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REX to transition to ATRs, start domestic jet ops

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REX to transition to ATRs, start domestic jet ops

Old 21st May 2021, 00:02
  #1161 (permalink)  
 
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Originally Posted by Buster Hyman
You saw AN staff celebrating VB's demise? I think you've misunderstood my post.
I never said that I saw AN staff celebrating VBís demise.

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Old 21st May 2021, 00:04
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Bleeding cash…QF? I wouldn’t use those words which is actually incorrect based on yesterday’s announcement. Free cash, vs underlying vs statutory. I’d be surprised if the A380s haven’t been significantly written down, along with all those buildings being replaced. In terms of free cash QF is fine. I’m not having a go at Rex, or those that work there. Irrespective, I’ve had a fair crack at QF over the years too. I mean, haven’t we seen this game so many times over the years?
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Old 21st May 2021, 00:39
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Bleeding cash…QF? I wouldn’t use those words which is actually incorrect based on yesterday’s announcement. Free cash, vs underlying vs statutory. I’d be surprised if the A380s haven’t been significantly written down, along with all those buildings being replaced. In terms of free cash QF is fine. I’m not having a go at Rex, or those that work there. Irrespective, I’ve had a fair crack at QF over the years too. I mean, haven’t we seen this game so many times over the years?
Not quite sure what you don't understand about a $2 billion loss for the year vs Rs break even. Cash position is a red herring, a company usually has to maintain a minimum cash liquidity to assure certain loan requirements. And the old, 'underlying profitability', yes that old chestnut, how many times did Virgin pull that out, before suddenly "oops we're insolvent" came along. Don't get fooled by smoke and mirrors, a loss is a loss, a profit is a profit.

BTW, part of the $4 billion in cash liquidity is $1.6 billion in unused loan facilities, that's right more debt. How much of the remaining $2.4 billion in cash liquidity is actual debt?

Last edited by 43Inches; 21st May 2021 at 01:03.
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Old 21st May 2021, 01:48
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It will be interesting to see who is exposed when the tide of government handouts goes out. When the borders reopen and operations are no longer hamstrung. QF have certainly received their share, but not the 15-20% of total revenue like some others. I would be cautious comparing financial results at this point.

You are correct though, a loss is a loss. Time will tell who is sprouting smoke and mirrors.


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Old 21st May 2021, 03:28
  #1165 (permalink)  
 
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Seems to be a lot of terms being thrown around willy-nilly. Liquidity includes cash and facilities you can quickly convert to cash such as approved lines of credit. If you've borrowed the cash it will be reflected as a liability on the other side of the balance sheet such that the net position at the bottomline is essentially just the interest payable. Thus, cash and net debt are the numbers of interest.

In keeping with that, the instructive pieces of information coming out of yesterday's QF announcement were (a) that their cash position as of 30 April was $2.4 billion and (b) that net debt had peaked in February and was expected to be lower than $6.05 billion by 30 June.

That all augurs well for them. Compared to their 30 December numbers per their half-year report, it shows that they have significantly slowed their cash burn and almost certainly have an improving outlook so long as further lockdowns/travel restrictions are avoided.

If you want to cut through the bumf and hoopla look at how the market reacted - it really didn't blink. QAN is up over 1.5 percent since yesterday's announcement.

REX on the other hand ... they announce that they'll break even and their share price drops. Probably goes to credibility, your Honour.

Last edited by MickG0105; 21st May 2021 at 03:30. Reason: Tidy up for clarity
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Old 21st May 2021, 04:03
  #1166 (permalink)  
 
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Two different companies as far as share market goes, one is a mainstream investor staple, one is a dividend cow with low available shares. In any case apart from the two spikes where Rex first said it might go bust (big drop) and then said it was expanding (big jump), the last ten years both QF and R have tracked along along with similar ups and downs. The worrying thing for QF is the debt, the same indicators that we looked at when virgin was heading downhill a few years back and now on the radar at QF. What makes the situation different, is that the two opposition carriers have equity partners, that will have long term agendas. Both will see that if they can beat QF down the Australian domestic and International market will be the prize, and a huge one at that. QF leadership is AJ who knows the ship wont sink during his term, which will be up soon, and I reckon he does not care much what happens after.

QF have certainly received their share, but not the 15-20% of total revenue like some others. I would be cautious comparing financial results at this point.
This is business, where you get cash from, the gov or the public, is irrelevant. Your management is there to ensure the cash keeps the doors open, the argument that getting the handouts/contracts is somehow foul play or illegal is just emotional BS. Lots of companies survive entirely on gov contracts, they are usually easy money if you can win the tenders.

If you've borrowed the cash it will be reflected as a liability on the other side of the balance sheet such that the net position at the bottomline is essentially just the interest payable. Thus, cash and net debt are the numbers of interest.
$1.6 bil of the cash they are claiming to have on hand is not in hand yet, therefore not borrowed, therefore not included in the liabilities/debt. The cash statement is just a nice line to say to investors "don't worry, we have money"

Last edited by 43Inches; 21st May 2021 at 04:15.
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Old 21st May 2021, 07:08
  #1167 (permalink)  
 
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Originally Posted by 43Inches
$1.6 bil of the cash they are claiming to have on hand is not in hand yet, therefore not borrowed, therefore not included in the liabilities/debt. The cash statement is just a nice line to say to investors "don't worry, we have money"
Sound like you’re accusing them of misleading the market. Somehow I don’t think what you’re alluding to in your statement would be legal.
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Old 21st May 2021, 07:22
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All this talk of "a resurgent virgin" reminds me so much of all the yap going on about borghetti when he first started. He was the Messiah if you believed pprune. I remember everyone just jumping on the Borghetti bus. I even remember posting and saying something along the lines of wait until he gets results before continuing on the Messiah rubbish. Turned out that (for once) I was right. Look how things turned out under his rule.
I'm seeing the same yap now. Everyone is bandwagoning on the resurgent virgin phrase. The new virgin is still a tiny baby. Spare me the "resurgent Virgin" rhetoric until some financials are published which show an actual resurgence. Until that happens it is still a work in progress.

I wish both Virgin staff and Rex staff all the best for the future. And I stand by my previous comments that for everyone wanting to see Sharp fail and spewing their vitriol here, remember that the people operating those aircraft and everyone involved in getting them airborne are decent people like you and me. Sharp may be a toolbox, but the people on the frontline are good folks.
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Old 21st May 2021, 07:27
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Sound like you’re accusing them of misleading the market. Somehow I don’t think what you’re alluding to in your statement would be legal.
Not at all, just highlighting that quoting liquidity figures is not always what it seems. It's completely legal, the company statement is that they have X cash available to them, which is true. What is also true is that if they then converted that option into actual cash they would be increasing debt, by that relative amount.

In simple terms, a business signs an agreement to borrow $3 billion to cover a downturn, they use $1.4 billion and have $1.6 billion still available to take if required. The $1.6b can be considered available cash, and since it has not been taken yet, its not considered a debt.
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Old 21st May 2021, 07:34
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Originally Posted by 43Inches
Two different companies as far as share market goes, one is a mainstream investor staple, one is a dividend cow with low available shares. In any case apart from the two spikes where Rex first said it might go bust (big drop) and then said it was expanding (big jump), the last ten years both QF and R have tracked along along with similar ups and downs. The worrying thing for QF is the debt, the same indicators that we looked at when virgin was heading downhill a few years back and now on the radar at QF. What makes the situation different, is that the two opposition carriers have equity partners, that will have long term agendas. Both will see that if they can beat QF down the Australian domestic and International market will be the prize, and a huge one at that. QF leadership is AJ who knows the ship wont sink during his term, which will be up soon, and I reckon he does not care much what happens after.



This is business, where you get cash from, the gov or the public, is irrelevant. Your management is there to ensure the cash keeps the doors open, the argument that getting the handouts/contracts is somehow foul play or illegal is just emotional BS. Lots of companies survive entirely on gov contracts, they are usually easy money if you can win the tenders.



$1.6 bil of the cash they are claiming to have on hand is not in hand yet, therefore not borrowed, therefore not included in the liabilities/debt. The cash statement is just a nice line to say to investors "don't worry, we have money"
They can say 'dont worry,we have cash' but $6bn debt is exactly that $6bn debt.
Dont know if i would be comfortable investing in an airline with $6bn debt no matter how much positive spin they put on it.
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Old 21st May 2021, 07:50
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Originally Posted by 43Inches
$1.6 bil of the cash they are claiming to have on hand is not in hand yet, therefore not borrowed, therefore not included in the liabilities/debt. The cash statement is just a nice line to say to investors "don't worry, we have money"
This is getting a tad tiresome. Read QF's ASX statement from yesterday. They didn't claim to have the $1.6 billion in undrawn facilities as cash on hand - that seems to be your mistaken interpretation.

QF state quite clearly that,
Liquidity levels remain strong with total funds of $4.0 billion, including cash of $2.4 billion and $1.6 billion of undrawn debt facilities as at 30 April 2021.
The keen observers will note that the terms "cash" and "undrawn debt facilities" are used in a mutually exclusive fashion.

Originally Posted by 43Inches
In simple terms, a business signs an agreement to borrow $3 billion to cover a downturn, they use $1.4 billion and have $1.6 billion still available to take if required. The $1.6b can be considered available cash, and since it has not been taken yet, its not considered a debt.
In simple terms, no, the $1.6 billion in undrawn facilities cannot be considered as available cash, at all. That would be "magic pudding" accounting . The $1.6 billion in undrawn facilities is considered liquidity. Liquidity is different to, but includes, cash and cash equivalents.

Last edited by MickG0105; 21st May 2021 at 08:07. Reason: Added further clarification
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Old 21st May 2021, 08:02
  #1172 (permalink)  
 
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This is getting a tad tiresome. Read QF's ASX statement from yesterday. They didn't claim to have the $1.6 billion in undrawn facilities as cash on hand - that seems to be your mistaken interpretation.

QF state quite clearly that,
You are technicallly correct, they are stating $4 billion of liquidity. Which as I said includes $1.6 billion of undrawn debt, the result is the same as i have explained, it changes nothing that has been said since. If they wish to convert that option into actual cash, it will increase net debt.

If you are getting tired you should take a nap, rather than harping on about semantics.
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Old 21st May 2021, 08:10
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Originally Posted by 43Inches
You are technicallly correct, ...
And we'll leave it at that.
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Old 21st May 2021, 08:22
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Soooooo a thread about Rex has turned in to a QF finances thread. Question is, can QF out survive Rex or will Rex beat VA then Rex buy QF or will VA buy Rex then buy QF after Alliance buys a charter company then buys QF
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Old 21st May 2021, 08:30
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FlyPelican, the dark horse, comes from behind and buys them all out, only to pipped at the post by brad air.
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Old 21st May 2021, 09:51
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Originally Posted by SHVC
Soooooo a thread about Rex has turned in to a QF finances thread. Question is, can QF out survive Rex or will Rex beat VA then Rex buy QF or will VA buy Rex then buy QF after Alliance buys a charter company then buys QF
I think Rex's strategy will be to make as much noise as possible to hinder VAs IPO which in turn will make Bain buy them out to get the IPO across the line. Thats if Rex doesn't fail before that.
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Old 21st May 2021, 11:57
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Originally Posted by Paragraph377
I never said that I saw AN staff celebrating VBís demise.
You just need to reply to posts in the context that they were set in, rather than making assumptions...anyway, back to the thrilling Rex thread.
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Old 24th May 2021, 05:37
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I have heard that REXs loads are on the improve
Particularly on Canberra-Sydney, Melbourne-Adelaide, even Sydney-Melbourne are mostly in the triple digits now
Apparently they are starting to get a bit of a following
Is anyone still counting heads?
Also curious to see how Coffs and Port Maq are performing...
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Old 24th May 2021, 07:08
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From what I have observed out of Sydney I would say otherwise. Same if not worse in numbers.
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Old 24th May 2021, 07:58
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Originally Posted by Deano969
I have heard that REXs loads are on the improve
Particularly on Canberra-Sydney, Melbourne-Adelaide, even Sydney-Melbourne are mostly in the triple digits now
Be a bit hard to hit triple digit pax loads CBR-SYD in a Saab.

They would not routinely be hitting 100+ (60+% LF) SYD-MEL - that route has been a disaster for them. Tomorrow they look like they'll be flat out averaging sub-50% LF SYD-MEL and they don't appear to have sold a single J class fare for the day.

MEL-ADL seems to be Rex's best jet route by LF - they might be hitting 100+ half the time.
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