Ann: Qantas Group HY21 Investor Presentations, page-2

QAN's domestic seat occupancy was only 58.1 per cent in 1H 21, down from the usual expected level (pre-COVID-19) of c.85 per cent or higher.

It has a plan to (possibly?) extend the life of aircraft from c.20 years to c.24-25 years with engine renewals. This risks the assertion from passengers that they'll fly around in 'clunkers', even if we know that throughout their lives, many items of transport equipment have parts renewed. It may also be costly in additional fuel costs (and emissions for the climate change alarmists out there).

QAN domestic flights incurred an underlying $337 million loss, Jetstar (domestic and international) $328 million and despite freight flights, QAN international was down $291 million.

The company has consistently been over-optimistic in its projections as to when travel demand would pick up or flights resume, so today has had to announce cancellation of its international flights between 1 July and 31 October 2021. Refunds will be again a cost QAN didn't factor in.

Domestically, a takeout comment was that while QAN says demand for flights in the sources and government sectors is OK, others are subdued. This suggests that private enterprise has found a great way to save money through using WebEx/Zoom instead of having managers and staff fly around the nation and stay overnight in five star hotels - some may call this the (at least partial) end to 'junkets'.

Unrealistic for QAN to expect domestic travel demand to rise back to 80 per cent soon. So many have got out of the habit of flying.

This is one of QAN's biggest challenges given its huge fixed costs and how idle aircraft can't be easily sold, or sold for a high price, to other airlines that face similar problems.

Net debt at $6.5 billion is above the target range of $4.5 to $5.6 billion. If I read the presentation correctly, more than $900 million of debt is due for renegotiation in FY 2022, so it remains to be seen if USA Federal Reserve Chairman Jerome Powell's insistence that interest rates will stay low turns out to be reality.

QAN comments that 'traditional booking windows - passengers booking in advance - and lead times have evaporated.' This to me means QAN's ability to set fares at higher levels over time will reduce, because if aircraft are empty closer to departure date than pre-COVID-19, there's a need to discount to fill seats.

The variation between flying demand domestically has been 18 times between lowest and highest weeks. QAN can thank politicians like Daniel Andrews in Victoria, Mark McGowan in WA and Annastacia Palaszczuk in Queensland for this. All are trigger-happy with lockdowns that are ineffective, cost the economy including QAN hugely and cost jobs.

It's a sobering outlook.