Dear Old Breathless Robert Gottliebsen.........Words fail me.
Hooray for Lindsay Fox! I hope he sells Linfox to Qantas for zillions! perhaps he can then do a Packer-like buyback of both Qantas and Linfox in a few years time after GD & Co. screw it up.
Rail is not air transport. Road transport is not air transport. Sea transport is not air transport. There are extremely limited synergies between air transport and anything else, unless Qantas has plans to fly aircraft that can carry sixty foot, forty tonne shipping containers.
I was once questioned very severely about airline operations a very long time ago by the founders of Toll. For various reasons, they chose not to start their own. I've also worked with Linfox on a project or two. I have the deepest respect for the intelligence and integrity of the management and professionalism of both companies.
I also remember a very detailed briefing by McKinsey's about why companies succeed and others fail that has informed my share buying ever since.
Basically what happens when companies straddle a number of different industries is that over time the Board is required to decide on competing investment priorities from within the group, and they invariably get it wrong, because they cannot focus enough on the components of the group to get the governance right. In other words, they ask the wrong questions of the various CEO's.
If you want an example, look at BHP's purchase of Magma Copper. The "Old " BHP was across steel production, non ferrous metals (gold, copper etc.), coal mining, iron ore mining and sales as well as oil and gas. They eventually had to chop it up for the reason I enumerated. The whole was much less than the sum of its parts.
Another good example is Jetstar Asia.
I am waiting for the release of the document that says how Qantas is going to "leverage all the synergies and the economies of scale".
Watch the share price fall as the wiser heads run for the exits.