they won't give profit guidance!!!!!
Last edited by 1A_Please; 23rd Aug 2012 at 01:07.
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Noticed they snuck in almost a 100% increase in costs re industrial action and downplayed Grounding element of that which was their decision. Assuming the numbers are correct, which I don't, in my books that makes AJ just as culpable as the unions in the cost of HIS decision. When is someone going to ask how could this go up in this way????
This has to be the most uninspiring, confusing and vague performance when the place needed inspiration.
This has to be the most uninspiring, confusing and vague performance when the place needed inspiration.
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245 Million Loss
The formal loss has been announced - worse than forecast....
787-9 Planes cancelled.
Refurbishing the 767 must be tax effective? These must be wholly owned and not leased????
Will be interesting to read the annual report.
787-9 Planes cancelled.
Refurbishing the 767 must be tax effective? These must be wholly owned and not leased????
Will be interesting to read the annual report.
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Why announce qf internationals loss on its own, but combine qf domestic and Jetstar ? Hiding something Alan?
Refurbing the 767's? As much as I like the aircraft, they are averaging 20 years of age, and a new paint job and new interior does not make it more efficient to fly. Anyone recall the 743 refurbishment to 744 status.
Alan Joyce not taking his bonus this year? What a con-job. That's why he was paid his bonus and more last year, effectively doubling his paypacket.
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About Qantas - Media Room - Media Releases - Qantas Group Restructures Fleet Plan
The quotes below are from the QANTAS News Release website.
Why is money being spent on refurbing 767 aircraft if they're going to start retiring them within 18 months?
How is International expected to turn around when fleet numbers aren't increased, no new aircraft introduced, no new destinations added or exisiting destinations culled?
The quotes below are from the QANTAS News Release website.
Deliveries of 15 B787-8s to Jetstar will continue as planned, with the first aircraft to arrive in the second half of 2013. This will enable the transfer of Airbus A330 aircraft from Jetstar to Qantas Domestic, and the eventual retirement of Qantas’ Boeing 767 fleet.
“We have 12 A380s in service across our long-haul network and the reconfiguration of nine B747s will be
complete by late 2012. Boeing 737-800s will continue to enter the Qantas Domestic fleet as part of the Group’s existing fleet plan, while Airbus A330s will transfer from Jetstar as B787s are delivered. And Jetstar’s domestic and pan-Asian fleet requirements will be met over the long-term by our existing A320 order book and the arrival of B787-8s.
complete by late 2012. Boeing 737-800s will continue to enter the Qantas Domestic fleet as part of the Group’s existing fleet plan, while Airbus A330s will transfer from Jetstar as B787s are delivered. And Jetstar’s domestic and pan-Asian fleet requirements will be met over the long-term by our existing A320 order book and the arrival of B787-8s.
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jet fuel price can't be the main reason
Still blaming high price of fuel... This link seems to refute that: Jet Fuel - Daily Price - Commodity Prices - Price Charts, Data, and News - IndexMundi
Couldn't find a comparison of fuel surcharge that passengers are being slugged with, as unfortunately this blog didn't get updated after 2008: Airline Ticket Fuel Surcharge Watch
It is interesting to note that oil price per barrel is currently $97 per barrel, a price at which airlines like WestJet removed fuel surcharges totally back in 08.
Couldn't find a comparison of fuel surcharge that passengers are being slugged with, as unfortunately this blog didn't get updated after 2008: Airline Ticket Fuel Surcharge Watch
It is interesting to note that oil price per barrel is currently $97 per barrel, a price at which airlines like WestJet removed fuel surcharges totally back in 08.
Last edited by DraggieDriver; 23rd Aug 2012 at 03:28. Reason: speling :)
Quote:
Deliveries of 15 B787-8s to Jetstar will continue as planned, with the first aircraft to arrive in the second half of 2013. This will enable the transfer of Airbus A330 aircraft from Jetstar to Qantas Domestic, and the eventual retirement of Qantas’ Boeing 767 fleet.
Why is money being spent on refurbing 767 aircraft if they're going to start retiring them within 18 months?
Deliveries of 15 B787-8s to Jetstar will continue as planned, with the first aircraft to arrive in the second half of 2013. This will enable the transfer of Airbus A330 aircraft from Jetstar to Qantas Domestic, and the eventual retirement of Qantas’ Boeing 767 fleet.
Why is money being spent on refurbing 767 aircraft if they're going to start retiring them within 18 months?
The A330s will stay at Jetstar.
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It is interesting to not that oil price per barrel is currently $97 per barrel, a price at which airlines like WestJet removed fuel surcharges totally back in 08.
QF also has the advantage of a very strong AUD that, as well as offsetting increases in fuel prices, also lowers costs for aircraft purchases, leases, foreign bases etc.
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Slow learners at Qantas
An interresting piece here from Tony Webber
An airline has a problem when its non-flying segments are more profitable than its flying segments because the flying segments are at the core of its business, and the non-flying segment performance depends heavily over a long term on the strong performance of the flying segments.
It is unlikely that the Qantas frequent flyer program can hold the ship upright for a long period if the flying segment of the business continues to perform poorly.
Read more: Slow learners at Qantas
It is unlikely that the Qantas frequent flyer program can hold the ship upright for a long period if the flying segment of the business continues to perform poorly.
Read more: Slow learners at Qantas