QAN financial and non-financial news

Another article showing the importance of knowing what you need to look for. Qantas' recent earnings announcement - Michael Pascoe goes behind the Income Statement.

Here's the start:

The passenger figures Qantas released to the stock exchange yesterday weren't flash - but the unannounced financial reality was much, much worse.
While Qantas told the ASX its May Qantas International and Jetstar International revenue seat factors were up 4 and 4.8 percentage points respectively, it didn't say that its yield on the combined international business had collapsed by 25 per cent.

Understanding how QAN makes its money is the starting point.

Qantas

Just a bit more on the Qantas private equity bid. Given the recent profit upgrades, any shareholders who did sell out on the advice of the Qantas board have the right to feel aggrieved. Perhaps legally so. I wouldn't be surprised to see a class action commenced over this. John Durie comments here.

The value in Qantas...

The Herald is right: if the Chairman and board of Qantas didn't realise what the company was worth until the private-equity bid, then you really have to ask what on earth they are doing? Again, this highlights the trouble with leveraged buy-outs where the incumbent management team isn't going to be replaced. That is, there is an obviously conflict of interest that the managers face between 1) obtaining maximum value for the shareholders and 2) being able to buy the company cheaply to make more personal profits when the company is subsequently sold back to the public.

Qantas strategy update

Speculation that Qantas will announce a significant change of corporate strategy at their upcoming annual general meeting. I'm sure this will be followed by claims that they are simply responding to the strategy that was proposed by the private equity team that was bidding for Qantas. Note the competing interests of the capital and the product markets here. The capital market wants to know as much as possible about QAN's future plans and strategies, so that it can best guess at how QAN will perform going forward (i.e., so that they can price the equity and debt of QAN). On the other hand, QAN's competitors also get to see what the major player (in the domestic industry in any case) is planning. Competitors may need to adjust their own strategy in response. This is an example of the "proprietary" costs of disclosure - you are giving away (potentially) valuable information to your competitors.