How long before Qantas goes into VA
 

Qantas was supposed to have circa $2.00 B in cash and borrowed another circa $1.2 B against the B 787 fleet that they owned. Supposedly X 3 the size of Virgin who had $ 700 M in cash and debts now revealed of circa $6,8 B. Given the Government imposed recession/depression on airline activity because of the pandemic, how long can Qantas last before they are like VAH and will have to appoint an Administrator as potential insolvency looms? If the Government imposed recession/depression continues as distinct from the market drive version in the1930s it is indeed worrying times and QF could be under threat?

Never - Its the national carrier.

Our Federal Government has no problem supporting Rex - without a chairmans lounge and other perks, so QF has nothing to be worried about.

In an update call recently they said they have reduced cashflow to 1/12th of what it was 6 weeks ago, the freight part of the business is booming, they expect a return to domestic operations soon and have the option of another $3bn in debt raising should it be needed. Looks like they can get Jetstar domestic and Qantas domestic going with Tasman also expected shortly. They said the modelling is now better than what they initially thought and they would be bullish in trying to gain market share. They said well in excess of 12 months at this level of operation before they are in trouble with all flights that get up and running from here extending that timeline. So don’t expect VA anytime soon.

They will obviously exit with larger debt and reduced cash. The issue at hand is going to be International for the next 2 years, and fleet replacement bills. 110 Neo project is the largest finance project in the books. Those bills started last month.

Its clear they wont need that many Neos in the next 2-3 years. Airbus and Boeing are not overly friendly when it comes to pushing back or cancelling. Unless you buy more which they already did, to adjust timeframes.

Depends how many Neos are tied to leasing companies. If the contracts are signed they are going to be up the gutter.

Paying Airbus over a Billion bucks a year going forward is going to be tough.

What do you think that actually means?

Yes and no. More debt from the $1b cash raised. Lots of LSL/AL burned. Wiping the books of the liabilities.

I expect the postponed shareholder payout to be cancelled. $150m there.

The kicker will be how long international is out for.

Will be interesting to see come September once Jobkeeper finishes.

I wouldn’t put to much faith in the trans Tasman helping much
With no other viable International flying with in 18 months other than that you will have Air NZ operating 777s on every route, Qantas running 330s, Jetstar running 787s and Virgin....well who knows. If VA aren’t there, the alliance QA have with AirNZ will be torn up.
it will be an economic bloodbath 2nd to only a certain virus we are all aware of now.
I imagine Air NZ will operate direct Darwin, Cairns and a few others we never thought about too and they are government owned now.

30,000 staff at $750 per week for 26 weeks is 585 million in Jobkeeper paid to QANTAS.

Some of that will flow to the staff, a lot won’t. A third of staff haven’t been stood down so there’s roughly 200 million straight to the company.

Other staff are on full time paid leave, others are using a mix of paid leave and Jobkeeper so the true benefits will be somewhere north of 200 million. Not huge but significant in the current environment.

I wouldn’t mind seeing some of their freight statistics. I’ve read numerous business articles stating that although freight is down, it is really cycling at the moment. COVID has reduced capacity as aircraft are grounded, but due to everyone being stuck at home there is lots of online shopping taking place. As a result of the increase in freight but decrease in available aircraft, some freight transport costs have increased by 20 to 30% per kilogram. Qantas has a robust freight network and infrastructure so I would be curious to see what the current revenue dollars are from their freight division.

I highly doubt that would go down well with Canberra.

The lawyers in Canberra might like that one. The government will soon be forward thinking corona reimbursement, shelling out a few hundred million for QFs bottom line wouldn’t cut it.

Why? That’s exactly what it’s designed for.

everything that direct anywhere says is exactly correct and is the intent of the Jobkeeper scheme. its a wage subsidy to help businesses through COVID 19 and to ensure it’s workers wages don’t fall below $1500 a fortnight. everything QF is doing is completely legal.

the job keeper needs to passed onto the employee. The employer doesn’t get to keep it.

each eligible emolyee needed to register for it as an in dividing.

Last weeks dial in they gave the impression freight was supporting the business well and demand was increasing, shortly after that a LWOP email followed for 767 and 321 type rated Capt and FOs. Seems they need to get those express freighters up and running now with their 321P2F aircraft to keep up.

Yes they do.

Eligible employers (30 or 50% reduction in turnover depending on the size of the business) get $1500 per eligible employee. The employee has to fill out their own paperwork.

If the employee is stood down without pay the employee gets the full $1500 pre tax.

If the employee is still working but getting less than $1500 per fortnight the employer has to make up the difference using Jobkeeper and keeps the remainder. eg. a casual barista who has been employed for more than 12 months, who normally gets paid $1000 per fortnight will now earn $1500. The employer pays them their normal $1000, tops it up with 500 from Jobkeeper and keeps the remaining $1000. This is why the system is a windfall for some low paid employees who are getting a payrise funded by the government.

If the employee is still working or, importantly in QANTAS’s case, accessing paid leave while stood down at a rate of greater than $1500 per fortnight, the employer pays the employee as normal and banks the $1500. This is a real windfall for the employer. QANTAS is currently getting tens, it not hundreds, of millions of dollars in leave off the books, subsidised by the government.

QANTAS will get roughly 600 million from the federal government between now and September. It’s not possible to determine how much of that will go to the company and how much to employees. Back of the envelope, given 10,000 people are still working and the remainder are accessing a mix of Jobkeeper and their leave, I would expect QANTAS to keep perhaps half of that amount.

I hate to say it, and I don't agree with it, but Jobkeeper goes to the employee and employer.

Don't want your employer to get it? Simple, go on centerlink Jobseeker instead.

It's true if you are on LSL / AL then Qantas effectively get to keep your $1500. But according to the government, that is what it is designed for.

Quote:
Never - Its the national carrier.

So is VA, just as much as QF.

So when the administrators wipe the current shareholders from VA and Aussie Twiggy buys 100% of VA Mach 2, is QF still a national carrier just as much as VA Mach 2?

freight is booming out of China. Week ago had a yank who couldn't find a freighter to fly PPE from China to USA(typical yank, he'd only tried U.S. companies). Found one owned by a UK outfit that could do it at reasonable cost. It was a pax aircraft with all the seats ripped out. Sounds like lots of "freighters" going into China light or empty, coming out heavy. Wonder why Australian exporters aren't getting onto this.

Someone in China is making a lot of money out of PPE.

I think QF international will be closed and all made redundant, with a new startup by Qantas when it’s required to outsource the International flying at slave labour rates !