- Dec 6, 2004
I saw a report last week where Moody's outlook for Qantas was not good either (report here). Perhaps Geoff should think about retiring sooner rather than later.smh.com.au said:Value of Qantas air fleet in doubt
July 10, 2006
The price of oil may not be Qantas's only major financial headache at the moment. A broker has raised concerns that the airline could be forced to massively write down the value of its fleet of 213 aircraft.
Qantas has provided no valuation of its aircraft in its 2005 report but Macquarie analyst Paul Huxford estimates the gap could be about $3 billion, given the rise in the Australian dollar.
"The justification for the higher carrying value was supported by 'in-use valuation'," Mr Huxford said in a note. "However, over the longer term, it is possible that the carrying value of the aircraft could be reduced."
Mr Huxford said "it might not be unrealistic to suggest that as a result of changing market conditions for oil and [foreign exchange] rates over the medium term" that Qantas could accelerate the depreciation of its aircraft or opt for a massive write-down.
The airline could have an even tougher time justifying the book value of its planes, given Qantas has a much older and less fuel efficient fleet than many of its competitors such as Virgin Blue, Singapore Airlines and Emirates.
Mr Huxford was the first analyst to predict the massive non-cash write-down in Qantas's frequent-flyer scheme last year.