Fight, flight or fright for Qantas?
By
Ticky Fullerton
Updated June 14, 2012 07:51:54
Photo: Qantas has weathered fuel prices, SARS, terrorism and a recalcitrant Australian dollar, but is the end nigh? (Tim Wimborne: Reuters) (Tim Wimborne: Reuters)
Surely this has to be Alan Joyce's annus horribilis? Shares in the flying kangaroo hopped under a dollar on Friday before being saved by 'vulture thinking' of a potential takeover.
A major restructure announced in August last year flagging a thousand job cuts and two new Asian carriers, was within a few weeks overshadowed by an unprecedented grounding of Qantas flights worldwide. Then in May another restructure, this time more cosmetic, perhaps to reveal more clearly to the market (and the unions) just how much of a dead weight Qantas International had become. That reality emerged just two weeks later: a downgrade revealing a 90 per cent drop in annual profit for the Group with the international division to lose $450 million. And so finally, a 34 per cent skydive in the share price.
The massive expansion of particularly sovereign backed Middle Eastern airlines has meant that today, just 18.7 per cent of passengers travel in and out of Australia on a Qantas plane. And a Chinese onslaught is only just beginning: China Southern being the latest, last week announcing its new London Guangzhou Sydney flight, the Canton route, in direct competition to the Kangaroo route. Meanwhile, there's not a word more from Qantas on the premium hub that might be developed in Asia.
Full article:
Fight, flight or fright for Qantas? - The Drum (Australian Broadcasting Corporation)