by mickjoebill; Acquire another airline to make the economies of scale work?
Hard to argue on face value until you consider the "symptom of the cause," QI was deliberately run down in favour of the Jetstar model.. Dixon started it, but AJ has been there long enough to do something about it, it is my view he accelerated the decline of QI under his watch.
Clearly Oz wages are not competitive, so servicing aircraft from other airlines doesn't stack up?
The Oz dollar is down roughly 10% since the closure of Avalon was first hinted..
The Dixon, Joyce, Jackson & Clifford combo has left QI with not enough suitable new airframes for it to have any chance of competing. Basically QI has been destroyed and urgently needs a new management team before it's too late, in my humble opinion. Another six months of this management team I fear not even superman will be able to reverse the decline. Clifford's dogged support for the strategy has also added to the mess we now see the Qantas group in. His airline experience is limited to Qantas as are some members on the board, clueless, otherwise Qantas would not be in the mess we see it in today. The board is responsible and the Abbott government so far are letting them off the hook, again my view only. here
http://youtu.be/cWgyIyJAVnc
MC's wonderful post above explains things much better I can..
There is something else going on though... I think the Elizabeth Knight is on to it,
Qantas mystery as one shareholder sells, the other buys
A year ago Qantas had two large shareholders - Franklin Resources and Capital Group. But these two giants of the global investment market have clearly taken different views on the prospects for the Australian national carrier. Franklin has virtually doubled its shareholding over the past year (accelerating this trend over the past couple of months) while Capital has almost halved its investment.
Capital's decision to sell down appears to be the correct strategy given the trajectory of Qantas' share price - which has fallen 40 per cent since last March.
What is more curious is why Franklin - and in particular its Australian associate, Balanced Equity Management - has taken the view that there was some hidden upside in Qantas that the rest of the market hadn't recognised.
Perhaps Franklin took the view that the government guarantee of Qantas' debt was a bagged deal. Or perhaps it thought Qantas was likely to float its frequent-flyer business - either of these outcomes would have provided some positive momentum to Qantas' share price.
Its worth noting that despite comments by Treasurer Joe Hockey a few weeks ago that the debt guarantee was being actively considered and Qantas might be a ''special case'' when it came to government help, Virgin boss John Borghetti said that in his conversations with numerous ministers he was not given the impression the help was a ''done deal''.
Had the government suggested this was the likely outcome he would not have wasted time on conversations with Canberra.
The part-sale of Qantas' Frequent Flyer was a possibility floated by the company at the end of last year, but did not form part of the strategic change agenda outlined by Qantas last week. Instead, Qantas confirmed the sale of its Brisbane terminal and the sacking of 5000 positions - without any information on where these cuts could come from. And analysts are now questioning how Qantas will be able to cut $2 billion from its costs based on the information it has outlined to date. Had Qantas tackled the revenue issues, maybe the market would have been more assuaged.
The potential lifting of the foreign investment restrictions in the Qantas Sale Act are near-impossible to get through the Senate and are at best a poor third prize for Qantas. And more significantly the rhetoric from Alan Joyce on Wednesday in his speech to the Australia Israel Chamber of Commerce was that Qantas would not budge from the market share-induced capacity war and the 65 per cent line in the sand was safe under his stewardship.
He said he had the support of shareholders and the board.
Now all the major business writers are showing signs of digging deeper than ever before which is not before time...
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