South Pac Share and Oil Price Weekly Update

Each week the Blue Swan Daily brings you a snap shot of the key share and oil prices related to all things travel and aviation.

Monthly Share Price Snapshot:

Source: ASK (Prices in AUD)

Key news stories of the week

Virgin Australia

Virgin Australia Group attributed (29-Aug-2018) its AUD653.3 million (USD479.8 million) statutory loss to the following adjustments:

  • 7 million (USD420.6 million) in non-cash accounting adjustments:
    • 9 million (USD331.9 million) derecognition of Deferred Tax Asset;
    • 8 million (USD88.7 million) in VA International asset impairment.

The carrier also booked AUD148.5 million (USD109.1 million) in restructuring costs and AUD48.1 million (USD35.3 million) in losses related to time value movements and cash flow hedges. Virgin Australia Group stated it has “taken a prudent approach” to these accounting adjustments as it pursues growth initiatives in the Asian aviation and loyalty markets, and in light of fuel price increases. Virgin Australia stated that while these adjustments have impacted the statutory result, they are non-cash and have no impact on the fundamentals of the Group’s underlying business. In addition the tax losses remain available to the group to offset future tax liabilities.

Qantas Airways

Qantas chairman Leigh Clifford announced (30-Aug-2018) the intention to appoint Tony Tyler as a non executive director to the board. Mr Tyler has held a series of senior aviation management roles, including CEO of Cathay Pacific and director general of IATA. Mr Tyler will formally join the board in Oct-2018 subject to a shareholder vote on his appointment.

Qantas also reported (30-Aug-2018) it will put forward two resolutions, sponsored by the Australian Centre for Corporate Responsibility, for consideration by shareholders at its annual general meeting to be held on 26-Oct-2018:

  • Constitution addition: Proposed new clause for the Qantas constitution, requiring resolutions made about the way a power partially or exclusively vested in the directors has been or should be exercised to be of “material relevance to the company or the company’s business as identified by the company, and cannot either advocate action which would violate any law or relate to any personal claim or grievance”;
  • Human Rights Due Diligence request. Qantas shareholders have requested:
    • Qantas board commit to engaging a heightened due diligence process in relation to any “involuntary transportation activity” it is involved in as a service provider to the Australian Department of Home Affairs;
    • Qantas board commission a comprehensive review of policies and processes relating to involuntary transportation, with a specific focus on risk and responsibility according with Qantas’ commitment to aligning its business with the UN Guiding Principles on Business and Human Rights;
    • Qantas board a report describing the completed review, to be made available to shareholders prior to any further involvement in removal or involuntary transportation activity as a service provider to the Australian Department of Home Affairs.

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