Does anyone think that Qantas will go under?

15 replies

Andy B

Qantas - Qantas Frequent Flyer

Member since 20 Aug 2013

Total posts 22

Does anyone think that Qantas will seriously go under? I'm just sick of all the reports and I doubt anything will happen. Thoughts?

Ben84

Etihad

Member since 23 Jan 2013

Total posts 74

No, Qantas won't go under. If American Airlines is still flying then Qantas will as well. 

watson374

Qantas - Qantas Frequent Flyer

Member since 17 Aug 2012

Total posts 1,285

Exactly. It's not performing well, but it has a strong position. Funnily enough, management seems reluctant to publicly admit either. Anyway, they are essentially "too big to fail" and will probably be bailed out if it really gets to that (same for the Big Four banks, really) but I honestly don't think it will come to that.

crosscourt

Qantas - Qantas Frequent Flyer - Chairmans Lounge

Member since 01 Sep 2011

Total posts 91

Agree i dont believe it will go under but remember Pan Am and TWA were also considered too big to fail

aklrunway

Qantas - Qantas Frequent Flyer

Member since 09 May 2011

Total posts 172

Different times back then

StuParr

Virgin Australia - Velocity Rewards

Member since 01 Mar 2012

Total posts 195

Qantas is very much a going concern. PLenty of money in the bank and quite a lot of inherent value.

Great brand, great staff, unfortunately a few things hold them back, which includes underperforming management.

hutch

Member since 07 Oct 2012

Total posts 761

yes last time I heard they had over 2billion in the bank. I wish I had 2billion in the bank when I was having financial issues... but there are some serious issues facing Qantas.

180mis

Qantas - Qantas Frequent Flyer

Member since 20 Mar 2012

Total posts 85

i have a belief that the art of journalism (in the mainstream media) has disappeared..... and that I don't believe most news articles. Case in point - I have a family member who is the Technology Editor of a major mainstream news media publication - yet has no tech training or field experience - but has a degree in journalism ! You be the judge of that!

Do you REALLY think the government would let Qantas (our national carrier) go down? Unlikely! As previous posters (to a separate question a few days ago) have said, if you understand basic accounting and economics, Qantas does not really have a major issue. Yes, they are losing money from their international operations, but overall will be ok.

In my opinion, they are creatively adjusting their accounts so that they can both sway public opinion and also lobby the government to either change the Qantas Act (so that they can level the playing field with Virgin) as Qantas feels they are unfairly restricted by government regulation or otherwise they hope the Aus Government will either invest or guarantee their debt to help them grow for the future.

Either way, it is interesting times ahead. That's my two cents.

aklrunway

Qantas - Qantas Frequent Flyer

Member since 09 May 2011

Total posts 172

Agree wholeheartedly about the media comments

Chrisor

Qantas - Qantas Frequent Flyer

Member since 07 Apr 2013

Total posts 134

I certainly hope not, but negative talk can certainly affect their future. Personally I have already booked several flights for next year in April, May and June and now wonder if I have done the right thing by booking in advance as I normally do.  If we stop booking tickets because of fear of collapse we may in fact cause a problem.

I'm confident that Qantas will survive in some form, there will obviously be some changes along the way, but hopefully they don't sell off the FF program as has been reported.

spudseamus

Member since 25 Feb 2012

Total posts 32

Qantas will survive in some form but AJ should go ! 

reno

Qantas - Qantas Frequent Flyer

Member since 20 Sep 2013

Total posts 316

As a long term plat fflyer i sincerely hope not.But it really depends on what is meant by go under,perhaps it could be a good thing.While i do not support goverment pumping taxpayer money to sustain the airline and or any other private.. industry,as to were does it end.May well the goverment look at potential changes to foreign ownership rules,but should they take the funding route as some suggest it should come with some caveats such as monies not going off shore to initiate, and  further support   J star operations.Monies be spent on the restructuring of domestic and international mainline operations.This can only be by the removal of AJ,and most all of the the top tier management and the entire QF BOARD,to be replaced by experienced local and international heads.

         I suggest this occurs soon rather than latter.May be a new Dixon preposal.

johnaboxall

Virgin Australia - Velocity Rewards

Member since 24 Aug 2011

Total posts 384

It won't go under, but AJ has some very "Dr Evil" kind of plan and isn't afraid to burn bridges to get what he wants. However considering the amount of money the QF group pissed away in Japan, Vietnam, HK and kicking own goals with EK I suspect he is just trying to let the media whip up a frenzy to get the population on his side with the "Australian airline" crap to try and get the Government on board. and keep QFd going. 

And apart from the RAAF the government shouldn't have anything to do with running an airline or any business for that matter. Hopefully the PM and Truss will hold their line and not do a thing for QF, otherwise every f'd up company will come begging for help. 

With the right management that can make some hard decisions the QF group can sort themselves out. 

PLATY

Member since 19 Jan 2012

Total posts 138

I seem to disagree with most of you!

I think there is a chance that QF will go under.

The first concern is essentally based on the observation that the company has gone from a profit to a predicted loss approaching $1 billion. That suggests there are fundamentals which need to be addressed. Significantly, this is a result AFTER securing industrial relations deals, the Emirates deal, supposed recasting of QFi, having already tried and failed to see off the VA competition with over supply of capacity, raked in huge compensation for 787 delays,etc...

No one item would seem to be large enough to explain the disastrous turn around - in other words to make a difference QF would have to completely rethink its fundamental business strategy: selling assets is only buying time and probably weakening the value of the company in the process.

The second concern is that the responses of the federal government cannot be predicted. To make matters more intriguing they are a new government displaying abject incompetence and inconsistency. They fail to support Holden but block international investment of GrainCorp. Abbott is flailing around and Hockey has simply never been that smart (I used to live in his electorate and spend time conversing with him on occasion) and the aviation minister is from the nationals. In any case, despite all the harping by Joyce about foreign ownership limitations, currently QF is reported as only being 40% foreign owned, i.e., less than the allowable 49%.

The third concern is that the fundamental economics may be far worse than that being revealed. The system may be close to collapse with or without a short term funding fillup. The concatentation of lowered confidence , increased interest costs, etc., could create a snow ball effect. The current 800-900 million predicted loss may be revised to a far greater loss.

In conclusion, QF may need a fundamental revision in its strategy to correct the fundamentals. That means Joyce,Clifford and maybe a coterie of managers need to be sacked immediately. This may only happen once the insitutional investors get seriously spooked. QF has already made it clear it needs cash by approaching the government with begging bowl. If the government is disinclined then a sell off of asset, belt tightening and job losses will have to come in the short term - perhaps a shake up of the timetable. A fundamental part of a new strategy may need to be get back to core business and core values, rationalisation between the branding of QF and JQ to re-establish brand demarcation and less inter-airline parasitic competition betwen JQ and QF.

As business and frequent flyers, I propose that at the very least we should expect offers to promote immediate cash flow, thus may win in some regards through sales, double status credit and mileage offers and the like, but should also expect a major devaluation of the FF scheme (finger in the air prediction of 25% increase in points for an award and further upward movement in fuel surcharges within 3 months) so could lose on that front.

One option for the government would be to avoid cash handout (I suspect it will be very reluctant to pay out taxpayers money for a failing business) and call Joyce's bluff by tearing up the Qf Sale Act, thus appear to be doing the very thing QF has asked for without paying cash and throwing all responsibility back on the QF CEO and board, perhaps with caveats about Australian jpobs to satisfy the xenophobic patriot block. That would open the door for Emirates to start the process of either buying into QF, or even subsuming the international operation. One should remember that Joyce had the opportunity to align with BA when he took over and passed that up!

Emirates and others may invest and then just cherry pick (asset sale and asset stripping) - ironically probably what the private equity mob would have done in the Dixon plan.

Emirates may not be interested, leaving the door open to firesale and asset stripping per private equity...cue Dixon's syndicate and perhaps others. At he curent $1 per share the business is very exposed.

Whatever, something significant has to happen in the 3 to 6 months or the airline could be toast.

I'm personally adopting a conservative strategy of making award redemptions on non QF flights and only booking/paying for flights a short time in advance.

This is of course, all just personal opinion and speculation based on what little is available in the public domain..I'm happy to be proved wrong and find it's all a storm in a teacup especially respecting the many professional people who work at the airline.

In the meantime, I find it inconcievable that Joyce and Clifford survive...

 

reno

Qantas - Qantas Frequent Flyer

Member since 20 Sep 2013

Total posts 316

Tronixistuff/Platy thankyou for great and balanced comments.But do you guys and others and may be RBB really think and on going review of operations BY AJ and his crew said to be complete by early 2014 will provide answers.They have completed several prior reviews of operations with the backing of the QF BOARD in recent years with little achieved.Markets will not look kindly to yet another belated review.This current review should be complete by DEC 31,not 2014.

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