The word 'basketcase' does not begin to describe Qantas

We don't have a government-owned airline, but we have a private one that gets the privileges as though it were government-owned, even though it was privatised by the Hawke/Keating government between 1992 and 1995.

However, the financial mechanics aren't necessarily that good. When you buy an airline, you buy a position on the price of oil. Somewhere around 30 percent of airline expenses are made up of fuel. When your profit margin is somewhere around five percent in a good year, fluctuations in fuel costs can wipe it out or magnify it.

Qantas's share price at $6.03 is up about 20 percent this year but still below the December 2019 price of $7.39 (Dec. 19, 2019), which could reflect a rational decision by shareholders that future fuel costs are likely to rise and eat into the profit.

They also understand that Qantas has underinvested in aircraft, with the average age of the fleet now being 15 years (pdf).

To put that in perspective, the average age of the Australian motor vehicle is 10 years.

My own car is 16 years old, and to replace it with a new car, I would need to spend eight to nine times its current value.

I'm ready for the financial shock. Seems like the shareholders of Qantas might be too.

It's an old trick to boost profits, share prices, and executive incentives by running down the capital of a company to boost the bottom line.

Mr. Joyce's successor, Vanessa Hudson, is going to have to find $14.6 billion to replenish the fleet.

"Chainsaw" Al Dunlap made himself famous and rich in the late 20th century by boosting profits at the cost of maintaining assets to a number of companies that later fell, or almost fell, to pieces.

Does flying have a future in Net Zero

The other problem for Qantas, and all other airlines, is net zero and the federal government's National Energy Guarantee (mirrored in a lot of overseas countries).

What our Guarantee demands is that by 2030, the largest 215 Australian companies will have dropped CO2 emissions by 30 percent.