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-   -   So you need a new fleet Leigh? (https://www.pprune.org/australia-new-zealand-pacific/604103-so-you-need-new-fleet-leigh.html)

Rated De 11th Jan 2018 19:47

So you need a new fleet Leigh?
Qantas says foreign ownership cap could make fleet overhaul harder

'chairman Leigh Clifford said the Qantas Sale Act, which caps foreign ownership at 49 per cent of shares, was still holding it back, including in its ability to raise capital'.
An admitted aviation light weight, Mr. Clifford claims it is the foreign ownership that 'restricts' Qantas raising capital.

In simple arithmetic Qantas bought back its own shares to the value of $1.24 billion (all on market). With another $500 million of 'capital giveback' there is almost $1.75 billion with which to find capital to buy a fleet.

Of course share buy backs have a dubious history. Forbes magazine which am sure you have a copy of did a number of pieces about the dubious nature of the practice.


It isn't legislation stopping Qantas buying a fleet, it was executive bonuses and the option vesting dates! With share prices 23% lower, of course someone/something else is the reason why Qantas lacks a modern fleet of long range twins.

V-Jet 11th Jan 2018 20:16

If they did raise more capital you can bet the same result would occur. Why waste valuable capital on things like long term assets?

TBM-Legend 11th Jan 2018 21:03

But according to the experts on PPRUNE its OK for Virgin Australia to be 90% foreigned owned!!!

V-Jet 11th Jan 2018 21:37

It's not the ownership that Qf staff have issues with. It's the obscene waste of resources at the expense of the long term health of the Company.

Rated De 11th Jan 2018 21:54


Share buy backs don't reward terribly many people

TBM-Legend 11th Jan 2018 21:54

I'd be more concerned if I worked for VA...

I guess there is always an option to work elsewhere too...

rjtjrt 11th Jan 2018 22:45

Pretty soon they will be asking Gov for an unsecured $3B loan.

bangbounceboeing 11th Jan 2018 23:41

Good to see ya back on the " I hate everything anything Virgin bandwagon again TMB 🙄

busdriver007 12th Jan 2018 01:32

So let me see $1.6 billion on Jetstar(according to a former QF Exec) and $1.75 billion on Share Buybacks and there is your $3.0 plus billion AJ was after. Time to pull the eject handle! That money could have bought a lot of fuel efficient jets.

AEROMEDIC 12th Jan 2018 11:50

Here we go again...

I wonder which statement comes first.
"We need a level playing field..." or The Qantas Sale Act is redundant"... or perhaps "We may have to shed staff to save money".

Stand by...

blow.n.gasket 12th Jan 2018 12:14

So we have the Amazing transformation engineered by the Pikey.
How many staff are still working under the same EBA’s on the same aircraft to the same destinations with the same load factors ?
Next question is , what is Qantas’ Effective Full Time Employee to Aircraft Ratio Alan?
Or the Drone to Worker ratio for us plebs.

Rated De 12th Jan 2018 18:43

I wonder which statement comes first.
"We need a level playing field..." or The Qantas Sale Act is redundant"... or perhaps "We may have to shed staff to save money".
Whilst it is understandable that the manufactured decline of Qantas International was designed to shock and awe staff just the way Chairman Clifford likes it (as did Alan, he was handsomely rewarded), nothing has changed.

The mistake the staff made, sitting through the reeducation days, Orwellian though it must have been was to believe anything had changed.

When the 'extend and pretend' business cycle completely rolls over, EBA negotiations will follow with the familiar rhetoric: "cost neutral, times are tough, there is no more money"

They blew the time in the sun making themselves wealthy.
The first shot in this new IR campaign is the 457 visa, quietly announced when everyone is not paying attention and digesting plum pudding.

4Greens 12th Jan 2018 18:50

The Government needs some control over Qantas as it is the fourth arm of the military. When you need lots of troops taken to a trouble spot.

major problem Qantas can do it,

Bin there done that.

Rated De 13th Jan 2018 08:10

The Government needs some control over Qantas as it is the fourth arm of the military. When you need lots of troops taken to a trouble spot.
You bet it does, try enforcing national interest with a contract!

Of course the economic benefit of a Qantas controlled by Australians, results in around AUD$7 billion of direct and another AUD$4.5 billion indirect economic activity. Whilst the report by Deloittes, was commissioned by Qantas to serve some political interest in 2016 and thus open to critique as most inputs are interna(Qantas provided) lEven allowing for the input bias, if it is say $9 billion that is a substantial contribution to GDP.

As an aside I remain perplexed why foreign ownership of a now Quasi (pun intended) national carrier is even discussed when the landmass of Australia's size and the sheer distances across the continent lend itself directly to air travel.

Leigh Clifford is neither an airline man nor a patriot. Qantas cleverly ensured any mainstream media criticism of their actual performance was curtailed when 30 journalists went on the junket to Seattle. Newspaper performance being what it is, Qantas' advertising spend is important to survival. :(

But just to state the obvious it isn't the sale act Leigh.

Rated De 16th Jan 2018 21:01

Qantas fuel spend for ASK is way higher than peer airlines attributable in a substantial part to fleet decisions.
So Leigh can you read?

Qantas 'worst major airline' for fuel efficiency on trans-Pacific flights, study suggests - ABC News (Australian Broadcasting Corporation)

LeadSled 17th Jan 2018 03:40

Rated DE et al,
The ABC piece is a statement of the bleeding obvious.

With the QANTAS investment grade credit rating, it will have zero problem financing a modern fleet at extremely good rates.

So the question must be asked, is the present management actually managing the airline in the best interests of their shareholders, as required by the Corporations Act 2001.

The various references to the QANTAS Sales Act is a furphy, in my opinion.

Tootle pip!!

Rated De 5th Feb 2018 09:43

Qantas will let one Boeing 787 option lapse, undecided on others - CEO | Euronews

So new A320 NEO for JQ and the 'mythical 50 aircraft order' still hasn't happened...
More implied threats of toys going elsewhere and delays! Must be contract season!

Still need a new fleet Leigh, but guess IR need to run another scare campaign first!
In the meantime continue running a defunct fleet across the pacific burning lots more fuel than competitors and blame the staff for the cost difference..

blow.n.gasket 5th Feb 2018 13:25

How many $ Billion share buy back was it ?
That boosted the share price , how much ?
This occurred how long before the senior executive share scheme vested ?
How many 787’s would Those $ Billions buy ?
What sort of return on investment would that expenditure make ?
How much has been expended on the Jetstar Asia business ?
What return on Investment has been reported on those ventures ?
Come FY 2019 , FIRS16 comes into effect with off balance sheet debt having to be accounted for on the books .
Will be interesting to see how that effects debt equity ratios , share price and the potential to effect debt covenants .
99x. 320’s for the amazing business that relys on financial alchemy that is soon to change due to International Accountancy laws.
WHERE’s the money for those coming from ?
Yet we are told , more 787’s won’t be ordered for Mainline until their costings are proven.
The amazing business has been operating 787’s for how many years ?
What sort of business plan is Alan using?

Rated De 5th Feb 2018 23:05

What sort of business plan is Alan using?
Mr Joyce is a child of the financially engineered airline fraternity. Alchemy is an apt description.

As fixed cost is fixed and changes not substantially no matter what the airline model, off balance sheet leasing and driving down staff costs were two planks in the model. Load factors need to be consistently above 80% and yield is tricky to capture. The model is demand elastic relative to a more traditional structure as the revenue stream is very sensitive to price change: The traditional airline is not as susceptible. Jetstar had a role but not what Mr Joyce and Leigh Clifford hoped.

Qantas imagined not only using leverage against the staff but effectively replacing the terms of employment entirely. Perhaps 'work choices' encouraged them, who knows!

They have benefited personally very handsomely.

They need a new fleet, they are signatories to IATA's CO2 reduction plan, seeing 1.5% annual reduction to 2020 and further reduction into carbon neutral. Other than a grounding and lock out a new fleet is the only real way to achieve this given their route profile.

They spent nearly $1.75 billion on share buy backs and capital returns. Curiously their own options vested at the same time...That is a big start for a new fleet, but given the staff contract negotiations start soon it is wash, rinse and......repeat! IR first

Any sort of real regulatory oversight would at least investigate the correlation...

bazza stub 6th Feb 2018 01:37

seeing 1.5% annual reduction to 2020 and further reduction into carbon neutral

The real reason behind single engine taxi and giving the pax a stinking hot cabin I suppose.

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