Australia, New Zealand & the Pacific Airline and RPT Rumours & News in Australia, enZed and the Pacific

QF and VA Fleet Drop in Value

Old 2nd Apr 2020, 12:52
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QF and VA Fleet Drop in Value

The news for QF and VA keeps getting worse. AA (American) has just announced 155 fleet units will be retired immediately. The number includes 76 x B737-800s, 9 x A330-300s, 34 x B757-200s, 16 x B767-300s and 20 x EMB 190s.

These units plus others no doubt to follow in the coming days/weeks/months will reduce the asset base value of QF and VA considerably.

Macquarie Bank are saying Qantas could be taken over by cashed-up Wesfarmers. Point to note: The Chairman of Qantas is Richard Goyder the former CEO of Wesfarmers.

A worldwide depression rather than a deep recession is now looking more likely.

Airlines that have not been mentioned as yet whose future is in doubt unless large sums of cash can be found include Thai International, Air India and Hawaiian Airlines.
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Old 2nd Apr 2020, 22:03
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A drop in aircraft valuations was always going to be a feature of this event. Even before this though QF was running an ageing fleet. The only relatively valuable airframes they had were the 787s, and they have since been financed (was it last week? The days are all the same now) to provide another few months of capital.
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Old 2nd Apr 2020, 22:13
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The next newest airframes for QF are the JQ 787s but they would probably have the same issues as VAs 777 being a non standard airframe (no crew rest).

Plus the -8 version of the 787 seems to now be the least popular.
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Old 3rd Apr 2020, 03:49
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Totally agree with the above. In reality Covid-19 is just starting. I laugh at the temporary rise in the share market. America is about to be wiped out with this thing, China is no doubt excited about the outcome. Having said that I hear in downtown Wuhan Covid2 has turned up so expect more people to be pushed into the back of vans never to be seen again.

Here in Australia we will wave goodbye to Virgin and a number of other smaller carriers. Alliance and Qf might be left as theyíve been keeping an eye on the dollar rather than borrowing and spending like some drunken sailor.

I reckon youíll see the major cities serviced by QF/JQ narrow bodies and all these other places will be back on greyhound. Never made any money out of them anyway. Hopefully we will see a number of the leaches that have been sucking our industry dry disappear very quickly to. Iíll toast to that!

It could be time the Australian public finds out how good they had it. Perhaps some fare increases from QF and/or the likes of Air Asia or Lion Air doing the domestic stuff occasionally burying one along the countryside.

America might one day send the bill to China (attached to an atom bomb).


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Old 3rd Apr 2020, 05:02
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Scotty adds a few B737's or A320's to the fleet and voila, VA is consigned to the history books...
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Old 3rd Apr 2020, 05:13
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Originally Posted by TBM-Legend View Post
Scotty adds a few B737's or A320's to the fleet and voila, VA is consigned to the history books...
Exactly. Owned outright, no smoke no mirrors or bullshit just A-B Alliance been doing it for years. Guess what? In their annual prune survey, despite being paid much less than the big dogs their pilots seem to be happier.

Something to be said for their basic approach.
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Old 7th Apr 2020, 04:26
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Doomsday Alert & Standard Disclaimer # 070420/1

1. Some, if not most opinions you read on social media will emanate from morons.
2. The opinions you read will NOT be based on Fact/Research/Historical Evidence.
3. Most opinions you read will emanate from non-qualified persons i.e. the person (moron) expressing that opinion will have no qualifications/experience in the field the opinion is being expressed in.

#1 Bearing this in mind, the only thing the said 'opinion' does is add to the fear and anxiety being experienced by the reader. The reader, usually being a person that is being affected by the events going on around them, i.e. loss of income, work stand down or worse, loss of employment.

#2 The best way to deal with these people (morons) is to take a breath, rationalise what is being said i.e. the person (moron) expressing these opinions is quite likely someone who may not be affected as yourself and enjoys spreading fear, panic & anxiety amongst the community.

#3 Call someone you know for a chat, take a breath, call your bank, apply for relief not just from government departments. Most creditors know that a delay in payment is better than none. Stay close to your family, emotionally and physically.

#4 Remind yourself of Point 3 (not #3, but Point 3)
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Old 7th Apr 2020, 04:38
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Has the 7 year old from Doomagee been glue sniffing?
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Old 7th Apr 2020, 05:06
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Originally Posted by Air Ace View Post
Has the 7 year old from Doomagee been glue sniffing?
Pretty much; on one hand he's nuking China for a pandemic, whilst on the other decrying free-market economics.
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Old 7th Apr 2020, 17:08
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Originally Posted by B772 View Post
The news for QF and VA keeps getting worse. AA (American) has just announced 155 fleet units will be retired immediately. The number includes 76 x B737-800s, 9 x A330-300s, 34 x B757-200s, 16 x B767-300s and 20 x EMB 190s.

These units plus others no doubt to follow in the coming days/weeks/months will reduce the asset base value of QF and VA considerably.

Macquarie Bank are saying Qantas could be taken over by cashed-up Wesfarmers. Point to note: The Chairman of Qantas is Richard Goyder the former CEO of Wesfarmers.

A worldwide depression rather than a deep recession is now looking more likely.

Airlines that have not been mentioned as yet whose future is in doubt unless large sums of cash can be found include Thai International, Air India and Hawaiian Airlines.
The emphasis being on 'could'. I read the article, it was a typical media beat up... it went on and on about how Wesfarmers could take over Qantas, then went on to say that Macquarie had listed a dozen or so companies but had recommended that WF make a move on two companies (can't remember their names) because their business fit neatly with WF chemical businesses. So, a BIG banner with the word Qantas in bold and a big photo of a Qantas red tail or two then a piddling amount of info amounting to no recommendation or intention at all.
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Old 7th Apr 2020, 20:39
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How are Cobham doing with the Qlink 717 ops? I think a lot of the West stuff is charter for the mines but if their entire East coast fleet is grounded - as I believe I heard it is - whats the long term outlook there? does QF have them on contract and paying them not to fly? or some other type arrangement?

Likewise with Alliance, I assume VA is still paying them to operate services?
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Old 8th Apr 2020, 00:46
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Alliance said in an ASX release in March that VA has requested to reduce the minimum hours under their wetlease agreement, which could see their activity down by 2000 hours per year. No detail on how many hours that would leave them with, but it will impact their second-half earnings. Some of that will be made up by increased FIFO work (social distancing is forcing mines to operate more flights) but will be interesting to see how it pans out. Cobham I imagine are in the same boat, but are a lot more exposed to QF flying than FIFO. At the very least, the sale is off the table for them.
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Old 8th Apr 2020, 01:31
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If there ever was a sale on the table it would be more appealing in the next few months.

The 8 million dollar leave balance will be gone, they will have picked up a few cheap E-Jets to continue the charter fleet replacement and the QF flying will be picking up again. I would think the 717 is a nice fit for those slimmer routes at least until they have enough pax for a 737.
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Old 8th Apr 2020, 02:02
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Originally Posted by ebt View Post
Alliance said in an ASX release in March that VA has requested to reduce the minimum hours under their wetlease agreement, which could see their activity down by 2000 hours per year. No detail on how many hours that would leave them with, but it will impact their second-half earnings. Some of that will be made up by increased FIFO work (social distancing is forcing mines to operate more flights) but will be interesting to see how it pans out. Cobham I imagine are in the same boat, but are a lot more exposed to QF flying than FIFO. At the very least, the sale is off the table for them.
Under the wet lease arrangement, excluding FIFO, they fly to a lot of regional airports. Some of the airports where they have been conducting say 30 to 50 flights per week the numbers have been halved. And some of those flights only have 10 to 15 pax onboard. Alliance will continue to be affected also. Nobody can escape the financial impact of the COVID crisis.

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Old 8th Apr 2020, 02:03
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It could be time the Australian public finds out how good they had it
Ditto pilots of the big stuff/airlines, unfortunately. A lot may never see a cockpit again, those boguns are your bread and butter.
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Old 8th Apr 2020, 04:17
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Airlines that have not been mentioned as yet whose future is in doubt unless large sums of cash can be found include Thai International, Air India and Hawaiian Airlines.
Add to that Malaysia Airlines and South African Airways.

Alitalia has just been nationalised by the Italian government and it will be interesting to see how this is managed regarding employee conditions, routes, fares etc.
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Old 8th Apr 2020, 04:37
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VA has not announced any success with raising cash from the sale of assets. They may have left it too late in the case of the B777-300ERs. CX sold 8 last week. Now we hear the DL has been offered B777s for $10M.
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Old 8th Apr 2020, 05:15
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Originally Posted by megan View Post
Ditto pilots of the big stuff/airlines, unfortunately. A lot may never see a cockpit again, those boguns are your bread and butter.
This is the saddest part. As someone put it on another thread, A number of us wonít realise it yet but we have probably operated our last airline flight of our careers.

Truly hope this isnít the case but it looks more and more probable by the day.
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Old 9th Apr 2020, 01:13
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Originally Posted by B772 View Post
VA has not announced any success with raising cash from the sale of assets. They may have left it too late in the case of the B777-300ERs. CX sold 8 last week. Now we hear the DL has been offered B777s for $10M.
Re DL, that is old news from a couple of years ago, and that was for aircraft due D-checks with little engine hours, so not directly comparable. With widebody financing, the banks aren't primarily focused on the aircraft, it is all about the credit worthiness of the airline, so a QF or CX have it much easier than a VA. The last thing a bank wants to do is try and sell a repo'd widebody, especially in these conditions.
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Old 9th Apr 2020, 23:38
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Originally Posted by ECAMACTIONSCOMPLETE View Post
The next newest airframes for QF are the JQ 787s but they would probably have the same issues as VAs 777 being a non standard airframe (no crew rest).

Plus the -8 version of the 787 seems to now be the least popular.
My brother sometimes chats with me from over the Pacific somewhere. Whilst in the 777 crew rest...
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