Two QF A380s to be scrapped

[milehighclub]

How's the form or history of QF with hiring on different (read 'cheaper') contracts?

They've been doing it with cabin crew for over 12 years.

 

[RooFlyer]

Before the 380s can come back, they'll need to train about 65 Captains. They'll have to come from somewhere, so there's a ripple effect. If they said "go" right now, I still think it would take about 12 months to actually get things to more or less normal. I expect that most of the 380 training department also took the VR, so you'll need to replace them first.

I've lost track of the airlines that have officially stopped flying A380s, but presumably there would be a number of crew from those airlines that could be recruited by QF, sooner rather than later?

If so, would their training over to QF operations be quicker than training QF crew from other aircraft?

 

[RAM]

I've lost track of the airlines that have officially stopped flying A380s, but presumably there would be a number of crew from those airlines that could be recruited by QF, sooner rather than later?

If so, would their training over to QF operations be quicker than training QF crew from other aircraft?

As it happens, of the over 800 (I recall) 'jobs' that allow exemption to the international border closure - flight attendants & pilots are listed despite ample numbers of Australian citizens being stood down by all the airlines.

As pretty much all airlines A380s (other than one Chinese Airline) have pretty much been grounded for about as long as each other - overseas air crew would provide no advantage, & potentially some disadvantages as they would have to 'unlearn' their airline's specific tweaks & then learn Q's versions.

Certainly would be fun seeing AJ explain how overseas air crew are better than the stood down Australian A380 air crew (other than being paid 20-30% lower salaries). Absolutely certain he'd have some 'smirk & mirrors' enhancement angle - 'Introducing more foreign language capability' perhaps?

 

[mviy]

QF plans to get the first 6 A380s back in the air by the end of 2023. The remainder would come back after demand picks up further.

 

[Melburnian1]

QF plans to get the first 6 A380s back in the air by the end of 2023. The remainder would come back after demand picks up further.

But today QF said it would invite applications from cabin crew for 'several hundred' voluntary redundancies.

 

[mviy]

But today QF said it would invite applications from cabin crew for 'several hundred' voluntary redundancies.

Yes, but it is keeping some pilots on. It feels rehiring or training cabin crew for the A380 will be much quicker than finding and training pilots who’ve never flown it before.

 

[Melburnian1]

Yes, but it is keeping some pilots on. It feels rehiring or training cabin crew for the A380 will be much quicker than finding and training pilots who’ve never flown it before.

That's a given that training cabin crew is faster, as one of the AFF aviators explained some time ago: limited SIM availability was one of the reasons IIRC. But didn't most if not all of the QFi A380 pilots/first officers depart the company "voluntarily"?

 

[milehighclub]

It feels rehiring or training cabin crew for the A380 will be much quicker

It has nothing to do with training. It has to do with the cost of the crew on the older contract. They want them gone. Plain and simple. That is why they are offering VR.

.

 

[jb747]

There’s possibly a slight difference in the amount of time required to train people to fly a 380 vs working in one. The outcomes of not getting said training right are also a little different. The 380 pilots are readily usable on any other Airbus, and as virtually all have flown Boeing, it‘s not much more difficult to send them there.

My take though, is that the 380s will not be back at all, in any number other than zero. The bad news will trickle out, so as not to spook the share price too much, until we eventually hear that the decision has been made to get some A350s to replace them. Or Cessna 172s.

The company already has a contract that it likes on the 787, and that will simply spread to other types as the older ones disappear.

 

[levelnine]

The company already has a contract that it likes on the 787, and that will simply spread to other types as the older ones disappear.

How big are the differences between the B787 and A380 contracts? Are the conditions a little or a lot better on the A380?

 

[Flying Fox]

What percentage of pay would an A380 pilot receive who is only doing training vs normal flying?

 

[Daver6]

QF plans to get the first 6 A380s back in the air by the end of 2023. The remainder would come back after demand picks up further.

QF have a track record of making forward looking statements then never hold true. It's almost like they just announce something to get their name in the news for free brand recognition.

 

[Kendall Roy]

Sportsbet should frame a market on the A380s returning. No shortage of exotic options there!

 

[RAM]

Q has a very clear & present danger almost requiring theorising about the potential return of some A380s into service.

So much 'questionable content' in any statements made these days about Qantas, such as 'well capitalised' for example.

After all Q raised $1.3bn in new equity on 25/26 June 2020 yet just 4 days later Q's total equity was $1.5bn - is this Q's idea of 'just-in-time' capital?

Without that successful equity raising then Q's Equity would have been just $0.2bn represented 6 times over by deferred tax benefits & intangibles of $1.2bn. See excerpts from BS at bottom of this post.

As Q has not written down the value (yet) of the A380s to zero then it must keep saying it intends to bring some back to service - otherwise the auditors will be forced to require both a complete write-off AND the creation of a liability to cover the ongoing storage costs & estimated future disposal costs. Remember it was not long ago that each 8+ or more year old A380 appeared valued close to list price (based on 'value in use' valuation used by Q) a value which is likely close to twice the actual amount paid for each A380.

Taking all this into account, & adding in $468m of Deferred tax assets (30% of Net losses generated) - Q's total equity stands at just $759m, less than half what it was at 30 June 2020.

Ain't accounting great.

As of last December, 31st to be exact - Q had more liabilities (owed more money) than it had tangible assets and this was despite Q not writing down the valuations (ex depn) for around 290 of its fleet for over two years. Does anybody believe airframe valuations have not fallen in two years for a fleet with an average age approaching 15 yrs?

Hard to understand how they convinced their Auditors that their previous 'value in use' valuations for its entire international fleet had not fallen by even $1 despite over 95% not being on scheduled service aka grounded and having a net cost not benefit.



Now this is even more of a concern (for AFFers et al) than it may seem.

Why?

Qantas states that QFF points have a zero cash value in contrast to VA who had them 100% cash backed protected by a separate trust structure. If you were to deduct the value of outstanding QFF points on issue then that NTA per share figure would not be pretty.

With $17.8 bn of liabilities to $0.76 bn of Equity, and 200% of the equity value represented by future tax benefits & other intangibles ($1.53bn) - it is curious for anybody to describe Q as 'well capitalised'.

By way of comparison - VA had written off some hundreds of millions in 'deferred tax benefits' by June 2019, and carried in its BS under $60m as of 30.6.2019.



Even more so, if AJ's comments about a full year loss of around $2bn (is that pre-tax or post-tax?) then Q's equity may soon be below $0.5bn perhaps even as low as $0.2bn - and yes that is after adding in an additional deferred tax benefit of a couple of hundred million.

Should we be seeking a market on whether Q will announce another late June equity raising?

 

[mviy]

I think QF would prefer if possible to have international travel going again before another equity raising. It is better for the existing shareholders that capital be raised at as high a price as possible, whilst still providing a decent discount to the prevailing share price at the time.

However, international travel resuming significantly later than QF expected could force their hand to raise before then.

At some point they may wish to do an equity raising to help them afford to get the planes for Project Sunrise. I think Alan Joyce has a big enough ego that he'll want to go on the first Project Sunrise flight before he eventually quits QANTAS.

 

[UP4014]

A sibling who (still) has a job at QF said the California 380's (half of the 380 fleet) unlikely to be back but there is some planning going on for the refitted ones.

 

[jb747]

What percentage of pay would an A380 pilot receive who is only doing training vs normal flying?

What do you mean by “only doing training”? Undergoing it, or providing it? Training in the aircraft or the sim?

 

[moa999]

Accounting is just fiddling.
Qantas Loyalty is in the equity books at about 0.

If QF wanted they could do what Virgin did and sell a %ge - and boom - equity created.

And you don't write down aircraft every year - that's one offs - you depreciate them - and yes depreciation has been occurring during Covid...


Anyhow, as for the six.
VH-OQC (one of the early, non-refurb aircraft) has just positioned to LAX, and is then reportedly onwards to DRS for heavy maintenance.

VH-OQC Flight Tracking and History - FlightAware

Track VH-OQC flight from Los Angeles Intl to Abu Dhabi Int'l

flightaware.com

Would you be spending all the $s on this flight and maintenance if its future was as a tin can... Given it was already at VCV.

 

[Daver6]

Maybe they're bringing one back to do some repatriation flights and speed up the process?

 

[mviy]

Maybe they're bringing one back to do some repatriation flights and speed up the process?

The A380 can't fly as far as the 787 can with an acceptable load so it's not very suited to doing repatriation flights, especially from places like the U.K.