Qantas 2010 Annual Report Download - page 86

THE QANTAS GROUP 84
for the year ended 30 June 2010
Notes to the Financial Statements continued
(C) CAPITAL EXPENDITURE COMMITMENTS
Qantas Group
2010
$M
2009
$M
Capital expenditure commitments contracted but not provided for in the Financial Statements
Aircraft 14,505 16,591
Building works 95 103
Other 228 96
14,828 16,790
Payable:
Not later than one year 2,553 1,560
Later than one year but not later than  ve years 9,854 10,135
Later than  ve years 2,421 5,095
Total capital expenditure commitments contracted but not provided for in the Financial Statements 14,828 16,790
The above amounts exclude uncommitted aircraft purchase payments that may be made if cancellable aircraft options are exercised. The Qantas Group
has a number of slide rights available on committed aircraft capital expenditure that are generally exercisable 24 months prior to contracted delivery.
29. Contingent Liabilities
Details of contingent liabilities are set out below. The Directors are of the opinion that provisions are not required with respect to these matters,
as it is not probable that a future sacri ce of economic bene ts will be required or the amount is not capable of reliable measurement.
Qantas Group
2010
$M
2009
$M
Performance guarantees and letters of comfort to support operating lease commitments and other arrangements
entered into with other parties
56
General guarantees in the normal course of business 172 161
Contingent liabilities relating to current and threatened litigation 3 3
180 170
AIRCRAFT FINANCING
As part of the  nancing arrangements for the acquisition of aircraft, the Qantas Group has provided certain guarantees and indemnities to various
lenders and equity participants in leveraged lease transactions. In certain circumstances, including the insolvency of major international banks and
other AAA rated counterparties, the Qantas Group may be required to make payments under these guarantees.
FREIGHT INVESTIGATIONS AND THIRD PARTY ACTIONS
Qantas continues to co-operate with regulators in their investigations into alleged price  xing in the air cargo market. These investigations revealed
that the practice adopted by Qantas Freight and the cargo industry generally to  x and impose fuel surcharges breached certain competition laws.
In addition to investigations by regulators for breaches of relevant competition laws, third party class actions have commenced against Qantas (as well
as other airlines) in Australia and the United States. Qantas has also been threatened with third party actions in other jurisdictions. Qantas has a
number of defences to these actions.
As at 30 June 2010, Qantas has provided $31 million (2009: $30 million). This provision re ects Management’s best estimate of potential penalties,
settlements and costs in Europe, New Zealand and other jurisdictions. However, Management’s current view may change as a result of future
developments. Qantas expects the outcome of these outstanding regulatory investigations and third party actions will be known over the course of
the next few years.
TRAVEL AGENT LITIGATION
A class action claim was made against Qantas and other airlines by a number of travel agents as a result of travel agents not being paid commission
on fuel surcharges. Qantas was successful in the initial action heard in the Federal Court, but was unsuccessful on appeal to the full Federal Court.
Qantas continues to dispute this claim and has sought leave to appeal to the High Court of Australia which will be heard on 3 September 2010.
28. Commitments continued