Ok had a bit more time to look at the market (ASX) releases. It really strikes me as "take the medicine now" (with large operating loss this year anyway, wipe out some "structural" asset value costs (ie. write down the optimistic valuations of aircraft) in order to reduce costs in subsequent years). The "positive" initial market reaction is actually good news that investors think they may finally be "righting" the ship. Frankly, some of this should have been done years ago.
Some interesting tidbits (to me anyway):
- $566 million of yield and load factor decline from market capacity growth running ahead of demand
I think they clearly got caught out throwing capacity at the 65% line and then demand froze (budget, election etc etc)
- a large number of the "responses" are already announced but yet to show an impact
eg. Aircraft utilisation increases, staff layoffs (and associated costs bourne this FY but costs of carrying those staff will be permanently gone in subsequent FYs to try and improve annual profit)
- they worked out they were crazy if they spun off QFF
- restructure into 4 "arms" not unexpected in an effort to "match" VAH's structure
- well done keeping QFd profitable!
- in the summary of group revenue / expenses / pax carried you can clearly see they've basically gone sideways over 12 months
- JQ asia lost 40m, JQ japan -70m (which they try to appear to "include" JQ costs associated with JQ HK) - I'm not unsurprised they dont want to admit how much JQ HK is costing them.....
- 2200/5000 FTE gone --> cost $430m
- Debt/equity (gearing) goes from 46:54 to 62:38
- fleet changes were largely announced previously, but all seem like sound strategies - again why wasnt some of this done years ago?
All in all, very interesting, and I cant actually help but think maybe they are finally getting their house in order! Maybe after a year or two of stabilisation, they can look to grow QFi again.