QF profit to fall 90% - shares falling

[ethernet]

Qantas Shares in the $1 Bin

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Admin: I'm sure there is a thread that this should be moved to.

Well, under a dollar and alan joyce has bill shorten style mouths defending an outcome that should see him invited to step aside. You leader - you got unquestioned loyalty from tame lap dogs - you take the blame - or is it responsibility.

International QF pilots of heavies see the writing clear enough. That's what you get when a Natrional
Icon is reduced to a 'business' by a foreign manager who does not get it. Well I hope the other directors love seeing their bonuses evaporate and being exposed to full aussie tax rates.

Some might say the only thing about AJ that outperforms, is awarding $$ to himself well. BTW Emirates is a good match I think, but they may fancy their subsidized fuel more than QF.

Any more drops and SQ may issue a hostile? takeover to get those USA rights.

 

[ajca]

Re: Qantas Shares in the $1 Bin

I love the internet - the place where everyone gets to be an equities analyst AND a management consultant.

Admin: I'm sure there is a thread that this should be moved to.

No doubt.

Well, under a dollar and alan joyce has bill shorten style mouths defending an outcome that should see him invited to step aside. You leader - you got unquestioned loyalty from tame lap dogs - you take the blame - or is it responsibility.

I tried putting this into Google Translate but it couldn't figure out what the source language was.

International QF pilots of heavies see the writing clear enough. That's what you get when a Natrional
Icon is reduced to a 'business' by a foreign manager who does not get it. Well I hope the other directors love seeing their bonuses evaporate and being exposed to full aussie tax rates.

Qantas became a 'business' when the government floated it on the ASX. Maybe even before then. It is a public company with a mandate to deliver returns to shareholders.

The 'foreign manager' as you describe him is an Australian citizen who has just as much right to run an Australian company as anyone else. You might not like how he does it but clearly xenophobic remarks don't help anyone.

Well I hope the other directors love seeing their bonuses evaporate and being exposed to full aussie tax rates.

I think you will find that the Qantas Group board of directors don't get paid bonuses, and oh boy are they already exposed to paying full Aussie tax rates on their directors fees.

Some might say the only thing about AJ that outperforms, is awarding $$ to himself well.

Some might say that AJ has navigated the business through massive challenges - a global financial crisis that has gone on for five years, constantly increasing fuel prices, intense competition on international routes from airlines that are substantially subsidised by their governments, insane unions trying to "bake him slowly". Just to give you the perspective of, well, reality.

BTW Emirates is a good match I think, but they may fancy their subsidized fuel more than QF.

Why would an Emirates / Qantas agreement have any negative impact on EK's fuel bills?

Any more drops and SQ may issue a hostile? takeover to get those USA rights.

You're right! On this one we agree. All SQ would have to do is go to the Australian parliament and get them to secretly repeal or change the Qantas Sale Act, overcome immense public angst about Asian companies taking over the Flying Kangaroo, get the Foreign Investment Review Board to approve the transaction, then move Qantas out of OneWorld into StarAlliance...

It would be cheaper and much less painful for SQ to just pay the Australian government $500 million a year cash for the trans-Pacific rights.

 

[cove]

Twenty years on we have the middle eastern airlines running amok with subsidies when all Qantas get from our current government is criticism. It is a very uneven playing field in the international markets for the Qantas premium brand and it looks like a smaller Qantas international that's for sure. Then we add the carbon tax to export jobs to other nations!

 

[ajca]

I hate this current environment where QFi is being considered a lesser asset than QFf or JQ. Without QFi the airline is a lame duck, no better than Australian Airlines was... The whole reason behind merging the airlines in the 90's was to create one strong airline. It needs to be correctly managed back to greatness.

It is easy to say this from the safety of your web browser - much harder to do it from the boardroom I would imagine.

Most of the complaints are about Qantas withdrawing from routes on which it wasn't making money and delaying investment in its fleet. It is not at all obvious to me how continuing to fly routes that are not commercially viable and investing in fleet that it couldn't afford would be a path "back to greatness".

However I can see how this could work if we broadened the definition of "greatness" to "restructuring in bankruptcy or asset fire-sale at the hands of lender-appointed administrators"... just like the great American airlines!

 

[whatmeworry]

I hate this current environment where QFi is being considered a lesser asset than QFf or JQ. Without QFi the airline is a lame duck, no better than Australian Airlines was... The whole reason behind merging the airlines in the 90's was to create one strong airline. It needs to be correctly managed back to greatness.

AJ's plan?

It is all part of Joyce's grand plan: first move the international business into the black and beyond to make enough money to meet what in financial jargon is called the cost of capital.
The division's performance this week illustrates there is a long way to go. At this point Qantas international is a major drag on wider performance.
But closing it down is not an option. Joyce said that having an international premium airline was integral to running a successful premium domestic airline and a profitable (and valuable) frequent-flyer division.
In doing so, he has probably nailed the real sleeper in the airline industry - the domestic airline and its ability to deliver robust earnings in the face of its new competitive threat from a revitalised Virgin Australia.

Trouble on a crowded dance floor

 

[SeatBackForward]

Most companies havea policy of not commenting on the share price.
I would prefer the Board and CEO focus on running the business rather than worrying about short sellers and speculators.

Share markets, traders and brokers look at a technical analysis, Boards and Excutives focus on fundamental analysis.

 

[cove]

Re: Qantas Shares in the $1 Bin

Well who bought the 90 odd million shares traded on Friday??
At sub $1 Qantas is in play!

 

[ajca]

Re: Qantas Shares in the $1 Bin

Well who bought the 90 odd million shares traded on Friday??
At sub $1 Qantas is in play!

If the market thought it was in play then it wouldn't have closed under $1.

 

[sutho58]

Re: Qantas Shares in the $1 Bin

maybe the same super funds that purchased 30 mil at an average of $1.32.. as I'm sure that it wasn't them that sold at $1

 

[cove]

Re: Qantas Shares in the $1 Bin

The short sellers won the first round. When I bought at 97 there were about 9 million up for sale at that particular moment.
If they are 50 cents on Tuesday then the short sellers will be doing great!

 

[whatmeworry]

Qantas is in secret crisis talks with arch rival Emirates and other airlines about the possibility of a comprehensive alliance or an equity tie-up after its share price plunged below the psychological barrier of $1 to close at 97¢ last night.

Qantas has talked to Air New Zealand and Singapore Airlines.

I would how the tie up/s would work? What happens to QFF?

 

[ethernet]

Re: Qantas Shares in the $1 Bin

See Mac Bank and 'Options'. A very slick way of not paying taxes. This works best if the only direction is 'UP' and in the event of the unthinkable, options are simply not 'enforced'. Or see Telstra. In this case, QF shares dived. Someone is responsible - and those 'metric's' for AJ are not AFAIK on public record.

See the Tim and Julia show. Everyone knows what a lap dog is. Not one QF board member spoke out of turn. AJ got complete unity, then. Head nodding and subservience to master is not becoming.

The Heavy International pilots (with mortgages) know the International business has been carved off and hung out to dry/bleed. If QF(Int) goes bust, or even contracts - the pilots will have a lot to loose. I concede the environment and fuel factors are hostile, but relative to BA or others - the market has figured in a discount.

BTW Emirates is a good match I think, but they may fancy their subsidized fuel more than QF.

Why would an Emirates / Qantas agreement have any negative impact on EK's fuel bills?

Because the Sandpit airlines have a subsidized fuel cost. And because the laws of physics say it is cheaper
to stop half way over, than load the non-stop plane up on takeoff. Good logic, except pax don't want a stopover,
they want direct as they value their time more than the marginal cost of fuel.

Regardless of whatever , AJ was at the wheel when the wheels fell off. The buck stops here. The project BAP (Blame Allocation Planning) is here and now - before outsourcing could be blamed.

And if Virgin do a deal with say Emirates first, and play the futures market well, QF may stay in that sub $1 bargain bin - which does not please mum and dad investors one bit.

 

[ajca]

Re: Qantas Shares in the $1 Bin

See Mac Bank and 'Options'. A very slick way of not paying taxes. This works best if the only direction is 'UP' and in the event of the unthinkable, options are simply not 'enforced'. Or see Telstra. In this case, QF shares dived. Someone is responsible - and those 'metric's' for AJ are not AFAIK on public record.

See the Tim and Julia show. Everyone knows what a lap dog is. Not one QF board member spoke out of turn. AJ got complete unity, then. Head nodding and subservience to master is not becoming.

The Heavy International pilots (with mortgages) know the International business has been carved off and hung out to dry/bleed. If QF(Int) goes bust, or even contracts - the pilots will have a lot to loose. I concede the environment and fuel factors are hostile, but relative to BA or others - the market has figured in a discount.

BTW Emirates is a good match I think, but they may fancy their subsidized fuel more than QF.

Why would an Emirates / Qantas agreement have any negative impact on EK's fuel bills?

Because the Sandpit airlines have a subsidized fuel cost. And because the laws of physics say it is cheaper
to stop half way over, than load the non-stop plane up on takeoff. Good logic, except pax don't want a stopover,
they want direct as they value their time more than the marginal cost of fuel.

Regardless of whatever , AJ was at the wheel when the wheels fell off. The buck stops here. The project BAP (Blame Allocation Planning) is here and now - before outsourcing could be blamed.

And if Virgin do a deal with say Emirates first, and play the futures market well, QF may stay in that sub $1 bargain bin - which does not please mum and dad investors one bit.

There are so many things wrong with the financial analysis in this post that I literally do not know where to begin.

 

[cove]

Re: Qantas Shares in the $1 Bin

The interesting thing about the short sellers is they have to "borrow" the shares to sell so they may be getting those shares from our institutions like Australia's superannuation funds.

 

[elbarto]

Re: Qantas Shares in the $1 Bin

Because the Sandpit airlines have a subsidized fuel cost.

I guess those subsidies have been scaled back since EK posted a 72% slump in profit which came as the result of rising fuel costs.

Emirates profit slumps 72% as fuel bill surges - Transport - ArabianBusiness.com

Even if they get subsidised fuel out of DXB, why would they get subsidised fuel anywhere else?

 

[markis10]

Twenty years on we have the middle eastern airlines running amok with subsidies when all Qantas get from our current government is criticism. It is a very uneven playing field in the international markets for the Qantas premium brand and it looks like a smaller Qantas international that's for sure. Then we add the carbon tax to export jobs to other nations!

Most of those airlines are young, and getting the same treatment QF got for most of its life in terms of government capital injections, its almost 20 years since the Government stumped up $1.3B to prop up the airline when it was last in a position like this and I cannot see it happening again. QFi's issues are fleet based at the core, and it's this pressure that's creating the bad decisions now impacting most parts of the business, one cannot help but wonder where they might be if they had a lot more twins offering more frequent options from the major cities. It will also be interesting to watch JQs performance when they get new longhaul aircraft at closer to normal commercial pricing, in comparison to the current cheapies that comprise a significant part of their fleet.

 

[Sprucegoose]

Oh and I just want to put it out there that as a shareholder I think the lack of communication from QF management these last few days regarding the share price is an absolute utter disgrace. #nuffsaid

Any comms will be to the ASX, and public.

AJ does worry about the share price. When he heard that a plane [qf32 as it turned out] may have gone down who did he call first?

 

[JQ29]

Most of those airlines are young, and getting the same treatment QF got for most of its life in terms of government capital injections, its almost 20 years since the Government stumped up $1.3B to prop up the airline when it was last in a position like this and I cannot see it happening again. QFi's issues are fleet based at the core, and it's this pressure that's creating the bad decisions now impacting most parts of the business, one cannot help but wonder where they might be if they had a lot more twins offering more frequent options from the major cities. It will also be interesting to watch JQs performance when they get new longhaul aircraft at closer to normal commercial pricing, in comparison to the current cheapies that comprise a significant part of their fleet.

Not so sure.. the era you quote .. most if not all airlines government owned and run. It was then LEVEL playing.
Now some 30-40 years on we operating in more sophificated "market". Private Equity v Government v Sheiks who has deeper pockets? Not Private Equity of Shareholders.. Tax Payer funded airlines..taxes can continue to go up right?

There are three issues here in my opinion:

1. Playing Field; Uneven
2. Outdated Work practices
3. with employees holding onto benefits and rates that are not commercial

The price of assets b/w airlines are marginal.. given all coming from same manufacturers. This means that game is margin and price on the ancilliary services, such as funding/intererst, crew, engineering, catering, ramp, freight, ground services etc.. is where you are going to compete. QF cannot sustain costs in Australia, just far too high and not price comparable for same services in Asia.. This is global competition at play....

 

[ChrisCunard]

What exactly would you have expected them to say?

Anything to try and stem the flow!! Don't panic, here's what we are doing, we have a plan to solve this share crisis, CEO / board are competent. Etc etc. if the last few days trading trends online QF will be worth less than VA in a week...

 

[eastwest101]

Re: Qantas Shares in the $1 Bin

The interesting thing about the short sellers is they have to "borrow" the shares to sell so they may be getting those shares from our institutions like Australia's superannuation funds.

Isn't this sort of thing what got us all into this in the first place in 2008? :evil: