Could I be forgiven for thinking that Qantas has been deliberately "managed" into becoming a perfect morsel for private equity to purchase?
All the boxes Romulus mentions are ticked:
1: Is it a strong brand?
2: Does it have a lot of assets that can be sold (and leased back if need be)?
3: Can it sustain a lot more debt allowing funds to be taken out?
4: Is it experiencing an "image" problem with investors?
5: Does it appear to be badly managed so a "we will supply strong management" line will win over shareholders?
6: Is there an obvious exit strategy available via a trade sale, refloating or somesuch?
As I have said repeatedly before, all the Qantas problems are of its own making and are easily fixed.
I don't buy the line that Qantas International is "unprofitable" given the constant allegations of dodgy cost allocations from Jetstar to International.
I don't buy the line that Jetstar is "profitable".
The Qantas employee relations strategy is a disgrace - easily fixed.
The fleet problems can be solved - easily fixed, just go to Boeing like Ansett did around 1977 and ask for a complete makeover.
The U.S. Thirty year Treasury Bond rate is 2.57% today. Qantas can load up with cheap debt tomorrow - because its a strong brand and it has the Australian domestic market - and both sides of Parliament for the forseeable future - by the balls. Easy money.
Qantas management is bloated with multiple layers, including a "Group General Manager" level. - Easily fixed.
* Once Qantas is taken private, simply roll Jetstar and all the other "departments" back into one Airline - Qantas. Jetstar has served its purpose - Virgin has now moved up market.
* End the loss making foreign Jetstar programs - they just irritate Asian players, consume too much management time and attention and will never make money.
* Since the business is now private, no one needs to know about the cross subsidies Jetstar was receiving, nor the real state of profitability of the entire airline.
Polish the entire airline up with new lean management and a new lean management structure, buy off the unions, load it up with cheap debt, produce a credible fleet renewal plan and business plan and Voila!
......Qantas II. Refloat and walk away with billions.
Leaving the Australian general population still thirsting for decent cheap direct flights to the destination of choice.