April Traffic and Capacity Stats, page-4

Thanks for responses on timing of the capacity stats and also perspectives on the stock.

I'm not so convinced however that all is well and I am also not convinced that if volume were lower than this would result in an early disclosure to the market unless it were severely lower. I say this as I was following FLT with interest. The stock was falling circa 2-3% daily for several days, $40 to circa $34.50 before any announcement was made. It certainly looked like someone knew that profit warning was coming for some.

Just to explain my rationale ... yes, I understand that a weaker AUS does, all other things being equal makes it more attractive for foreign tourists and AUD receipts in local currency are higher due to weaker $. That however assumes that the take up in foreign travelers is enough to offset the lower domestic outward travelers who choose not to go overseas due to cost, lower consumer confidence. Inbound international travelers can choose from many other airlines and are not as loyal to Qantas so I am not so sure it's a net positive. If you look at recent updates from Singapore and others outside of US appears airlines have seen considerable softening in demand. As for the benefit in ticket prices in local currency, well this is a positive but assumes constant ticket prices. As we know ticket prices have fallen considerably creating a big drag on international margins given QAN's aging international fleet.

For me the fact the stock is falling despite the scale of the buy-back is a very strong signal about market sentiment.

For now, I stand by my belief that the stock is heading lower -but only time will tell.