QAN - Qantas Airways

[barney]

No, but do you have a contact number for lost hippo's?...

Lol … You may need some educating from the great 'Ogden Nash' FR

"Behold the hippopotamus! We laugh at how he looks to us,
And yet in moments dank and grim, I wonder how we look to him."
- Ogden Nash

 

[Dona Ferentes]

and gee, some impact from da lurgi

(and just bought tix with Virgin because in the near term Jetstar doesn't seem to provide certainty with industrial action looming)

Qantas will slash flights across Asia as the coronavirus crisis continues to damage airlines around the world. The airline said reduced travel due to the outbreak is expected to carve between $100 million and $150 million out of its earnings this year, although Qantas added that the impact will be softened by lower fuel prices, which are also being caused by the economic disruption from the virus. The airline will reduce its overall group capacity to Asia by 15 per cent until at least the end of May, with Qantas International capacity to be cut by 16 per cent, and Jetstar seats to the region be reduced by 14 per cent. Flights between Sydney and Shanghai will remain suspended and that the lucrative route to Hong Kong from Sydney will be halved from 14 flights a week to seven.

"Cononavirus resulted in the suspension of flights to mainland China and we're now seeing some secondary impacts and weaker demand on Hong Kong, Singapore and to a lesser extent Japan," Qantas chief executive Alan Joyce said. Qantas flights from Melbourne and Brisbane will also be reduced, as will Jetstar flights to Japan and Thailand, and intra-Asia flights. Qantas and Jetstar flights between Australian and New Zealand will be reduced by around 5 per cent, while the group's domestic capacity will be reduced by 2.3 per cent in the second half of the year "to better match demand".

Staff asked to take leave amid flight cuts

"We have 30,000 employees across the group," Qantas chief executive Alan Joyce said. "The way we'll manage it is to ask across the 30,000 people, for people to take annual leave, long-service leave and use their leave balances, which are quite considerable."

Mr Joyce said asking employees to take paid leave would allow the airline to manage the staffing situation for at least six months. "What's important is that we have flexibility in how we respond to coronavirus and how we maintain our strategic position more broadly," Mr Joyce said.

 

[Clansman]

Have noticed that most Qantas staff seem to be of a more mature age.
Which seems to work well generally... exception is a few of the hostess's on the actual flights.
When a hostesses butt is that big that they can't walk down the aisle without knocking passengers shoulders, spilling drinks in people's hands, things have to change...

Would you like a towel Sir?
No, but do you have a contact number for lost hippo's?...

That's always been the bugbear about Qantas. The aging fleet... and we aren't talking about the planes.
If they ever sort out their business model and adopt the Emirates model it could really run, but it is essentially a heavily unionized over pampered workforce. A bit like an old eastern bloc communist country that needs a good solid 2-3 generations of early onset diabetes across it's population en masse to address attitude change. When a person flies Qantas, you almost feel left out if you don't get barked at or don't get something spilled on you. Travelers could well be asking for toilet paper next.

 

[Trav.]

I am not sure why sentiment is so bullish so placed a short trade on this and will see how I go.

Down 2.4% on Friday. Should have held on for another day but still learning......happy to have picked up trade signal but still need to work on execution as usual.

 

[barney]

....happy to have picked up trade signal but still need to work on execution as usual.

Lots of positives to take from the exercise Trav .…

Certainly a lot better than when I traded FMG Short about 10 years ago thinking it was over valued lol (The bad old days!)

 

[sptrawler]

From experience, QAN is basically the Australian big Bank of the airlines in Australia, picked them up a few years ago at 96c, also picked up Air NZ in the mid to high 20c.
Most first World Countries need an airline of last resort, the Government didn't ask Tiger air to go into China, to collect Australians from the corona virus area.

 

[frugal.rock]

The government owned Qantas for around 50 years...and didn't sell until they had knocked a lot of the competition out... went private again around 1995.
Qantas would do well to remember that.
F.Rock

 

[rederob]

International airlines will be amongst the biggest losers as COVID-19 begins to bite.
Although QAN's recent report was positive, those benefits are likely to pale into insignificance over the next month or two. QAN's international routes need full planes to be profitable, and right now they are cutting back routes and, soon, I image the number of services on those still left.

Support is at $4.70.
I expect that to fail badly.
This is a market where irrational fear prevails so expect outcomes worse than you expected (what?).
On the flipside, if State tourism campaigns work then internal travel might benefit.
However, given the flight to toilet paper I suspect many here regard a few hours locked in a cube recycling germs is not the way to go.

 

[rederob]

Support is at $4.70.
I expect that to fail badly.

Closed at $4.66 today.
Another dollar dip will not be too hard to achieve as nobody is keen to fly at the moment.
I might just be one of the travellers happy to pick it up AFTER it has safely landed.

 

[Garpal Gumnut]

Some people were catching knives by buying QAN today.

The BBC is tipping Korea Air be "fighting for survival".

https://www.bbc.com/news/business-51799142

Avoid QAN is my feeling.

gg

 

[Dona Ferentes]

Avoid QAN is my feeling.

gg

More practically, for most people......

Yield Management is a bitch, the algo is too clever.
- Pay far in advance => cheap but still flying? (when you want)(if at all?)
- Delay to closer to the date. B expensive.

Workforce is in for a rough trot

 

[Garpal Gumnut]

Europe begins to isolate.

gg

From The Guardian

1h ago21:33

All air traffic to Denmark from areas severely hit by coronavirus, will cease later on today, the prime minister, Mette Frederiksen, has said.

“Effective from later today, all air traffic to Denmark from red areas will be suspended,” she said, referring to areas hard hit by the coronavirus such as northern Italy, Iran and South Korea.

 

[Garpal Gumnut]

From @rederob on another thread.

""QAN off my radar for the next month unless there's a miracle.- I have it down as value at $2.00 but expect it now to dip nearer to $1.50. Best thing about QAN is that next year it will offer great fares as it has the best hedgers of aviation fuel in the world, by a long margin. I expect calendar 2021 will deliver excellent returns for QAN.""


A good post@rederob.

May I ask you or other members of ASF to expand on QAN hedging of aviation fuel particularly in relation to the fall in the price of oil over the last four quarters.

Either here or in the QAN thread.

gg

"I refuse to join any club that would have me as a member." Quote Groucho Marx
Je suis Charlie

 

[rederob]

From @rederob on another thread.

""QAN off my radar for the next month unless there's a miracle.- I have it down as value at $2.00 but expect it now to dip nearer to $1.50. Best thing about QAN is that next year it will offer great fares as it has the best hedgers of aviation fuel in the world, by a long margin. I expect calendar 2021 will deliver excellent returns for QAN.""


A good post@rederob.

May I ask you or other members of ASF to expand on QAN hedging of aviation fuel particularly in relation to the fall in the price of oil over the last four quarters.

Either here or in the QAN thread.

gg

"I refuse to join any club that would have me as a member." Quote Groucho Marx
Je suis Charlie

Last year QAN hedged all FY 2020 jet fuel costs, allowing them price certainty. This will be impaired by the COVID-19 flight cancellations.
But to show the advantage of good hedges, in FY 2019 their jet fuel costs increased to $614 million or by 19 per cent, while market AUD jet fuel prices increased on average ~28 per cent compared to prior year.
I suspect that QAN will now be locking in 2021 fuel costs to the maximum extent possible.
If you google what QAN has done over other years wrt to fuel hedging there's lots of info and shows they do it well.

 

[Garpal Gumnut]

Thanks @rederob.

QAN may be worth a look. I'll draw my lines on the charts this evening.

Joyce is Applied Maths, Technology and Science of Management trained so I'd expect him to run a fairly dispassionate numbers response to Covid-19.

This is the approach needed to ensure the survival of a company.

gg

 

[Dona Ferentes]

Am thinking of liquidating my Qantas points (inFrequent Flyer) and turning them into wine.

I know the rational / optimal action is to utilise for future flights, but
- am unlikely to fly soon
- if I do travel, some bargains may be thrown up; cheap tix with any number of airlines
- QAN likely to devalue the FF points even more, as the balance sheet gets pressured
- wine is delivered to my door

 

[Garpal Gumnut]

Am thinking of liquidating my Qantas points (inFrequent Flyer) and turning them into wine.

I know the rational / optimal action is to utilise for future flights, but
- am unlikely to fly soon
- if I do travel, some bargains may be thrown up; cheap tix with any number of airlines
- QAN likely to devalue the FF points even more, as the balance sheet gets pressured
- wine is delivered to my door

Good thinking.

Or turn them into TWE.

gg

 

[Garpal Gumnut]

Quite a distressing article on Qantas tax liabilities, Alan Joyce and their balance sheet from Michael West News.

https://www.michaelwest.com.au/too-big-to-fail-qantas-the-corporate-elite-and-the-coronavirus/

gg

 

[Padowan]

I’ve never had much success catching a falling knife. Before CV19 Qantas was performing well and is well run company. Given the brand and national importance I’ve heard commentary that the government would bail qantas out if required. If this were all true it would surely make QAN one of the best leverage plays to a recovery in the global travel industry ??
China seems to be past peak infection rates, with Europe 1-2 weeks away and Australia 4 weeks away from peak CV19 according to some commentators does this mean we could see some normality by year end for QAN?

 

[rederob]

I was clearly an optimist a few weeks ago.

I can't see any indication that the wheels are down, so until this flight path changes and we are sure the passengers are safely disembarked, look elsewhere.