Enlighten us, not with qualitative 'opinion' give us quantitative empirical evidence of the 'value of JQ'

Qantas do not need a new fleet is correct with one important caveat: They desire to allow the business to wither and eventually collapse cease. It would seem that this is the 'theme of your posts' and is interesting from a European perspective that other airlines used a similar implied threat last time round. Nothing new under the Sun! 'We can kill this airline off if you pesky employees don't sign'.

Practically speaking , ignoring the execution risk, the Qantas business is worth more than the segmented parts. Case in point the International network feeds the domestic and indeed is the reason for the "Frequent Flyer' business. Without an international network to 'redeem points' into it is not much more than a marketing database. Ask Macquarie what their valuation was without an International flying business. Airlines around the world understand this, analysts understand this, so please enlighten us how Qantas not getting a fleet with rising fuel prices is sound business acumen? We are not quite sure they would be able to claim the business is 'de-transformed' again, when they personally proclaimed its transformation less than three years ago, receiving huge option driven bonuses for proclaiming so.

So if this bunch are actually running an airline, it is elementary that strategic decisions are now well overdue: Qantas need a new fleet

What reality Czech says varies entirely to what we were told at a
group meeting with the CFO years ago.
Qantas International had shrunk to its minimum size.
In the current form it is still dramatically smaller. For example look at London.
Qantas had 4 747s a day to LHR and it now only has one A380 and one 787.
Gareth Evans made the point that if Qantas shrank any more it would put the Frequent flyer business in jeopardy.
The love child of Jetstar Domestic and Asia and Japan could lose control of a massive feed as would Qantas Domestic.
It would be the equivalent of outsourcing your entire army. The CFO pointed out that there was a limit to how small it could shrink and guarantee a secure, dependable feed for all the other entities. As he said there was a minimum Qantas fleet size.
Emirates or whomever the partner could effectively suffocate the business should circumstances change and wield significant power. Qantas executives have made some questionable decisions however that would be beyond stupid.
Pilot wages are 1-3 % of the operational cost as explained by Tony Webber the ex Qantas economist.
To paint pilots as the make or break factor is disengenuous and factually incorrect. Understand RC hates pilots but that’s the math. It must annoy RC enough to troll PPRUNE to deny that limited supply and high demand is driving Airline pilot wages higher. It must be upsetting for him to see market forces not go his way. Pilot Pay globally is on the rise. Every credible financial press has numbers to back it up. Forbes, Bloomberg etc etc etc.
International is doing well now and routes are being added. That will have more to do with the economy and fuel price than pilot costs or executive genius.
Qantas benefits disproportionately to a lower fuel price as the fleet is one of the oldest globally and hence has a high fuel burn.
Apart from eight 787 Qantas really haven’t replaced or replenished or grown the fleet at all.
As fuel costs rise we will see just how wonderful the emperors clothes are.
Qantas will need a new fleet, but the executives have been happy spending billions buying back shares which is great in the SHORT term for shareholders and thus executive bonuses. Long term the business Would benefit far more from a steady and measured renewal of the fleet. Lower fuel burn, less maintenance, passenger comfort, improved OTP. Bonuses and short term share prices are not measured on such discipline and long term windows. Qantas is not alone in this global trend.
The banking royal commission has uncovered the perils of short term decision making and thus bonus culture in many ASX companies. The banks are not alone.
Rated D is correct. Qantas need a new fleet. Short term share price movement and record bonuses will delay this as long as possible. Inevitable when you get paid $30 million to delay spending.

Enlighten us, not with qualitative 'opinion' give us quantitative empirical evidence of the 'value of JQ'

Qantas do not need a new fleet is correct with one important caveat: They desire to allow the business to wither and eventually collapse cease. It would seem that this is the 'theme of your posts' and is interesting from a European perspective that other airlines used a similar implied threat last time round. Nothing new under the Sun! 'We can kill this airline off if you pesky employees don't sign'.

Practically speaking , ignoring the execution risk, the Qantas business is worth more than the segmented parts. Case in point the International network feeds the domestic and indeed is the reason for the "Frequent Flyer' business. Without an international network to 'redeem points' into it is not much more than a marketing database. Ask Macquarie what their valuation was without an International flying business. Airlines around the world understand this, analysts understand this, so please enlighten us how Qantas not getting a fleet with rising fuel prices is sound business acumen? We are not quite sure they would be able to claim the business is 'de-transformed' again, when they personally proclaimed its transformation less than three years ago, receiving huge option driven bonuses for proclaiming so.

So if this bunch are actually running an airline, it is elementary that strategic decisions are now well overdue: Qantas need a new fleet

Could it be that Qantas 'executive management' beta test IR strategy here?


You know to whom this question is addressed :E

Project sunrise amused Boeing. It was however a 'game changer' for Qantas a whole 'team' spent a week coming up with the name!





Thanks Austral

Does Qantas actually have the money for the 99 A320 order?

With the US treasury yield nudging 3.00% credit costs are rising.
https://s17-us2.startpage.com/cgi-bi...8903eba2f084b6

Has Qantas' self indulgent share buybacks (totaling $2 billion) mean they lack sufficient capital and will defer/cancel any further re-equipment of Qantas International in order to fund the 'non-cancellable' JQ order? Has Qantas realised that the cost of funds has increased. Combined with contango in the jet fuel price, Qantas faces a self induced problem of a fuel inefficient fleet, rising jet fuel prices, a $9.5 billion order for the under performing JQ brand, and rising credit costs. Almost like the tide has turned?

If so it makes sense that the industrial narrative being pedaled by 'RealityCzech' that Qantas International may again, despite their pronouncements of 'transformation' (and consequent big bonus payments) be in jeopardy. It would suit an industrial play to obfuscate the real issue of management incompetence. In other words, 'Qantas do not need a new fleet' and blame the labour unit costs (pilots) hoping that no body remembers the FY15 'transformation'.

Qantas need a new fleet

Or even capacity to borrow.

Qantas Debt/Equity ratio was around 75% BEFORE any JQ jets were put back on the books. Along with everything else that Qf has wasted money on, those bonuses were VERY expensive.

Nice to know Qantas still have some of their Avro 504 fleet in the domestic terminal. If the shrinking program is successful enough returning to it's original (and it has to be said, highly successful!) format, then maybe RC is correct, and QF could operate Sydney Harbour Joyflights - possibly advertising is virtual presence with a towed banner up the Northern Beaches? Has anyone looked at this? Is the Avro on the books as far as IFRS16 is concerned?

This is a very important point. The impact of IFRS16 is difficult to gauge (for the individual airlines), but its impact is widespread. Qantas is not the only airline having to re-organise the lease structure.
The DE ratio is definitely something concerning firms long airline stocks. Qantas may well find some pressure in FY19 on their funding costs (think credit rating) Time will tell.

Ultimately the type of narrative Mr Clifford was seeking to bed in (the point of this thread) may indicate pressure is becoming evident. As the yield curve now indicates a higher interest rate environment, rising fuel prices levers up pressure on Qantas' fuel included CASK. Combine this with a possibly weaker AUD and Qantas input prices rise disproportionately. RealityCzech is assisting this 'Clifford narrative' by linking fleet to Qantas' International future prospects. The fleet renewal is well overdue, they know it. Their expansion of JQ, although ambitious has never reaped a tangible return. Low fuel price saved the day.As we monitor multiple sources of input price volatility, it appears that Qantas could be sailing into a storm entirely of their own making. Indeed it is suggestive that the self indulgent (share buy backs) beahaviour has exposed the shareholder when prudent financial strategic management would have seen the business better prepared to handle what are clearly for Qantas at least rising seas and falling tides.

You have stated a number of times that JQ international have more aircraft than Qantas international. How do you arrive at that proposition?

Keith corrected for readability.
Jetstar group have more aircraft.

Jetstar International will never be reported as a separate segment despite Qantas management swiftly deciding to suddenly report Qantas International separately in FY12. Qantas management wanted a narrative of 'terminal decline' Thus to open Jetstar to any sort of like for like comparison invites disaster, which is why they refuse to segment it.