One analyst had previously suggested the statutory loss would be '$1.02 billion', so this result is poor.
There goes the CEO's claim that break even would be achieved in 2019-20 (though no doubt he'll concentrrate on the 'underlying profit.'
By typing in 'QAN ASX quote' or similar to one's browser or smartphone, the second result that appears allows one to delve into the full ASX announcements including the inevitable multi-page colour Powerpoint presentation, which will give far greater detail than the media release.
Its recent share issue (to the retail market) raised less than $72 million against a target of $500 million. That is informative as to what 'mums and dads' think of its prospects. In contrast, capital raisings (also partly to retail investors) for the likes of NAB (banking) were heavily oversubscribed recently.
Ominous that the CEO says 'AT LEAST 6,000 will leave...' Hard to know how many more as the outlook is so uncertain, but I doubt it'll 'just' be '6000.' This will mean further redundancy costs for the QF Group, as it's difficult to foresee that 20000 staff will still be required if travel demand drops.
$267 million in JobKeeper payments means QF must have been one of the largest recipients of this, as other major employers such as Woolworths and Coles didn't have to access these subsidies as they had no need to stand down staff. It's complex, but arguably JobKeeper has saved QF a lot of money in not having to immediately pay redundancies, and instead given it the ability to keep staff 'on the books' for what it hopes will be a return to greater travel demand (although still way below what it used to be).
Border closures (especially from issues like Melbourne's high rate of virus cases and resultant curfew) must be continuing to eat into reserves. Interesting that the CEO has only said 2020-21 will deliver a 'significant loss', although too early to quantify.
It says it received '$515 million in (Federal) Government support' for flights but the 'net benefit' was only '$15 million.' This is hard to believe: wouldn't the profit margin be a lot higher than under three per cent? I bet the 'costs' QF loaded onto each flight were huge, such as allocating a higher than usual amount of head office overheads.
Is QF really a loyalty scheme with the airline as a side issue? The FF scheme made more money than anything else.
In 2019-20, QFd seat occupancy decreased to 75.9 per cent, down 1.9 percentage points on 2018-19. International flights seat occupancy decreased to 84.1pc, also down 1.9 per cent.
The detailed PowerPoint slides state 'international (flights) moved into losses as a result of international border closures.' Not surprising.
The detail states that JQ incurred an underlying loss before interest and tax of $26 million for 2019-20, although the domestic business made $112 million profit. So that by extrapolation must mean JQi made a loss of around $138 million. The latter hasn't flown since about 23 March 2020 IIRC.
3K is not just terminating 25 per cent of staff but reducing its fleet of 8 by five, some of which appear to be headed for JQd although there's mention of 'lease returns.'
Naturally, no mention in the media release of how the ACCC had to pull up airlines like QF re failure to refund passengers, or quickly refund them, for flights that were cancelled.
And, to delight one of our aviators on AFF, the detailed PowerPoint slides merely state 'A380 fleet moved to long term storage for foreseeable future' at the bottom of the page on QFi.
Very optimistic of QF to suggest that 'recent developments in Victoria and the reimposition of some border restrictions' are 'not expected to have a material impact on the three year plan.' At present, Sydneysiders and Victorians can' travel to Queensland, the latter can't travel anywhere by air, and there are heaps of other border restrictions for states like SA, Tasmania and WA that have been in place for months (although they vary) and haven't just been recently 'reimposed.'
In the previous five years, QF's 'return on invested capital' varied from 16.2 to 22.7 per cent, but in 2019-20 dropped to just 5.8pc. Who knows if it will be even lower in 2020-21?
QF claims to have an 'unencumbered asset base of $2.5 billion' including 46 per cent of its 314 aircraft. The tiny font note to this PowerPoint page says aircraft values in the accounts reflect 30 June 2020's position. AFFer RAM has written extensively on this.
There is also a mention (otherwise unspecified) of 'return of up to 16 leased aircraft if surplus to requirements' so this suggests further fleet rationalisation is possible.
How many months until the Federal Government has to take some equity in this company? I give it about a year, if that despite the supposed '$4.5 billion' in liquidity that the CEO will boast of.
www.qantasnewsroom.com.au
