Afex, that Michael West article is six months old. The figures...

Afex, that Michael West article is six months old. The figures may be a little different now. I do respect Michael's articles very much. And I don't watch current affair TV anymore. But I do have some senior airline contacts.

If you were playing about with a plain old debt-to-equity ratio, you could get to 140 per cent, or roughly 170 per cent when adding in the off-balance-sheet stuff.

Its pretty desperate when a company pins its viability on how long its cash reserves will last. Qantas has long been very clever at the way in which it accounting system works. Think of a number. As I pointed out a month or so ago, and the article points out, Qantas current ratio is less than one. While calling of all debt is very unlikely, the fact is that a CR of less than one means the company exists only with the acquiescence of its lenders. If they get nervous, Qantas does not hold any cards.
A CR of less than one is not an issue with profitable companies, but it becomes a very big one when the company is not profitable. The risk for lenders spikes.

Obviously it's in an uptrend
For the last few days, hope it continues.

History is not on Qantas side. When parties argue and refuse to face the problems head on, the usual outcome is sudden. The present stand-off inertia and point-scoring is the most irresponsible action I have ever seen in a very long history of company observation. Nobody is taking any responsibility at all.

To the parties, politicians, unions, Board, CEO, I would say; "Guys, wake up, do something constructive, now, otherwise we will wake up one morning and Qantas will be gone. It won't happen gradually."

As for the buying by Franklin, they may be anticipating a break-up value, or this; Very recently one of the world's biggest and most successful fund managers bought a 5% stake in a big miner. Within a day or so they formally announced that they had on-lent their 5% stake for shorting.