Qantas has ample liquidity to see it through several years of disruption caused by the COVID-19 pandemic. But its equity investors are faring a lot worse than those who lent money to the airline.
With the benefit of hindsight it is clear the banks that provided Qantas with $1.75 billion in emergency debt in June were a lot smarter than the institutional and retail investors that provided $1.36 billion in equity.
The debt investors have the benefit of receiving interest of about 2.75 per cent per annum. From the moment they stumped up the money, their return on capital was obvious and their capital was secured against Qantas aircraft.
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Tony Boyd is the former Chanticleer columnist. He has more than 35 years' experience as a finance journalist. Connect with Tony on Twitter. Email Tony at tony.boyd@afr.com
