Qantas secures further AU$550 million in debt funding


The Qantas Group has secured a further AU$550 million in funding against three of its wholly-owned Boeing 787-9 aircraft. This follows the AU$1.05 billion raised in March against seven Boeing 787-9 aircraft.

Net debt is now within the middle of the target range, at AU$5.8 billion. The Group has no financial covenants on any existing or new debt facilities and no significant debt maturities until June 2021.

The Group has sufficient liquidity to respond to a range of recovery scenarios, including one where the current trading conditions persist until at least December 2021. The Group currently has AU$2.7 billion in unencumbered aircraft assets and can raise funds against these if required.

At the start of the crisis, the Group acted quickly to wind down cash burn through employee stand downs, a pause on virtually all capital and operating expenditure, and revised agreements with key suppliers. As a result, and based on current conditions, the Group expects to reach a net cash burn rate of AU$40 million per week by the end of June 2020.

Since the last cash balance update in March, the Group has seen outflows including a AU$250 million bond repayment, elevated levels of annual leave payments from standing down more than 25,000 employees ahead of the JobKeeper program starting, and payment of bills from its pre-crisis levels of flying activity.

As at close of business May 4, 2020, total short-term liquidity stands at AU$3.5 billion, including a AU$1 billion undrawn facility. (US$1.00 = AU$1.55 at time of publication.)

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