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IFAM

Old 6th Oct 2020, 04:43
  #41 (permalink)  
 
Join Date: Jan 2008
Location: NQLD
Age: 34
Posts: 147
There are many forms of subsidy

IFAM is all about getting exports to their destinations. I’m not sure any other explanation will help get this idea through. It’s about helping a different industry maintain jobs in Australia. Which is exactly what you all seem to be banging on about with airline subsidies.....

Subsidies take many forms around the world.
- Qatar received a $2 billion USD “equity injection” in March, mainly due to the continuing blockade from Saudi, UAE, Kuwait etc. I imagine they’ll get more money this year due to Coronavirus.
But.... This money is from their SHAREHOLDERS

- Singapore Airlines raised up to $10 billion USD from capital raising and various debt options, including loans against aircraft. So yes the Singapore Government contributes as a SHAREHOLDER, but they also borrowed significant money against assets.

- CARES package is a loan that comes with some pretty strict conditions on how the company will be run. Retaining employees is only one part of it, director fees, dividends, etc are also limited.
Southwest declined any loan due to the conditions (and not being desperate). Delta also declined a second application due to having better options.

- Lufthansa received money from the German govt, but again this came with significant conditions attached. They were initially resistant to receiving the cash due to the restrictions.

- Air NZ. As has been stated the “loan” being offered is not as competitive as what they may be able to get on the open market. But again it’s been said by Air NZ they considered it a last resort option. It took them until late August to start using the funds.

- Qantas. Has been raising money from shareholders and also debt linked to assets (aircraft). But QF/VA etc have a huge advantage because they can stand down staff without pay. Yes it sucks for the workers, but we are talking about the survival of the company. QF would be in a bad position without the ability to stand down staff.

- The Aus govt already subsidises domestic ops with direct funding. There’s also JobKeeper which is a direct wage subsidy.

My point with all of this is almost all airlines around the world have access to various forms of assistance. That includes QF!!! Stand down plus JobKeeper is an advantage Air NZ doesn’t have.... VA have effectively received a massive leg up by taking on a new owner in the form of Bain. The various advantages of administration and the ability to restructure is something QF can’t do.

Just because it doesn’t take the form you want or expect, doesn’t mean they can’t access various forms of assistance.

Just to add:
- the USA allows international to travel to many countries, their list of restrictions is actually quite small. There’s also minimal restrictions on domestic travel within the US.

- NZ also has high value exports that need to get to market. So I’d imagine the Air NZ flights actually operating have quite a bit of cargo on board.

If you wonder why QF have grounded just about all international ops, look at what the Aus Govt actually allows before you go claiming there’s a conspiracy against QF. The border is effectively closed to all, including Australians. The limited number of flights carrying belly cargo provide more than enough capacity to cover the arrival caps and any outbound traffic. So why would QF/VA want to burn MORE cash in a market that’s effectively dead due to government restrictions??? So it’s much better for them to stand down staff and wait until restrictions are lifted. Common sense would also suggest this path.....
aviation_enthus is offline  
Old 6th Oct 2020, 06:34
  #42 (permalink)  
 
Join Date: Feb 2000
Location: Outofoz
Posts: 678
If you wonder why QF have grounded just about all international ops, look at what the Aus Govt actually allows before you go claiming there’s a conspiracy against QF. The border is effectively closed to all, including Australians.
The state governments control the numbers into the respective capitals, not the feds!
A limited number of operational airframes and crew will make jack%$# difference to the long term viability of the airline. In fact, it's dawning on the geniuses that their calculators have malfunctioned in working out the best "cash burn rate" moving forward.

Qantas management has chosen the path and used the smokescreen of government policy to hide what is now slowly proving to be some very dumb and costly decisions.
hotnhigh is offline  
Old 6th Oct 2020, 08:56
  #43 (permalink)  
Thread Starter
 
Join Date: Oct 2013
Location: Somewhere
Posts: 216
Originally Posted by aviation_enthus View Post
IFAM is all about getting exports to their destinations. I’m not sure any other explanation will help get this idea through. It’s about helping a different industry maintain jobs in Australia. Which is exactly what you all seem to be banging on about with airline subsidies.....

Subsidies take many forms around the world.
- Qatar received a $2 billion USD “equity injection” in March, mainly due to the continuing blockade from Saudi, UAE, Kuwait etc. I imagine they’ll get more money this year due to Coronavirus.
But.... This money is from their SHAREHOLDERS

- Singapore Airlines raised up to $10 billion USD from capital raising and various debt options, including loans against aircraft. So yes the Singapore Government contributes as a SHAREHOLDER, but they also borrowed significant money against assets.

- CARES package is a loan that comes with some pretty strict conditions on how the company will be run. Retaining employees is only one part of it, director fees, dividends, etc are also limited.
Southwest declined any loan due to the conditions (and not being desperate). Delta also declined a second application due to having better options.

- Lufthansa received money from the German govt, but again this came with significant conditions attached. They were initially resistant to receiving the cash due to the restrictions.

- Air NZ. As has been stated the “loan” being offered is not as competitive as what they may be able to get on the open market. But again it’s been said by Air NZ they considered it a last resort option. It took them until late August to start using the funds.

- Qantas. Has been raising money from shareholders and also debt linked to assets (aircraft). But QF/VA etc have a huge advantage because they can stand down staff without pay. Yes it sucks for the workers, but we are talking about the survival of the company. QF would be in a bad position without the ability to stand down staff.

- The Aus govt already subsidises domestic ops with direct funding. There’s also JobKeeper which is a direct wage subsidy.

My point with all of this is almost all airlines around the world have access to various forms of assistance. That includes QF!!! Stand down plus JobKeeper is an advantage Air NZ doesn’t have.... VA have effectively received a massive leg up by taking on a new owner in the form of Bain. The various advantages of administration and the ability to restructure is something QF can’t do.

Just because it doesn’t take the form you want or expect, doesn’t mean they can’t access various forms of assistance.

Just to add:
- the USA allows international to travel to many countries, their list of restrictions is actually quite small. There’s also minimal restrictions on domestic travel within the US.

- NZ also has high value exports that need to get to market. So I’d imagine the Air NZ flights actually operating have quite a bit of cargo on board.

If you wonder why QF have grounded just about all international ops, look at what the Aus Govt actually allows before you go claiming there’s a conspiracy against QF. The border is effectively closed to all, including Australians. The limited number of flights carrying belly cargo provide more than enough capacity to cover the arrival caps and any outbound traffic. So why would QF/VA want to burn MORE cash in a market that’s effectively dead due to government restrictions??? So it’s much better for them to stand down staff and wait until restrictions are lifted. Common sense would also suggest this path.....
From the WTO
Their definition of a subsidy.
https://www.wto.org/english/tratop_e/scm_e/subs_e.htm

Qantas did tender on several freight contracts offered through IFAM. No point burning money with a race to the bottom trying to compete with subsidised airlines as mentioned previously. You can’t refute the facts. Shareholders? You mean owners.
Troo believer is offline  

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