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Notes to the Financial Statements continued
For the year ended 30 June 2016
22 COMMITMENTS CONTINUED
(B) OPERATING LEASE COMMITMENTS
2016
$M
2015
$M
AS LESSEE
Non-cancellable operating lease commitments (not included in the Consolidated
Financial Statements)
Aircraft and engines – payable:
Not later than one year 366 469
Later than one year but not later than five years 952 802
Later than five years 187 88
Total aircraft and engines 1,505 1,359
Non-aircraft – payable:
Not later than one year 188 175
Later than one year but not later than five years 503 521
Later than five years but not later than 10 years 320 332
Later than 10 years 367 398
Less: provision for potential under-recovery of rentals on unused premises available for sub-lease
(included in onerous contract provision) (2) (3)
Total non-aircraft 1,376 1,423
Total non-cancellable operating lease commitments 2,881 2,782
23 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 sacrifice of economic benefits will be required or the amount is not capable of
reliable measurement.
(A) GUARANTEES
Qantas has entered into guarantees in the normal course of business to secure a self-insurance licence under the
Safety,
Rehabilitation and Compensation Act 1988
, the New South Wales Workers’ Compensation Act, the Victorian Accident Compensation
Act and the Queensland Workers’ Compensation Act and Rehabilitation Act, to support non-aircraft operating lease commitments
and other arrangements entered into with third parties. Due to specific self-insurance provisions raised, the Directors are of the
opinion that the probability of having to make a payment under these guarantees is remote.
(B) AIRCRAFT FINANCING
As part of the financing 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 counterparties that have a minimum credit rating of A-/A3, the Qantas Group
maybe required to make payment under these guarantees.
(C) LITIGATION
i. Freight and Passenger Third Party Class Actions
Qantas is a party to a number of third party class actions relating to its freight and passenger divisions. Qantas continues to have a
number of defences to these class actions. Qantas expects the outcomes of these class actions will be known over the course of the
next few years.
ii. Other Claims and Litigation
F
rom time to time, Qantas is subject to claims and litigation during the normal course of business. The Directors have given consideratio
n
to such matters, which are or may be subject to litigation at year end and, subject to specific provisions raised, are of the opinion that
no material contingent liability exists.
82
QANTAS ANNUAL REPORT 2016