REX to transition to ATRs, start domestic jet ops
The hard liquor mob own half their machines and have power by the hour on the other half......can QF say the same. They may own half their machines but the other half have HUGE lease payments........
[QUOTE=can QF say the same. They may own half their machines but the other half have HUGE lease payments........[/QUOTE]
The lease repayments on the four 737s might be huge, I don’t know. The other 71 are owned and have been for a long time.
The lease repayments on the four 737s might be huge, I don’t know. The other 71 are owned and have been for a long time.
The other crippling disadvantage that Qantas has is too many customers stinking the place up. So then they have to employ more people to serve them. Its a mug's game that Rex has cunningly avoided.
There seems to be a perception in some quarters that power-by-the-hour leases are some sort of financial panacea for low utilisation. They're not. PBH is typically a 'tuned' arrangement pitched around forecast utilisation with a cap-and-collar for anticipated variations. They blend the relatively high fixed lease component that covers the return-on-capital to the leasing company with a much smaller utilisation-based pro-rated component for (usually engine) maintenance.
Not using the aircraft doesn't obviate the requirement to make the bulk of the lease payments. However, not utilising the aircraft does have a major impact on the airlines' ability to fund the lease costs from cash flow.
There's a reason why there are a couple of orders of magnitude fewer leasing companies than airlines and at least an order of magnitude fewer leasing companies going bust when compared to airlines. They are much better at making money under any and all circumstances.
Not using the aircraft doesn't obviate the requirement to make the bulk of the lease payments. However, not utilising the aircraft does have a major impact on the airlines' ability to fund the lease costs from cash flow.
There's a reason why there are a couple of orders of magnitude fewer leasing companies than airlines and at least an order of magnitude fewer leasing companies going bust when compared to airlines. They are much better at making money under any and all circumstances.
Last edited by MickG0105; 1st Jul 2021 at 23:38. Reason: Typo
Source 2020 Annual report (which was when COVID only affected 1/4 of the year)
As for the neos, from memory they were out in the market looking at some SLB options a while back, and as they are an in-demand asset the lessors will still put some attractive deals together. My guess is that in most cases Qantas has paid the pre-delivery payments in cash and could therefore get some value from doing SLBs if they needed to, but there are also benefits to having new jets on the balance sheet. If there are concerns about new jets sucking too much cash out they will defer their later deliveries and just rely on SLBs or finance leases to take those that they are contractually obliged to take.
SHVC
Bain owns other aviation businesses with an Australian component and which also lose money in Australia and globally. Far from wanting out, Bain is both "tipping in money" and undertaking acquisitions to gain more market share.
To be honest, REX may be the last Airline standing who knows! one thing is for sure QF will be loosing money like they haven't before, we will know in August, how long can QF pay for a idle international business. As for VA far out I wouldn't leave REX to go back I don't think they will survive Bain don't seem like the company to keep tipping in money in a business thats based in a country that is backwards and third world.
Most of the 787s are owned although a couple were sold and leased back with BOC Aviation at the start of the pandemic to bring in some cash. The A380s are owned too and no bank/lessor in their right mind would touch them now, but as they are subject to large writefdowns, their ownership costs will reduce dramatically in coming years. A330s are all owned, the few that were leased from CIT (now Avolon) were returned some years ago.
As for the neos, from memory they were out in the market looking at some SLB options a while back, and as they are an in-demand asset the lessors will still put some attractive deals together. My guess is that in most cases Qantas has paid the pre-delivery payments in cash and could therefore get some value from doing SLBs if they needed to, but there are also benefits to having new jets on the balance sheet. If there are concerns about new jets sucking too much cash out they will defer their later deliveries and just rely on SLBs or finance leases to take those that they are contractually obliged to take.
As for the neos, from memory they were out in the market looking at some SLB options a while back, and as they are an in-demand asset the lessors will still put some attractive deals together. My guess is that in most cases Qantas has paid the pre-delivery payments in cash and could therefore get some value from doing SLBs if they needed to, but there are also benefits to having new jets on the balance sheet. If there are concerns about new jets sucking too much cash out they will defer their later deliveries and just rely on SLBs or finance leases to take those that they are contractually obliged to take.
https://www.flightglobal.com/strateg...137514.article
War of attrition methinks?
Yeah "wanting" and "getting" two different things though. Essentially they want a lower base salary with a lower overtime trigger. The devil, as always, is in the details. The details in the offer last December, in a word "sucked". Thus a 90% no vote. Negotiations have resumed.
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Why would anybody want to become a pilot these days when you can earn more money in unqualified jobs or as a tradesman without the associated stress? Management would want to watch this march to the bottom on conditions because otherwise they will only be able to recruit people who aren't suitable because the smart ones are pursuing careers elsewhere or there won't be anybody to choose from.