We live in the world of Central Bank free money, bail-outs and moral hazard Tony. There is no risk anymore hadn't you heard? And you are certainly not allowed to discuss risk associated with one of the most significant Australian companies in existence on Hot Copper.
Until the risks are all too real it seems....Phillipines national airline has gone into bankruptcy. That's bankruptcy @mayo1975 - not negative equity - they've actually filed.
Lets have a little look who else:
Flybe (UK) Files for Bankruptcy 3/2020 Trans States (U.S.) Ceased Operations 4/2020 Compass (U.S.) Ceased Operations 4/2020 CityJet (Ireland) Files for Bankruptcy 4/2020 Virgin Austraila Files for Bankruptcy 4/2020 Air Mauritius Files for Bankruptcy 4/2020 Avianca (Colombia) Files for Bankruptcy 5/2020 Thai Airways Files for Bankruptcy 9/2020 TAME (Ecuador) LIquidation 5/2020 LATAM (Chile) Files for Bankruptcy 5/2020 SunExpress Deustchland Announces Ceasing Operations 6/2020 One Airlines (Chile) Ceased Operations 6/2020 NokScoot (Thaiand) Ceases Operations 6/2020 LIAT (Antigua) Ceases Most Operations 6/2020 Jet Time (Denmark) Files for Bankruptcy 7/2020 Virgin Atlantic (UK) Files for Bankruptcy 8/2020 Air Asia Japan Ceases Operations 10/2020 Cathay Dragon (Hong Kong) Ceases Operations 10/2020 Ravn Air (U.S.) Files for Bankruptcy 10/2020 Norwegian Air Files for Bankruptcy 11/2020 InterJet (Mexico) Files for Bankruptcy 4/2021 Philippine Airlines Files for Bankruptcy 9/2021
(some big boys in there)
Just to be very clear, I don't personally think Qantas will go bankrupt anytime soon. I do struggle to see it becoming free cash flow positive before 2023 and believe it will need to raise capital and/or issue more debt. The latter it may struggle to do at such favourable rates when the Chinese housing glut gathers steam and yields rise with inflation that is clearly not transitory, as Central Banks are forced to taper and even raise rates and too many airlines scramble for a piece of the same debt pie, as already being seen in US and Europe:
(20min delay)