The Qantas Sale Act

[forgetabowdit]

There has been a few theories that the intent of the now laughable and nonetheless concerning antics being employed by management levels at the Qantas Group are being executed in an effort to bypass the Qantas Sale Act.

I wonder if someone with some knowledge on the limitations of the Act could make comment on exactly how plausible this theory is and in turn explain what parameters exist to be considered exempt from the Act. I imagine the wording may well be grey and could be twisted a little to show the airline has no future than to be privatised and restructured - but can someone explain the specifics of it?

I had previously not considered it likely, yet something is just not right with the intent of the people at all senior levels in that organisation...

There are areas of the group that must be simply miserable to work in and other areas that may well not be too far off...

Brave new world heh...

Forgetabowdit

[packrat]

They are trying to destroy Qantas and get the sale act rescinded.

When that happens they will take Qantas private.

After that watch the airline stage a "simply amazing" turnaround, but of course since it will then be a private company, you won't get to find out.....

If you want to understand how business works in this country, look no further than Crown (Packer) today hiring Karl Bitar, former secretary of the Labor party.

[packrat]

I have kept all my company allocated shares.If Q is taken private am I able to keep them?

[fishers.ghost]

There was previous discussion on PPrune regarding this topic.
Trying to find it

[1a sound asleep]

I have kept all my company allocated shares.If Q is taken private am I able to keep them?

NO

I was so against the buyout of QF when it was on the cards. Seeing the mess its in I wish they had given me the $7 shares, let the thing go belly up and collapse. The Govt could have used the $$$ they got from the initial share sale and started Qantas II.

I blame Dixon for 95% of the woes. Mainly keeping to an old 744 fleet and not following the likes of SQ and EK to a modern efficient flexible fleet. Instead he pretended QF was making money, when in reality those profits should have gone to buying 777's and writing off old fleet

[PLovett]

Don't forget that the last time management tried to take QANTAS private the whole thing foundered because an institutional shareholder didn't buy the bovine excreta being spread by said management. QANTAS is not owned by management, they need those institutional shareholders to support them. Normally they do but it is not guaranteed.

I have no doubt that the present management wants to circumvent the intent of the QANTAS Sale Act hence the promotion of JetStar to the detriment of mainline but it is another thing to do that with a view to privatise the company. For one, there are serious criminal sanctions for duding your shareholders by driving down the share price in order to make a purchase offer by a private equity company more agreeable.

[1me]

I have no doubt that the present management wants to circumvent the intent of the QANTAS Sale Act hence the promotion of JetStar to the detriment of mainline but it is another thing to do that with a view to privatise the company. For one, there are serious criminal sanctions for duding your shareholders by driving down the share price in order to make a purchase offer by a private equity company more agreeable. Yes but do you honestly think those at the summit will take the fall for such a breach? Not on your life! Some other poor schmuck down the food chain will take one for the team and be the scapegoat and they'll hang them out to dry just as they did with those Freight execs who are in the slammer.

Also, look at the last APA bid.. was there any recrimination when that all fell in a heap? Even with the seeming conflict of interest all of the board and exco got away with that scott free.. Not even a slap on the wrist and we got to give GD $11M for the privilege!

[PLovett]

1me, I understand your point and admit that I haven't looked at the freight case and who said what etc., however, it would be very difficult for a ceo and board to say they had no part in corporate strategy decisions.

The last attempt to privatise QANTAS was open and above board. That there was an element of conflict of interest was there for everyone to see and it was one of the reasons that an institutional shareholder decided to vote against the sale.

Should QANTAS be so stupid as to try and drive down the mainline to privatise it then it won't just be the shareholders up in arms. While many here continue to argue that QANTAS is deliberately destroying its mainline to favour JetStar, I have always thought that it was managements aim to wind back the mainline to only those destinations that can support a full-service airline, that is, where there is a large percentage of pax who are prepared to pay full-fare or business. JetStar was to pick up the discount pax, the tourist destinations, both in Australia and overseas.

[Sunfish]

Plovett, I disagree that the attempt to take QF private was above board although I'm absolutely sure it was technically legal.

The reason that the proposal did not get up was that it stank to high heaven which put off some institutional investors and one American corporate raider who had got wind of what was planned and bought about 5% (from memory) of the company who was too greedy; holding out for an hour too long in an attempt to get a better deal for himself.

The raiders almost got to the 50%+ compulsory acquisition mark.

The entire strategy revolved around an attempt to portray Qantas as a broken down wreck of an airline that a few kind hearted billionaires, assisted by a caring and sharing Qantas Board and senior management, would charitably purchase from the long suffering shareholders.


What do we see today? Exactly the same gloom and doom talk that destroys shareholder value.

Qantas makes a profit when other airlines do not precisely because it dominates the Australian Domestic and international markets. It has extremely strong leverage with Government, at the state level because air transport links are a major factor in economic growth, and at a Federal level because of its iconic status and defence implications.

Qantas goes to great lengths to disguise its profitability - it avoids telling outright lies by talking about making an acceptable return on capital without explaining just what that figure is or exactly who it has to be "acceptable" to - perhaps the tea lady perchance?

Furthermore there is no disinterested forensic aviation accounting or auditing capability in Australia that is able to give an unbiased and accurate opinion on Qantas. The capacity simply doesn't exist, nor do the regulators have it. I asked the ACCC about that during Compass I or II and was told that if a complaint was ever made they might be able to form an opinion "in about Six months" when we all knew that Six weeks would be too long for Compass to survive the predatory pricing assault.

For example, is there any auditor or accountant in Australia who is prepared to argue on detailed technical grounds whether a specific Boeing derived aircraft modification to a Qantas aircraft is a business expense (for example compliance with an AD) or something that merely improves service life (which would be a capital expense). Little devices like these were used to hide Ansett's profitability for years, at least until Eddington gutted it.

Qantas feeds regulators, employees and the public bullshyte every day, because they know they can get away with it.

The sad part is that all this wouldn't matter if they were making dog food instead of allegedly providing safe air transportation.

Correction: I guess it would matter to dogs.

[Oldmate]

$2.06 - I think Mr Joyce will be under a fair bit of pressure right now.

[breakfastburrito]

Thank you Sunfish, you give us a perspective that Qantas management hoped would never surface...

[HF3000]

Plovett, I disagree that the attempt to take QF private was above board although I'm absolutely sure it was technically legal.Qantas paid Macquarie $300 Million in consulting fees to make it "legal". (Or they would have if it succeeded, so it was reported - I never read how much money actually changed hands in the end).

Almost anything can be "legal" with a sufficiently expensive bunch of lawyers to defend it.

Let's face it - who else has $300 Million and the motivation to fight it? Certainly not the Government - the politicians including the opposition looked at it, didn't like it, but said they couldn't definitively argue that it was against the Sale Act.

It clearly was against the intent of the Sale Act - it was a foreign takeover structured so that it didn't look like a foreign takeover. Exactly what the Sale Act was designed to prevent. But $300 Million buys a lot of lawyers. Somehow they found a way around the wording of the Sale Act.

By the way, who was ever held accountable for that waste of money?

[Sunfish]

Marg fell on the sword, however i think it was Dixon that set up the deal.

They must have been stuffing cash in accounting hollow logs for years beforehand. I wonder how much is still there?

I think Packer might raid Qantas if the share price goes low enough, get rid of the Board and Senior management and start again...

Toll or Lindsay Fox might look at it again too.

[Taildragger67]

I think Packer might raid Qantas if the share price goes low enough, get rid of the Board and Senior management and start again...

Methinks Rupert. Take a look at how his papers are getting stuck into the organised workforce.

[1a sound asleep]

Qantas Sale Amendment (Still Call Australia Home) Bill 2011 (http://www.comlaw.gov.au/Details/C2011B00162)

After paragraph 7(1)(h)
Insert:
(ha) require that Qantas ensure that, of the facilities, taken in aggregate, which are used by Qantas subsidiaries and any associated entities in the provision of scheduled international air transport services, the facilities located in Australia, when compared with those located in any other country, must represent the principal operational centre for the subsidiary or associated entity; and
(hb) require that the majority of heavy maintenance of aircraft and the majority of flight operations and training conducted by, or on behalf of, Qantas is conducted in Australia; and
(hc) require that the majority of heavy maintenance of aircraft and the majority of flight operations and training conducted by, or on behalf of, Qantas subsidiaries and any associated entities is conducted in Australia; and
4 After paragraph 7(1)(i)
Insert:
(ia) require that at least one of the directors of Qantas has a minimum of 5 years’ professional flight operations experience; and
(ib) require that at least one of the directors of Qantas has a minimum of 5 years’ aircraft engineering experience; and
5 Subsection 10(1)
After “application of the Minister,”, insert “100 shareholder members or shareholder members who hold at least 5% of the shares in Qantas,”.
6 Subsection 10(2)
After “application of the Minister,”, insert “100 shareholder members or shareholder members who hold at least 5% of the shares in Qantas,”.

[bankrunner]

I like this bit.


(ia) require that at least one of the directors of Qantas has a minimum of 5 years’ professional flight operations experience; and
(ib) require that at least one of the directors of Qantas has a minimum of 5 years’ aircraft engineering experience; and

[1a sound asleep]

sorry, just wanted to keep the ball rolling on this one... before Aj gets in on the act:}

[rockapetransport]

When does this get debated in the senate? Whats the process involved for this to pass?

Chances of success?

[1a sound asleep]

Its worth pushing this issue hard again now that there is plenty of anger and dismay with Qantas in both sides of the Government. Push the senate enquiry and you may find this has more chance

[Gingerbread]

This is what your looking for Fisher.

http://www.pprune.org/dg-p-reporting-points/389591-whats-happening-aipas-qantas-sale-act-case.html

Its spilt milk, and excruciatingly painful to think what could have been.

[King William III]

When does this get debated in the senate? Whats the process involved for this to pass?

Chances of success?

Well, given the way Joyce blindsided the government ( or did he try to tell them and they played him masterfully??) and the gradually unravelling fact that some of the libs may have been in on the whole grounding plan…..Abbott's spluttering when asked (on Ch10 news tonight) was hilarious and telling.

I'd say the chances of success for this amendment may have just gotten a lot better.

It would be a bit like nationalisation without actually having to buy it back…..

[paulg]

It seems the AIPA may have been compromised in running this case in terms of protecting its membership. Imagine the threats that would have been made by management about job losses. The Qantas Sale Act is a hopelessly poor piece of legislation given its apparent purpose was to keep Qantas an Australian owned, managed and operated company with an obligation to be the flag carrier internationally. Cleverly management found a loophole by operating subsidiaries internationally to avoid their implicit obligations under the Act.

[Howard Hughes]

1A, you need to get that to Senator Xenophon ASAP!:ok:

[QF94]

I have always thought that it was managements aim to wind back the mainline to only those destinations that can support a full-service airline, that is, where there is a large percentage of pax who are prepared to pay full-fare or business. JetStar was to pick up the discount pax, the tourist destinations, both in Australia and overseas.

No this is not entirely true. It was slated under Dixon that Jetstar would NEVER compete with or cannabilise a QANTAS route. You have been able to buy SYD-MEL (Tullamarine) tickets for a couple of years now. For the 3rd busiest route in the world, QANTAS is making a killing on this sector. If AJ's figures are correct (who can trust them?) QF has 65% of the domestic sector.

As for the international side of things, I work in International, and you are hard pressed trying to find a flight that is not full or not near full on all sectors heading out of SYD. SYD - Jo'berg, SYD-LAX, SYD-SIN, SYD-HKG, SYD-BKK, SYD-HNL.

Something is amiss with the reports coming out of COWARD St Mascot. If International is losing $200million a year, why is $250million being spent on upgrading 744 interiors to A380 status?

[QF94]

This is just about what's left of QANTAS

http://i1235.photobucket.com/albums/ff432/QF94/qantasshell.jpg

[PLovett]

QF94, love the cartoon - how true.

As to your previous post, I don't think we are disagreeing. Dixon may have stated that Jetstar wasn't going to cannibalise QANTAS routes, or compete on them, but I think this is semantics. The SY - ML route is the 3rd busiest sector because it is the prime business route in Australia. Second would be SY - BN, I suspect. QANTAS will continue to operate where there is enough business to justify full-fare pax.

I live in Tasmania and it is noticeable that QANTAS only operates here for the morning and evening flights, in other words, for the business end of town.

As to the international side of the business you have much better information than I. As to the public figures about that side of the business I have my doubts and would love to see the results of a forensic audit. It should also be stated that although AJ is being seen as the villain in all this there is the Chairman of the Board who has a wicked reputation, especially in the field of IR, from his time at other companies. A lot of what has happened over the past 12 months has his apparent imprint.

[QF94]

PLovett,

I totally agree with you that AJ is not the brains in this fiasco. Seeing him live at the AGM convinced me of that. Leigh Clifford is one ruthless, vicious person, who I believe, possibly with James Strong, orchestrated this whole thing. The board needs a fall guy, and who better than Elmer Fudd (AJ). That's why they paid him the big bucks, as that will be his payout when he is made to leave the employ of QANTAS

[Orangputi]

QF94 absolutley spot on AJ is just a prostitute Clifford and Strong and the rest of the board are the evil ****e bags. Barely human they epitomise what is wrong with the corporate world. they are treading a very fine line on legality. it will be a happy day when these scum of the earth are found out for the vermine they really are.

By the way I dont work for QF (used to 11 years ago!) but I am saddened about what happened to a great company by low life corporate pigs feeding at the trough (DIXON you started it!).

Thats my rant!!!

[Mr Leslie Chow]

I agree QF94, I often wonder this, flights are always full or fullish and never ever light.....

The argument can be it is yield but I don't buy that line either...

Something smells like a night fighters undercarriage after NYE

:uhoh:

[blow.n.gasket]

Been asked to post this.


Re: AIPA Senate Submission

Congratulations to whoever put together the attached AIPA submission to the Senate Inquiry into the ‘Aircrew Bill’ and the ‘Still Call Australia Home Bill’. It is a very comprehensive consideration of the consequences of Qantas’ strategy to offshore its international operations.

Notwithstanding, it has one very glaring mistake, which left uncorrected, will, I believe, curtail the only opportunity Employee Shareholders currently have to legally challenge Qantas’ offshoreing strategy. AIPA’s view that the:

· ‘Currently the Qantas Sale Act only allows an application to the Court for injunctions by the Minister. The bill extends this to allow for applications to the Court by 100 shareholder members or shareholder members who hold at least 5 percent of the shares in Qantas.’

Is materially misleading and if accepted by the Senate Committee, will probably neutralise the ability shareholders presently have to take issue with Qantas’ not complying with the Qantas Sale Act by seeking to have enforced Qantas’ compliance with its own Articles of Association.

You may recall that the Sale Act action I took on behalf of AIPA members in 2007 was permissible because it sought to hold Qantas accountable to the Sale Act by enforcing compliance with its Articles of Association. I have attached for your information an email from AJ Macken & Co stating inter alia:

· the proceeding was properly brought;
· in Senior Counsel’s view Qantas was clearly in breach of the Qantas Sale Act;
· the proceeding gave AIPA and its pilot members some leverage against further and potentially more serious breaches of the Qantas Sale Act adversely affecting job security and career progression of Qantas pilots; and
· the discontinuance of the present proceeding would not prevent the commencement of a fresh proceeding by a qualified plaintiff if Qantas moves to take advantage of the discontinuance.

I note that the Senate Committee inquiring into ‘Aircrew Bill’ and the ‘Still Call Australia Home Bill’ is holding hearings tomorrow in Canberra and it is vital that AIPA make clear to the Senators that whilst only the relevant Minister can seek to take out injunctions enforcing Qantas’ compliance with the Qantas Sale Act, employee shareholders are presently able to seek Qantas’ compliance with the Qantas Sale Act by seeking to enforce compliance with Sale Act obligations contained in the company’s Articles of Association.

Yours sincerely,

Capt Ian Woods
AIPA Past President.

[WorthWhat]

The action you refer to Blown was well targeted and ahead of its time, but ultimately it too would have trigged a political showdown.

[Prince Niccolo M]

Gingerbread/Woodeneye/blow.n.gasket,

Notwithstanding, it has one very glaring mistake, which left uncorrected, will, I believe, curtail the only opportunity Employee Shareholders currently have to legally challenge Qantas’ offshoreing strategy. AIPA’s view that the:

· ‘Currently the Qantas Sale Act only allows an application to the Court for injunctions by the Minister. The bill extends this to allow for applications to the Court by 100 shareholder members or shareholder members who hold at least 5 percent of the shares in Qantas.’

Is materially misleading and if accepted by the Senate Committee, will probably neutralise the ability shareholders presently have to take issue with Qantas’ not complying with the Qantas Sale Act by seeking to have enforced Qantas’ compliance with its own Articles of Association.

I have read the AIPA submission - where does the 'glaring mistake' and the quoted AIPA view appear? :confused: :confused: :confused:

[WoodenEye]

Hmmm! the email you refer to was intended to be private correspondence between myself and some AIPA committee members, the AIPA executive director to whom it was addressed and lawyers also making submissions to the Inquiry, but now that it’s been made public without my consent, and you’ve publically asked, I’ll try to help you out.

I wrote the email above on behalf of some confused AIPA members, (I.e. those who knew I had filed a Federal Court Claim on behalf of all AIPA Members seeking to have the QSA upheld in 2007), but now wanting clarification of their Associations recent written advice to them that:
· only the Minister can make and application to the Court for (QSA) injunctions

To be clear, AIPA made no express statement in its Senate submission. However AIPA’s submission does support without qualification the fundamental Inquiry premise that QSA 92: ‘currently only allows an application to the Court for injunctions by the Minister.

The consequence of their association not clarifying the initial oversight made by whoever drafted the Bill’s terms of reference, is that the Senators conducting the hearing would, if not informed otherwise, probably accept that only the relevant Minister can seek injunctions and subsequently would probably support a recommendation:
· to allow for applications to the Court by 100 shareholder members or shareholder members who hold at least 5 percent of the shares in Qantas.

Regretfully, the situation as it stood was materially misleading, and could if it remained uncorrected, extinguish existing rights all shareholders currently have to seek enforcement of QSA obligations arising out of Qantas’ compliance with its Articles of Association and Australian Corporations Law.

For your information, I phoned the executive director on the Monday before the Senate hearing to apprise him of the situation, but I guess he was flat out, as he did not return my call. So I followed him up with the email you refer to.

At the end of the day, the issue raised in the email was not set straight by the Association at the Senate hearing on the Friday as requested. Nonetheless, the situation has now been clarified.

I trust this satisfies your inquiry. If you are a Qantas pilot, contact me privately if you would like further information, as I would prefer not to discuss publically, a private matter.

Kind Regards
Ian Woods

[Prince Niccolo M]

WoodenEye,

I'm not a Qantas pilot, just an interested bystander intrigued by that email.

Out of interest, I had a bit of a look at the Qantas Sale Act. I think that the statement you quoted "that QSA 92: ‘currently only allows an application to the Court for injunctions by the Minister" is factually correct. But I don't think it is correct to say that any existing shareholders rights are at risk at all.

Here's my slant on it:

The Minister (or the Minister's Delegate) whilst acting in that capacity has no standing under the Corporations Act 2001 to apply to the Federal Court for injunctive relief in regard to any nefarious activities at Qantas. Therefore, section 10 of the Sale Act specifically created Ministerial standing as part of the national interest provisions.

Importantly, section 13 of the Sale Act means that neither Act interferes with the other. My understanding is that any amendments to section 10 of the Sale Act would operate the same way and that no rights available to shareholders under the Corporations Act 2001 would be affected in any way by the Sale Act.

As an aside, that probably means that the proposed amendment to include the shareholders is moot, except to the extent that the Corporations Act 2001 does not provide the same grounds to shareholders as would the amended section 10. :cool: :cool:

[WoodenEye]

Sorry Prince, the issue is a private matter well documented in volumes of legal argument and really not suitable for debate on an anonymous public forum.

Suffice to say, injunctive rights the Minister has and injunctive rights Shareholders have are different because they arise out of different legislation and in the Qantas Sale Act case I was applicant for, it took one hell of a lot of time and money for lawyers to establish that Shareholders do in fact have injunctive rights.

That the issue was hotly contested, is I assume, what concerns a number of Qantas pilots about the unqualified statement -QSA 92 currently only allows an application to the Court for injunctions by the Minister.

Best Wishes
Ian Woods