Qantas big loss was probably the most expected result for the June 30 financial year thanks to the impact of COVID-19, the lockdowns and border closures, and well-paced trading updates from the airline’s board and management.
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Another solid update from e-tailer Kogan, Qantas investors have given the airline the biggest thumbs down imaginable in rejecting help the company boost its liquidity while Sigma Healthcare has sold and leased back two of its Distribution Centres (DC’s) for $172 million, half the number of centres in the original deal.
Read MoreRatings group, Moody’s reckons Qantas’ $1.9 billion capital raising, 6,000 job cuts and other measures announced late last week will be “credit positive because Qantas will use the proceeds to strengthen its balance sheet and improve its financial flexibility, in line with its financial framework.”
Read MoreQantas has announced an equity raising of $1.36bn. The proceeds will fund a three-year recovery plan and pay down debt.
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Qantas’s $1.86 billion raising is the second biggest so far in the COVID-19 crisis after the NAB’s massive $4.25 billion in May. The detail in presentations to investors reveal the airline will spend the next two years hacking and slashing at its businesses, staffing levels, and facilities with full benefits of the changes not emerging until 2023.
Read MoreQantas has finally bitten the bullet and started adjusting to life as an airline in a COVID-19 world. It revealed on Thursday plans to sack at least 6,000 of its 29,000 employees, will report a massive loss for the year to June in excess of $2.8 billion, and has launched a $1.9 billion capital raising in response to the COVID-19 pandemic.
Read MoreGlobal ratings group, Moody’s reckons Qantas and Air New Zealand are among the best-placed airlines to start the long-haul to recovery from the impact of the COVID-19 pandemic lockdowns and social distancing rules that have all but halted international and domestic air travel.
Read MoreQantas and Jetstar yesterday revealed the new look for airline travel once the COVID restrictions on travel are eased and international and intrastate border controls disappear in short social distancing rules will be not enforced on travel, but offered masks and revamped check-in procedures will be the new ’normal’.
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Like the big banks, Qantas is looking to go on a post-COVID-19 diet, getting rid of expansionist ideas, businesses that don’t earn their way or detract from future gains.
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Watch US and global airline shares slump tomorrow after Warren Buffett told the Berkshire Hathaway virtual annual meeting that his company had bailed out of all its holdings in America’s four major carriers – United, American, Southwest, and Delta.
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Virgin Australia wants a bailout from Canberra, regional operator, Rex does as well, while Air New Zealand, which last week received a $NZ900 million capital injection from the Kiwi government, has started following its Australian rivals and slashing staff numbers.
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Singapore Inc has come to the party and bailed out the nation state’s global flag carrier, Singapore Airlines in a $S19 billion refinancing that will stop the crippled airline from imploding.
Read MoreIn stark contrast to Cochlear’s fund raising, Qantas said on Wednesday that it had borrowed $1.05 billion in new debt to help see it through the coronavirus crisis.
Read MoreDon’t be surprised if trading in the shares of Qantas and Virgin Australia is suspended after the federal government warned against non-essential interstate travel and the states tightened their borders to stop the spread of coronavirus.
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The crisis in the travel and aviation sector worsened yesterday with the Federal government banning all foreigners from entering Australia from midnight tonight and again told Australians returning from overseas that they will have to undergo 14 days of quarantine.
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Yesterday saw a host of downgrades and other poor news from ASX companies of all sizes – all understandable in the current terrible investment climate as the combination of the coronavirus pandemic and the idiotic price war in oil between Russia and Saudi Arabia wreck market confidence and share price.
Read MoreMore problems for our three listed carriers yesterday. Qantas and Jetstar have announced another round of cuts, REX Airways has gone into a trading halt while Standard & Poor’s has downgraded the rating of Virgin Australia’s debt to B-.
Read MoreQantas has announced a -23% cut to international capacity and a -5% cut to domestic. Guidance has been withdrawn because of the unknowns surrounding coronavirus.
Read MoreQantas will seek to reduce international capacity by -23% until September 2020, or at least until the operating environment is clearer. To ensure the balance sheet can withstand the challenges, the company is cancelling the $150m off-market buyback.
Read MoreQantas told the ASX before trading opened that it now planned to slash almost a quarter of its international capacity thanks to the slide in demand from the coronavirus outbreak.
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How long will it be before Qantas and Virgin Australia follow the second round of cost cuts and capacity reductions revealed by Air New Zealand yesterday?
Read MoreUBS believes there is an increasing likelihood that Qantas will pursue direct flights to New York and London. An increase in capital expenditure is expected as a result.
Read MoreQantas has deferred a decision on Project Sunrise to March 2020 as it narrows down the type of aircraft, advising there would be no regulatory obstacles from the Civil Aviation Safety Authority regarding non-stop flights.
Read MoreQantas shares have hit a new series of all-time highs after an investor briefing proved to be what investors wanted to hear from the airline.
Read MoreUBS considers the most material disclosure at the company’s investor briefing was a five-year target for Qantas domestic earnings (EBIT) growth of 18% and 22% for Jetstar domestic.
Read MoreUBS suspects changes in focus at competitor Virgin Australia ((VAH)) should mean Qantas will maintain an advantage and Virgin will not be able to rely solely on cost initiatives to improve profitability.
Read MoreQantas shares sold off yesterday after the September quarter trading update yesterday left investors unimpressed.
Read MoreMorgan Stanley assesses, while some early demand indicators for FY20 are subdued, there is more confidence the downside risks are captured and there is limited near-term impact from volatility in the oil price.
Read MoreQantas shares ended the day up nearly 5% at one stage yesterday as the market concluded the airline’s 2018-19 result wasn’t as bad as a 17% slide in net earnings might say.
Read MoreThe US government has tentatively approved Qantas’ proposed expanded alliance and revenue pooling agreement with American Airlines. The arrangement will mean the two carriers co-ordinate flight schedules, pricing and capacity and share revenue on international routes between the US, Australia and New Zealand.
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New CEO, new broom, new guidance, lower profit, kitchen sink to come? Sound familiar? Well, that’s what we got from Virgin Australia on Friday morning and it raises questions about the health of the domestic and international aviation markets.
Read MoreDespite signs of consumer weakness in many other sectors, management considers the current demand environment is healthy. First half pre-tax profit was slightly below Credit Suisse estimates.
Read MoreQantas shares were sold off and then drifted higher yesterday in the wake of the announcement of another lift in dividend and share buyback.
Read MoreFirst quarter operating results were in line with expectations and Deutsche Bank notes forward bookings have increased to 8% from 6.2%. Management has also increased full-year fuel costs guidance.
Read MoreVirgin has just upgraded its outlook despite higher fuel costs, yesterday Qantas said it is looking at a rise in first-half revenues because of a rise in forward bookings and higher airfares have helped offset rising fuel costs.
Read MoreQantas was able to produce another strong result, at the top end of guidance, through unit revenue growth and prudent capacity growth in the face of higher fuel costs and wage inflation. Hence, the broker notes, shareholders were again rewarded with capital returns.
Read MoreA touch of turbulence for Qantas shares yesterday in the wake of the release of its 2017-18 results with the expected super profit and dividend, plus a buyback.
Read MoreRichard Goyder, the man who ran Wesfarmers for 12 years will become chair of Qantas – as well as chairing Woodside, and heading up the AFL.
Read MoreQantas joined the Confession Season yesterday on the upside with confirmation of previous markets for a solid rise in earnings to an new all time record for the year to June 30.
Read MoreMeanwhile Qantas has sold its catering arms to its global alliance partner Emirates, in a move it says will help it to focus investment in its core airline operations.
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