cavemanzk

I had been looking at flying AKL-SYD-LAX on QF (Way Cheaper than NZ), although after what has come out in the past week. Do you think its still a good option? If they do go bust, I gusset it would take forever to get money back?

DownUnderFlyer

Qantas is sitting on quite a lot of cash at the moment. So chances of them going bust anytime soon are very slim. I would book them without hestiation.

trinitygirl

I really don't see Qantas collapsing in the immediate future - I'm going ahead with bookings.

djpjapan

There is a big difference between posting a loss and going bust. Makes no difference to me at this point

NM

Qantas is not going to stop operations any time soon. I would not hesitate to book with Qantas.

sxc

Even if they do go bust, if you book using a credit card, you can get your fare back via chargeback.

RichardMEL

YES.

Please note QF has *NOT* posted a big loss yet. They released GUIDENCE last week saying they expected a $250m-$300m loss in the first half. Sure, it's a fair indication, and likely it could be worse, but some of the media are saying QF have lost $300m+ already but they've not officially posted that.

Anyway yes I have and will continue to book QF. No fear.

mikalee

Look past the last 13 years. NZ was closer to shutting up shop than QF has been, is currently and ever will be.

No Australian government will let QF suspend services due to financial difficulty in my lifetime and I have 40 years left. They will intervene in the national interest well before then.

og

AN was abandoned by the Australian Government - that was too big to fail.

Is this a case (QF) for having something similar to the USA's Ch 11 protection to look forward to ?

mikalee

True, but VA is no QF as QF was when AN failed. They were operating 50:50 back then with AN really on domestic.

If QF failed the international ops effect wouldn't be that great to the ecomony but at a 65:35 split as it is now the government would have no choice to intervene.

Even as a staunch capitalist I am aware the politics will mean that a right wing government would see it in the national interest to support, or nationalise QF, in an Armageddon scenario which I expect is being planned for in Treasury at present.

Himeno

There wasn't really a lot of notice that AN was about to fail. They had cash problems, but everything seemed to be running normally right until they grounded the airline one morning.

Nope. Nothing like Ch 11 in Australia.

og

My point being the question : is there merit in having something like Ch 11 protection in Australia? Would this be a viable mechanism for allowing bankrupt companies to survive?

Himeno

Maybe. They seem to help in the US and Japan. (anywhere else with similar things?)

Though trying to convince those idiots on capital hill about it is unlikely to happen.

ichindar

There's a big difference between forecasting a loss and going bust, and another big difference between having your credit rating reduced and either of the first two options. No one's seeing QF go bust right now.

mikalee

AN met with PM Howard early in 2001 pleading a case for protection against QF. When it was revealed they were sitting on a cash pile & working capital facilities of $1.5bn Howard immediately switched off and left them too it.

AN did not run out of cash per se - its owner NZ put it in voluntary administration after stripping out a heap of cash and forming the view soon after the business was or was about to be insolvent and decided they no longer would/could support it. They and their current VA partners are happy to continue to support VA though.


Chapter 11 is a poor option - all it does is mask over the problems by forcing creditors to take the hit. At least in Australia when a company enters administration, the creditors who are the ones owed the money supposedly take control under the guise of the administrator to get their debts paid back; if the underlying business is good it will continue to trade at the discretion of the administrator, perhaps be sold, perhaps be restructured. If it is a poor business it will be wound up pretty quickly.

In Chapter 11 the poor businesses continue to trade - look at UA compared to AN. UA still has its problems and creditors will and have continued to prop it up.

AN's creditors only got burnt once.