Oil doesn't look like dropping yet. Was back to US$116.32 in NY...

Oil doesn't look like dropping yet. Was back to US$116.32 in NY on Friday and those dividends you are referring to were applicable last year and maybe this year. However, next year is a very different story and is why SP has dropped below $3.50 last week.

No doubt you are aware that 100% of this years fuel bill is hedged at US$70. However, only 33% of next year's fuel is hedged at US$90. So say fuel is US$120 on Jan 1 2009 (others expect it to hit US$150) Qantas is looking at an overall increase of about 50% in fuel costs next FY. Without any change to fuel surcharges or ticket prices, there goes your $1B in profit.

Whilst the recently announced price increases will alleviate this it cant come with an impact to demand. At the same time as the worlds' economy is faltering and there is increasing domestic and intl competition.

I think there is more downside here in QAN. There will be good news later this year with possible offshoot floats. Will wait until then.