MERGED: Alan's still not happy......

[FYSTI]

One has to wonder what the information the good Senator and Borghetti have in their back pockets?

Xenophon calls for forensic review of Qantas accounts

Xenophon calls for forensic review of Qantas accounts

Ben Sandilands | Nov 28, 2013 1:00PM | EMAIL | PRINT


For the first time in the Qantas v Virgins and evil foreign backers hysteria that is pushing China and Indonesia tensions off the top of news pages a political figure has taken aim at alleged self harm by Qantas management.
This is independent SA Senator, Nick Xenophon’s detailed statement.

• Call for Qantas CEO and Chairman to quit
• 35,000 jobs at stake – Government must act to prevent break-up of national icon

Independent Senator for South Australia, Nick Xenophon, has called on the Government to “forensically examine” Qantas’ latest claims and then act in accordance with the national interest.
In 2011, Senator Xenophon introduced legislation to strengthen the Qantas Sale Act to prevent offshoring of jobs and the dilution of the Qantas brand via overseas-based subsidiaries. The ALP and Coalition both opposed the proposed changes.
Qantas has been lobbying the Australian Government over the proposed $350 million capital-raising by Virgin, which will effectively see that airline being over 70 per cent controlled by foreign interests, as well as having cheap access to funds.
“Qantas is right to say there’s an unlevel playing field over the proposed Virgin deal, but Qantas has other problems that directly relate to their own decisions,” Nick said.
Senator Xenophon was scathing of the “cannibalisation” of Qantas by its offshoot Jetstar, in particular “the apparent black hole that is Jetstar’s Asian experiment”.
He also singled out Alan Joyce’s decision to ground Qantas on October 29 2011, during an industrial dispute, which cost the airline upwards of $200 million.
Senator Xenophon said that abandoning the safeguards of the Qantas Sale Act would be a “massive mistake that would put at risk not only a national icon, but tens of thousands of jobs”.
“Since Mr Joyce commenced his term on 28 November 2008, there has been no clear long term, consistent strategy for the airline, and his Chairman Mr Clifford must share responsibility for this haphazard approach as well,” Nick said. “They both need to go to give Qantas clear air.”
“Before the Government considers any action on Qantas, it needs to examine Qantas’ books forensically to determine if there’s been any cost-shifting between Qantas and Jetstar,” Nick said.
Senator Xenophon said the economic and social impacts of losing Qantas to foreign or private equity interests would be enormous. He called on the Federal Government to:

• Delay the Virgin capital raising, pending an examination of Qantas’ claims;
• Examine all policy settings that impact on Qantas, especially the operation of foreign state-backed carriers, including the more the more generous depreciation allowance overseas; and
• Examine price-capping of Australian airport charges, which are amongst some of the highest in the world.

In the interests of the thoughtful national debate which all sides of politics seem to support, even without forensic accountants, this observer’s comment is that freezing the Virgin Australia capital injection for any period of time would play right into Qantas hands, and possibly destroy the Virgin competition, and inflict deep harm on the South Australian and national economy.

Virgin Australia adds to calls for Qantas scrutiny

Virgin Australia adds to calls for Qantas scrutiny

Ben Sandilands Nov 28, 2013 4:39PM

Virgin Australia has joined the calls for a much closer look at the underlying factors in Qantas calling for actions to curb its $350 million capital raising.
It’s a very short statement:

Over the last three years, Virgin Australia has had a consistent strategy of bringing strong competition to all key market segments, including the corporate, government, regional, leisure and budget segments.
We have made significant progress in this regard, despite our major competitor’s publically-stated strategy of maintaining a 65 per cent share of the Australian domestic aviation market at all costs. Virgin Australia believes that a level playing field should include a full and proper investigation of our major competitor’s 65 per cent “line in the sand” policy.
Virgin Australia is a publically listed company and it fully complies with all its legal obligations. Virgin Australia’s recently announced Entitlement Offer is designed to raise funds, which is something that any publically listed company can do.
As an ASX-listed company, our aim is to create a long-term sustainable and profitable business, for the benefit of our shareholders, our 9,500 employees, our customers and ultimately for the Australian economy.
The Qantas Sale Act is a matter between the Government and Qantas.

However the sting is in the call for a close look at the 65% line-in-the-sand fetish in the Qantas group.
On its own words, Qantas used that ‘line’ as the rationale for adding excessive capacity on routes where the Virgin Australia competion had been doing the most damage, with the intention of driving it into loss.
However the tactic has also severely impacted the Qantas performance, and been a major factor in driving down the QAN share price, which in turn has arguably seriously impacted the Qantas capability of seeking its own capital raisings to counter the ‘generosity’ of Air New Zealand, Etihad and Singapore Airlines.
Virgin’s statement seems crafted to make politicians and Qantas shareholders the same question:
Should the government bail out or partially renationalise Qantas to save it from its own mistakes?