Besieged Qantas directors to meet in NY on crisis items

[dajop]

But unfortunately for QF, much of their balance sheet shows debits and credits in US$, so there are lots of swings and roundabouts involved in the final equation.

Yes this is very true, I'd imagine DJ (as the main domestic competitor) have a much lower proportion of their revenue in US$, so in theory JohnK's comments would be more applicable to them. However, QF do have tremendous loyalty (through QFF status scheme and corporate arrangements) that probably allows them some upwards flexibility with fares that DJ would struggle with. So it is really swings and roundabouts.

 

[NM]

Yes this is very true, I'd imagine DJ (as the main domestic competitor) have a much lower proportion of their revenue in US$, so in theory JohnK's comments would be more applicable to them. However, QF do have tremendous loyalty (through QFF status scheme and corporate arrangements) that probably allows them some upwards flexibility with fares that DJ would struggle with. So it is really swings and roundabouts.

Of course its not just revenue that can be in US$. Most new aircraft are purchased in US$ and many leasing contracts are in US$. So the string A$ (or weak US$, depending on how you look at it) will also be affecting QF's outgoings in their favour, especially as they start to pay for lots of new aircraft in what I assume will be US$. Which is why I mentioned the swings and roundabouts.

 

[Flying Fox]

I would have thought that they would currency hedge against the USD.

 

[simongr]

It would depend on corporate policies - some companies see hedging as a form of speculation (i.e. betting that you can get a better deal than you expect the market to move) and intentionally do not hedge.

 

[pauly7]

It would depend on corporate policies - some companies see hedging as a form of speculation (i.e. betting that you can get a better deal than you expect the market to move) and intentionally do not hedge.

Some corporates see it as a way of more accurately forecasting and giving shareholders reliability