The case for QANTAS needing a Gov Bailout or passing the hat...

The case for QANTAS needing a Gov Bailout or passing the hat around for cash vs being able to ride out this scenario largely comes down to several factors including:

1. Vaccine for the virus being developed and commercially available
2. New rates of infection either stabilising and/or dropping significantly
3. QANTAS being able to renegotiate leasing arrangements with domestic airport authorities
4. Ongoing revenues generated from FF referral partners

I think points 3 and 4 are particularly interesting (the other two are variables which QANTAS has little control over).

Obviously commercial landlords are going to be asked by 1000's of tenants to take a haircut in coming weeks....I mean, good luck finding a tenant willing to pay market prices in this climate, so many landlords will have to bend over (unless they simply want to own a vacant property for X months).

I'm not sure what degree of leverage QAN has in negotiating leasing agreements with Airport bodies, ie Sydney or Melbourne Airport in particular, but a temporary renegotiating of these terms, as well as temporarily slashing marketing budgets (and their workforce which they've already done), will be key to seeing them through this situation.

Another key point to note that no one in this thread has mentioned is that QAN generates very significant revenues through their FF (Frequent Flyer) program referral partners. Ie, I personally switched health insurer last year from Aus Unity to NIB (white labelled under the name Qantas Health Insurance), in order to gain the FF points bonuses, and I'm sure thousands of other FF members would have done likewise in recent times. The QANTAS Health App is also terrific, and a good way to earn points on an ongoing basis.

I know they've had long established relationships with major credit card providers where they earn out significant fees for ongoing referrals, and in this climate, I actually wouldn't be surprised to see uptake of new credit cards actually increase as business owners look to secure new lines of credit to prepare for the pending downturn. Similar with health insurance...I'm not entirely clear on the per referral revenue metrics QAN earns for referring new customers to NIB in exchange for QAN points, but I'm guessing it's significant.

Also worth mentioning, there is a high degree of loyalty amongst QANTAS FF members, and even if they can't fly in the next 6-12 months, I don't see that being a significant deterrant from them still wanting to try and accumulate points.

Keen to hear some comments from someone who has a higher degree of granular insight into revenues generated from FF referral programs.

Cheers