Qantas - what will Coronavirus mean in the medium term?

[MEL_Traveller]

My QF8 from DFW in June is still an A380.

I'll be happy for a switch to a 787 with a guaranteed 'mini first suite'

 

[I love to travel]

Qf 35 and 36 seem to be 787 after 1 April.

 

[Jos888]

Russell Brand has cancelled his performance at the Perth Concert Hall tonight because a lady attended a concert there on Sat night and yesterday tested positive for Covid1. Things are getting ridiculous

 

[jase05]

Qf 35 and 36 seem to be 787 after 1 April.

Really hoping by time we fly QF35 in October things have returned to normal otherwise I’ll be cancelling

 

[get me outta here]

But, I have an F reward bkg.

I'll be happy for a switch to a 787 with a guaranteed 'mini first suite'

 

[Ansett]

But, I have an F reward bkg.

Check for change in routing now via Sydney? and when is your booking.

 

[get me outta here]

It’s JFK - DFW - SYD. Still showing as an A380 in June. I booked that in case I needed to replace JFK - HKG - SYD CX in J.
I’ll hold both of them until cancellation time to see which one to keep. Lucky I hadn’t already cancelled CX due to the China virus.
HKG may turn out better if the US fails virus control. Anything can happen anywhere.

Check for change in routing now via Sydney? and when is your booking.

 

[RSD]

HKG may turn out better if the US fails virus control.

Sounding like an epic failure over there and Trump seems to be in denial. Mind you we have some infected people here doing dumb stuff too.

 

[RSD]

As at 1555 AEDT on Monday 9 March, not long before the ASX closes for the day, QAN (i.e. QF) shares were 'off' (lovely word) 42 cents to $4.24, a 9.12 per cent drop. In one day that's a very large decrease for any share in percentage terms. On 3 January 2020, these shares closed at A$7.36 so that's a far bigger decline and shows how 'the market' has digested the virus news.

While beyond the scope of this blog, some investors must be facing margin calls. Not good for their financial 'health.'

If you thought today was bad then tomorrow is shaping up to be much worse as U.S. exchange futures are down a long way for tonight's trading session

 

[get me outta here]

Italy about to overtake S Korea with the most confirmed cases after China.

Sounding like an epic failure over there and Trump seems to be in denial. Mind you we have some infected people here doing dumb stuff too.

 

[Cheatah]

Downgrade QF1/2 to 787 and operate SYD-PER-LHR?

This. (they could leave it going via Sin however given its a hotspot prehaps not)

I think they may postpone the Chicago route, use the aircraft to go to LHR. US air travel declining similar to 9/11 levels.

 

[ellen10]

I'm not an expert but I supect that the company saying that would be violating the Fair Work Act - and it also encourages people to attend work when they are ill. What industry is he in?

NSW Health

 

[RSD]

NSW Health

They are still subject to the Fair Work Act just like everyone else.

 

[juddles]

Sounding like an epic failure over there and Trump seems to be in denial. Mind you we have some infected people here doing dumb stuff too.

RSD, Trump is never in denial.

He runs a show that works, even though it is hard or impossible to defend morally. I think that although many smart people within the USA and the rest of the world hate him, they are unwittingly playing his game. He does not care if he is loved by such people - he just uses ridiculous twitter feeds to keep the angry opposition so immersed in hatred and reactive outrage that they are physically incapable of focussing on anything that could actually remove him from power. Thus he keeps winning, and there is no end in sight for me of this....

He learnt that it is numbers, not intellect, that counts in a true democracy. And he is perfectly correct in that - hence his obscene success. But getting back to this thread about Qantas, is AJ equally skilled in managing through a crisis? Just a few months ago I perceived that AJ had Qantas on a "Sunrise or bust" heading. Corona has truly thrown the spanner into the works. Can AJ move with the times and find a way to make this upheaval useful? Only time will tell. It may allow him to retire unhappy products like the A380 on best-possible grounds. It may allow him to trim Qantas of a shiite-load of staff and then come back with less people on harsher contracts. Who knows....

 

[ja1]

Trump seems to be in denial. Mind you we have some infected people here doing dumb stuff too.

I am always amazed that people think there is any chance of Trump doing anything ethical, useful or making any kind of sense other than by accident or complete coincidence. Or in the specific circumstance of if something benefits Trump or his family then if it also benefits his country he doesn't have a problem with that too..

In terms of infected people doing stupid stuff - well.. that's just life isn't it ? We have non infected people doing pretty dumb stuff (look at the mass panic buying - it's been a week and my local supermarkets (4 I've checked so far) are still unstocked with a number of ranges.

We don't give people good information, we don't give them realistic paths. Yes, everyone who is infected should self isolate for 2 weeks - because more than 50% of the families in Australia cannot raise $1,000 in an emergency, may not have leave, work in the gig economy or have a mortgage so large that they're one paycheck away from serious financial trouble.

Sometimes I feel like Paul Parker from Nelligen really does have the right message (ignoring his personal politics) to politicians in general and one in particular.

 

[ja1]

But getting back to this thread about Qantas, is AJ equally skilled in managing through a crisis?

We know the answer to that question already don't we ? Just look at Qantas in 2011 and look at their position today. You don't have to like the man to look at the results..

And now he has fuel dropping (and he likely can hedge a couple of years forward) where it's almost half what it was back in 2011, he has government support for any safety measures the group needs to implement, almost certainly has government support in the form of charters and other work and his board is really unlikely to want to change leadership in a crisis in any case..

So yeah, I'd say AJ and his airline is in the box seat. It's all theirs to stuff up but I don't think they will.

 

[moa999]

Definitely interesting times for the Board/Snr Management.

What do you do with Sunrise?
Can you get the cost base down quickly? Leave without pay, redundancies but also have enough staff when business resumes
Can you take advantage of opportunities in this period (like the AA 737s post 9/11)

 

[dajop]

And now he has fuel dropping (and he likely can hedge a couple of years forward) where it's almost half what it was back in 2011,

Some discussion over on Flyertalk about SQ fuel hedging "losses" (to quote), as they are hedged at high prices (relative to the current point in time). I have read that QF is 100% hedged for 2020, although couldn't find at what price. In terms of demand vs cost vs competition trade off, any ideas of what this will mean?

 

[juddles]

Some discussion over on Flyertalk about SQ fuel hedging "losses" (to quote), as they are hedged at high prices (relative to the current point in time). I have read that QF is 100% hedged for 2020, although couldn't find at what price. In terms of demand vs cost vs competition trade off, any ideas of what this will mean?

My understanding is that QF have done alright, historically, through fuel hedging. They are a company that to this day manages to retrieve hard-earned points from people that paid handsomely for them, for such trinkets as Dyson vacuum cleaners. Do not underestimate their ability for perverse success.

 

[moa999]

Hedging depends on whether you've done it with forwards (locking in a price) or options (have an upfront fee) (from that SQ thread looks like they are mostly forwards).

But also what your competition is doing.
If you are fully hedged at say US$55/bbl for 18months and the competition is totally unhedged (unlikely) then you are in a world of pain as they can cut fares more easily than you.