Will QANTAS buy Cobham?

[What The]

More leverage?

[geeup]

Highly doubt it

[Icarus2001]

Why would they buy Cobham?

Advent International Corporation is already proposing to buy Cobham for four BILLION pounds.

Assuming you meant the Australian branch of aviation services then who says that part is for sale?

[topend3]

Yes talking about the aviation arm only

[Lapon]

Throw in the Regional operation in order to get out of the B717 contract?

[Icarus2001]

Yes talking about the aviation arm only Well what makes WHAT THE or anyone else think that it is for sale? Advent International may want the WHOLE of Cobham as it is or indeed they may sell off parts but that is unknown as yet. In fact the deal has not even gone through yet and has a few hurdles to overcome. Not least that the UK government may want a defence contractor to remain with a large UK ownership.

Throw in the Regional operation in order to get out of the B717 contract? That makes no sense at all. A little history for you. National Jet and Cobham bid for the surveillance contract years ago and NJS won. Cobham then bought NJS to gain that contract and as a side issue gained what became the airline and regional services divisions, which were one originally. Buying a company you have a contract with does not immediately invalidate the contract. Anyway, QF obviously likes having cheap cabin crew and pilots available to fly their 717 aircraft.

[TWOTBAGS]

Qantas have zero interest in fixing or bettering regional ops in Australia. They will have no interest in another AOC.

I cant remember if it was Strambi or another, however the comment was made that "the Australian regional market will not sustain the capital requirements of new airframes". They had the opportunity a few years ago to take that step however they decided to keep the 717's even when Delta was chomping at the bit to get them.
They dangle the jet carrot to Sunnies and Eastern every few years, then go and acquire dutch ovens that nobody else wants.

This week when Embraer brought the E2 to Australia the smartest men in the room did not even bother to leave Coward St to come for a look when the aircraft was barely a couple km away from them.

Just remember the jet you fly and everything in it is provided by the lowest bidder...….

[ebt]

Buying a company you have a contract with does not immediately invalidate the contract. Anyway, QF obviously likes having cheap cabin crew and pilots available to fly their 717 aircraft.

With what I know of Qantas procurement, a non-negotiable in most of their contracts is a "majority control" clause which gives QF the ability to walk away if majority control of the contracting party changes. I'd be surprised if this is not in the contract with Cobham. But they would only invoke that if they had a viable alternative, which really comes down to the dollars and cents. If it went that way, I would imagine that Network would be in the frame, but they would probably look favourably at Alliance, if they can convince the ACCC to let them take control.

[Icarus2001]

Mmmmmm replace 125 seat B717 with a 100 seat F100. You may be onto something.

[Lapon]

Buying a company you have a contract with does not immediately invalidate the contract.

Exactly, if Advent want out out of Australia they are going to cough up something to get out thier contract with Qantas... how about a regional fifo operation with some cash flowing either direction. Dont know about special mission however.

I doubt it will be anything other that business as usual anyway, but this is a rumour and conspiracy forum afterall.

[TBM-Legend]

Teabagger, Stop stealing lines from a great man!

Just remember the jet you fly and everything in it is provided by the lowest bidder...….​​​​​​​

​​​​​​“As I hurtled through space, one thought kept crossing my mind - every part of this rocket was supplied by the lowest bidder.”
― John Glenn

[Rated De]

Mmmmmm replace 125 seat B717 with a 100 seat F100. You may be onto something.

Yes.
Regulatory and market considerations aside.
The operating cost of the B717 per hour is on par with a 738 (at least with other operators)
Thus, given the market may be too small for the 738 (or other IR posturing) the question is what market is ultimately going to support which aircraft?

[Isamu Pahoa]

Yes.
Regulatory and market considerations aside.
The operating cost of the B717 per hour is on par with a 738 (at least with other operators)
Thus, given the market may be too small for the 738 (or other IR posturing) the question is what market is ultimately going to support which aircraft?
You sound like you know what you're talking about, but you don't!

[Blitzkrieger]

Will QANTAS buy Cobham? No.
Will they try and buy Cobham out of the contract early for a dollar? Very likely.
Will they use this situation to leverage Cobham crew into a bargain basement contract? Almost certainly.

[Arthur D]

You sound like you know what you're talking about, but you don't!

I beg to differ.

[Rated De]

You sound like you know what you're talking about, but you don't!

Thank you for your opinion.

However the information is publicly available.
To help your education, the operator, following acquisition of a competitor inherited many B717.
The aircraft were disposed of inside two years and the reason is detailed by the operator.

[VH-ABC]

Surely Virgin will buy it. It’s what we do!

[nefarious1]

I don’t know if they’ll buy Cobham, but Alliances share price has sure spiked.

[Rated De]

I don’t know if they’ll buy Cobham, but Alliances share price has sure spiked.

Ever the stickler for his Corporate obligations, QF CEO Little Napoleon would never have forewarning of any such change. Thus, an Alliance purchase is simply "amazing timing" rather like vesting dates on really cheap management share options. All coincidence.

[Engineer_aus]

I've heard rumors here on the east coast that Alliance are looking at Cobham Australia.

[Lapon]

I've heard rumors here on the east coast that Alliance are looking at Cobham Australia.

With CAvS about three times the size of Aliiance depending how you measure it, I would have thought it might look nice but be out of AQZ's league.

[airdualbleedfault]

Mmmmmm replace 125 seat B717 with a 100 seat F100. You may be onto something
So the average load factor is 100 %?

[gordonfvckingramsay]

The feeling after this week is a pretty emphatic NO, QF will let the operation and the people wither on the vine. That’s just the feeling amongst the crews at the coal face though and there has certainly not been anything from the company to calm the fears.

[Lapon]

Advent are as locked in to the operation as QF are. If Advent want out of then I doubt it will be a case of selling anything to anyone, rather it will be a matter of paying QF whatever the penalty is to do it 'themselves' under whatever AOC that happens to be.

[empire4]

Advent are as locked in to the operation as QF are. If Advent want out of then I doubt it will be a case of selling anything to anyone, rather it will be a matter of paying QF whatever the penalty is to do it 'themselves' under whatever AOC that happens to be.

Heres some food for thought with Cobham Australia's 4 major contracts and charter business.

July 2016, 10 year contract worth $1.2 Billion with Qantas for B717's. Qantas own all the equipment and metal etc etc. Qantaslink perform the maintenance in Canberra (apparently) and line support in Sydney & Melbourne. Hobart is done by Jetstar. Base Maintenance is carried out in Singas. The Flight attendants have been progressively transitioning to contract company Altara with the pilots all changing to QF uniforms a few years back. Qantas just shut down the Darwin B717 base, and are progressively using Network more and more on West coast ( they just advertised for A320 LAMEs Darwin and Perth). So what does that leave Cobham or a potential buyer? Well revenue of $120 Mil pa isn't much of an indicator on performance unless you have the outgoings too (under strategic review currently), and from what I understand the profit margin is very minimal, like near 1% so you do the math. https://australianaviation.com.au/2018/03/repriced-qantas-agreement-squeezes-cobham-profits/
The Border Force contract expires in 2020, with Cobham no doubt likely to receive a contract extension (with ageing aircraft, crew issues etc). Cobham will face significant competition for the rebid, and may not have the best relationship with the government if any problems such as flight crew shortages have occurred. http://www.defense-aerospace.com/article- (http://www.defense-aerospace.com/article-view/release/67110/cobham-signs-a%241bn-coastwatch-contract-%28mar-6%29.html)view/release/67110/cobham-signs-a%241bn-coastwatch-contract-%28mar-6%29.html (http://www.defense-aerospace.com/article-view/release/67110/cobham-signs-a%241bn-coastwatch-contract-%28mar-6%29.html)
The AMSA 12-year, $A640 million search and rescue contract, quote " had brought a revenue benefit for the company". Once again, magic words with big numbers but people need profit margin. No good having 4 new aircraft that make you a loss.
Australian Air Express - any little bit of research on the internet and you'll find plenty of news on Qantas B737's and A320s freighters and nothing on National Jet Express or Cobham suggesting nothing long term.
Last but not least is the Charter - With a spate of recent incidents and an ageing fleet this sector faces stiff competition in the west against the juggernauts of Australia aviation and some local operators. Network, VARA, Skippers, Qantas, Virgin even Jetstar. The list goes on

Cobham do have a large footprint in Australia. infrastructure no doubt I'm sure will be snapped up.What is left you ask? Thats the question on everyone mind at Merrill Lynch Bank of America and Cobham UK

[AerocatS2A]

The Qantas Freight (not AAE for several years now) contract would likely end as soon as Badgerys Creek is up and running. The contract exists because of the Sydney curfew dispensation given to the BAe146. That dispensation ends when the other airport is built.

[chimbu warrior]

The Qantas Freight (not AAE for several years now) contract would likely end as soon as Badgerys Creek is up and running. The contract exists because of the Sydney curfew dispensation given to the BAe146. That dispensation ends when the other airport is built.

Based on Badgerys Creek progress to date (40 years of talking and no action) I think the 146 will be around for quite a while yet.

[AerocatS2A]

Based on Badgerys Creek progress to date (40 years of talking and no action) I think the 146 will be around for quite a while yet.
Construction has started according to Wikipedia, with stage 1 due for completion in 2026. So yes, the 146 will be around for a while, but I wouldn’t want to rely on that contract for the rest of my flying career.

[Icarus2001]

As I suggested above, the UK government may have something to say about the proposed sale.

https://www.ft.com/content/cb6f9b92-d9db-11e9-8f9b-77216ebe1f17

https://www.independent.co.uk/news/business/news/cobham-defence-advent-takeover-national-security-uk-government-investigation-a9110376.html

https://www.bbc.com/news/business-49738885

[ebt]

As I suggested above, the UK government may have something to say about the proposed sale.

https://www.ft.com/content/cb6f9b92-d9db-11e9-8f9b-77216ebe1f17

https://www.independent.co.uk/news/business/news/cobham-defence-advent-takeover-national-security-uk-government-investigation-a9110376.html

https://www.bbc.com/news/business-49738885

But don't expect that to slow the sale of Cobham Australia. Any way you look at it, the regional ops and Qantas contract are good to have but don't fit with Cobham's core business, no matter who owns the UK plc. There seem to be bidders around apparently and an announcement likely before the year is out, so we'll see soon enough.

[Icarus2001]

Where has it been said with any degree of certainty that Cobham Australia is for sale?

Maybe they do not fit with "core business" but the business of business is to make money which Cobham Australia does for Cobham PLC so why sell that BU? They don't seem to have been worried for the last decade or so that it was not "core business". They were happy to take the cheques that were rolling in.
The second point is who will buy it? Virgin is in severe cost cutting mode not acquisition mode. The current CEO can see what fun Tiger and Skywest were/are to manage as part of "the group". QF may take their own 717s back in house but why? The Cobham pilots and Altara cabin crew are cheaper, much cheaper. Alliance to buy Cobham ? Who else is there? Regional Express? Not their core business is it?

[Lapon]

QF may take their own 717s back in house but why?

Because Cobham themselves walk away from the contract? The 717 crews already have QF staff numbers etc so surely the question will be asked of why pay the middle man.
Cobham was bypassed in favor of Altara for the CC *apparently*. It wasnt a case of sub-sub contracting as is some say.

[pilotchute]

Qantas puts the 717 on its AOC and creates a staffing company to employ Cobham pilots and deal done.

[gordonfvckingramsay]

Qantas puts the 717 on its AOC and creates a staffing company to employ Cobham pilots and deal done.

It has a staffing company, it’s called QANTAS.

[ECAMACTIONSCOMPLETE]

Qantas puts the 717 on its AOC and creates a staffing company to employ Cobham pilots and deal done.

Perhaps the 10-12 soon to be ex JQ A320s will go to Network, allowing them to take over the cobham 717 flying on the east coast. I also hear Network is gaining ETOPS approval. Perhaps to start transcon flying?

[gordonfvckingramsay]

Unlikely as the routes operated by the 717 wouldn’t take the larger aircraft without flooding those routes with seats. Reducing frequency is a dud move too. Replacing the 717 with a higher cost base would also be very non-QF.

[ECAMACTIONSCOMPLETE]

Unlikely as the routes operated by the 717 wouldn’t take the larger aircraft without flooding those routes with seats. Reducing frequency is a dud move too. Replacing the 717 with a higher cost base would also be very non-QF.

Not sure about the higher cost base. The A320 burns about 25% less fuel per seat than a 717 (2400kg/hr for 186 seats v 2100kg/hr for 125 seats). Also, check out the Network Pilot and cabin crew EBAs

i got the 2100kg/hr from another forum, happy to be corrected! I used all economy v all economy seating config for ease of comparison.

[gordonfvckingramsay]

Dual class in the East. Besides you wouldn’t fill an A320 on a route that really wants frequency over capacity. 717s will make money at much lower load factors than the Airbus to boot.

[ECAMACTIONSCOMPLETE]

Dual class in the East. Besides you wouldn’t fill an A320 on a route that really wants frequency over capacity. 717s will make money at much lower load factors than the Airbus to boot.

i had to use economy v economy configs fo reader of comparison as I don’t know the burn figures of a dual class A320. But dual v dual would have approx the same percentage difference in burn.

The schedule could easily be adjusted on routes where multiple group airlines operate to ensure capacity does not exceed demand.

[regional_flyer]

Cobham was bypassed in favor of Altara for the CC *apparently*. It wasnt a case of sub-sub contracting as is some say.

My understanding is it was part of the latest contract model, where Qantas is essentially paying cost on the contract with very little profit for Cobham. Any cabin crew already employed prior remain as Cobham employees on their own agreement. Those employed by Altara are trained by Cobham crew, with their rostering and crewing/operations also being done by Cobham.

I know of a few cabin crew that moved from the Cobham-employed 146 operation to Altara-employed 717 and back again, as a group, due to overstaffing at the time. They obviously lost their seniority and continuous years of service in doing so, but otherwise it was all pretty seamless and there is clearly some sort of integration with Cobham and Altara in this regard.

[pilotchute]

It has a staffing company, it’s called QANTAS.
Yes but to put everyone on a Z scale pay structure I'm sure they can throw together a new entity.
"Qantas budget low cost cheap as staffing'

[ECAMACTIONSCOMPLETE]

Yes but to put everyone on a Z scale pay structure I'm sure they can throw together a new entity.
"Qantas budget low cost cheap as staffing'

It’s called Network

[smiling monkey]

The Qantas Freight (not AAE for several years now) contract would likely end as soon as Badgerys Creek is up and running. The contract exists because of the Sydney curfew dispensation given to the BAe146. That dispensation ends when the other airport is built.

The Qantas Freight contract has just been extended 'till 2026. When does Badgery Creek plan to start operating again?

https://australianaviation.com.au/2019/09/cobham-wins-contract-extension-from-qantas-freight/

[Rated De]

Yes but to put everyone on a Z scale pay structure I'm sure they can throw together a new entity.
"Qantas budget low cost cheap as staffing'

Sitting in a hallowed hall way, deep in the bowel of Fort Fumble IR hive is the sign...

Spare no expense to save on pilot costs.

[AerocatS2A]

The Qantas Freight contract has just been extended 'till 2026. When does Badgery Creek plan to start operating again?

https://australianaviation.com.au/2019/09/cobham-wins-contract-extension-from-qantas-freight/

Sometime around then I believe. That's quite a long extension, they're normally a bit shorter than that.

[Bignose101]

Will QANTAS buy Cobham - YES (half of it)

[CaptainEmad]

Will QANTAS buy Cobham - YES (half of it)

“Buy”

I doubt any money changed hands.