BA - QF merger?
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Hmmmmmmm
You would think "once bitten twice shy" oh well............another Allco-pop debacle.
Boutique US investment bank Greenhill and Macquarie Group are understood to be advising Qantas. Macquarie was part of the Airline Partners Australia consortium alongside Texas Pacific, Allco Finance and Onex Corporation, which launched a bid for Qantas in December 2006.
The bid failed after failing to achieve shareholder support.
The bid failed after failing to achieve shareholder support.
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and Iberia.....
Stephen Bartholomeusz
Qantas' missing link
An interesting insight into the potential ambition of British Airways and Qantas as they pursue their proposed dual-listed company merger was provided by comments overnight by BA’s treasurer, who said it was possible that a simultaneous merger with Spain’s Iberia and an alliance with American Airlines could all be consummated.
While Iberia isn’t so sure, with its chief executive Fernando Conte saying it would be too complex to pursue a tripartite merger, BA’s George Stinnes said the deals weren’t alternatives and could all happen if regulators allowed them to. BA is trying to negotiate and get anti-trust clearance for a relationship with American that is very similar to the joint services agreement it has with Qantas on the Kangaroo route.
BA, Qantas and Iberia are, along with American, three of the key members of the Oneworld alliance. The other important members of the alliance are Cathay Pacific and Japan Airlines. Qantas is said to have held talks with Cathay but it is more focused on its ambitions and interests in China.
If a three-way merger of BA, Qantas and Iberia could be executed, it would effectively represent the partial corporatisation of the Oneworld alliance.
The alliances – the other big ones are Star and SkyTeam – are an attempt by the carriers to gain some revenue and cost synergies in circumstances where government involvement in the industry and the plethora of bilateral agreements that underpin their access to routes has frustrated more conventional mergers.
There has long been talk in the industry of the alliances being the first step towards real consolidation. The Air France/KLM merger and Northwest/Delta mergers have already started that process within the SkyTeam alliance. The discussions between BA/Qantas and Iberia are a logical response to the consolidation starting to occur around them.
The combination of BA’s northern hemisphere and transatlantic routes, Iberia’s European and South American networks and Qantas’ presence in the Pacific would be quite powerful.
There would, however, still be a missing link if the strategy were to create a truly global network with common direction, management and, effectively, ownership. As it stands, if the deals on the table were done, there would be a strong northern hemisphere network connected to a strong southern hemisphere network – but without a hub presence in Asia, where the long-term growth prospects are exciting.
Qantas has spent years trying to negotiate a tie-up with one of the Asian carriers – Singapore, Cathay and Malaysia – but so far has failed. While it is gradually building a low-cost carrier network in the region, ideally it would like to own or have an interest in one of the Asian hub carriers.
Malaysia, which has an affiliation with Air France /KLM, would provide a good and increasingly well-run Asian hub carrier if the mergers were successful and the new enlarged group wanted to start filling in the gaps in a global vision.
The other aspect of the mergers – if they happen – would be the potential to expand Jetstar into a global low-cost carrier long-haul brand.
At the short-haul end of the market, the low-cost carrier segment is over-crowded and is already starting to experience some rationalisation and consolidation as the weak players disappear and the stronger players, like Ryanair (which is trying to acquire Aer Lingus), seek to take advantage of the industry pressures and expand.
Creating a global low-cost carrier brand without legacy cost structures and at arm's length from their core brands could, as Qantas has demonstrated in its own operations, provide enormous flexibility, enhanced focus and probably better profitability for BA and Qantas and, if it joined them, Iberia.
Jetstar could, along with Virgin, become the closest thing to a truly global brand the industry has. There would be practical and political obstacles to any fundamental rationalisation of the parent brands and their product offerings. Jetstar, however, could be the vehicle through which real synergies could be realised.
Qantas' missing link
An interesting insight into the potential ambition of British Airways and Qantas as they pursue their proposed dual-listed company merger was provided by comments overnight by BA’s treasurer, who said it was possible that a simultaneous merger with Spain’s Iberia and an alliance with American Airlines could all be consummated.
While Iberia isn’t so sure, with its chief executive Fernando Conte saying it would be too complex to pursue a tripartite merger, BA’s George Stinnes said the deals weren’t alternatives and could all happen if regulators allowed them to. BA is trying to negotiate and get anti-trust clearance for a relationship with American that is very similar to the joint services agreement it has with Qantas on the Kangaroo route.
BA, Qantas and Iberia are, along with American, three of the key members of the Oneworld alliance. The other important members of the alliance are Cathay Pacific and Japan Airlines. Qantas is said to have held talks with Cathay but it is more focused on its ambitions and interests in China.
If a three-way merger of BA, Qantas and Iberia could be executed, it would effectively represent the partial corporatisation of the Oneworld alliance.
The alliances – the other big ones are Star and SkyTeam – are an attempt by the carriers to gain some revenue and cost synergies in circumstances where government involvement in the industry and the plethora of bilateral agreements that underpin their access to routes has frustrated more conventional mergers.
There has long been talk in the industry of the alliances being the first step towards real consolidation. The Air France/KLM merger and Northwest/Delta mergers have already started that process within the SkyTeam alliance. The discussions between BA/Qantas and Iberia are a logical response to the consolidation starting to occur around them.
The combination of BA’s northern hemisphere and transatlantic routes, Iberia’s European and South American networks and Qantas’ presence in the Pacific would be quite powerful.
There would, however, still be a missing link if the strategy were to create a truly global network with common direction, management and, effectively, ownership. As it stands, if the deals on the table were done, there would be a strong northern hemisphere network connected to a strong southern hemisphere network – but without a hub presence in Asia, where the long-term growth prospects are exciting.
Qantas has spent years trying to negotiate a tie-up with one of the Asian carriers – Singapore, Cathay and Malaysia – but so far has failed. While it is gradually building a low-cost carrier network in the region, ideally it would like to own or have an interest in one of the Asian hub carriers.
Malaysia, which has an affiliation with Air France /KLM, would provide a good and increasingly well-run Asian hub carrier if the mergers were successful and the new enlarged group wanted to start filling in the gaps in a global vision.
The other aspect of the mergers – if they happen – would be the potential to expand Jetstar into a global low-cost carrier long-haul brand.
At the short-haul end of the market, the low-cost carrier segment is over-crowded and is already starting to experience some rationalisation and consolidation as the weak players disappear and the stronger players, like Ryanair (which is trying to acquire Aer Lingus), seek to take advantage of the industry pressures and expand.
Creating a global low-cost carrier brand without legacy cost structures and at arm's length from their core brands could, as Qantas has demonstrated in its own operations, provide enormous flexibility, enhanced focus and probably better profitability for BA and Qantas and, if it joined them, Iberia.
Jetstar could, along with Virgin, become the closest thing to a truly global brand the industry has. There would be practical and political obstacles to any fundamental rationalisation of the parent brands and their product offerings. Jetstar, however, could be the vehicle through which real synergies could be realised.
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When thinking about this suggested merger/takeover I wonder if it is more of an issue of ego rather than a necessity....
We all know who keeps telling us that it is something that not only should be done but has to be done.The same person also told us that the APA takeover offer was a good one...
However,I keep thinking of a small owner of a corner general store that runs a very tight ship.He dreams of the power of bulk purchases and economies of scale.....Then he is told about a large supermarket chain wanting to come to town and buying him out but they want him to run the new larger store....
Is this a case of someone wanting to play on a larger stage rather than it being a better outcome for everyone else?
We all know who keeps telling us that it is something that not only should be done but has to be done.The same person also told us that the APA takeover offer was a good one...
However,I keep thinking of a small owner of a corner general store that runs a very tight ship.He dreams of the power of bulk purchases and economies of scale.....Then he is told about a large supermarket chain wanting to come to town and buying him out but they want him to run the new larger store....
Is this a case of someone wanting to play on a larger stage rather than it being a better outcome for everyone else?
Evertonian
When thinking about this suggested merger/takeover I wonder if it is more of an issue of ego rather than a necessity....
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Advisors from the MAC bank? You mean the bank thats just about to fire 300? The same one that went in with Allco (who has gone broke) to buy the Rat with paper money? If that is not giving the fox the key to the hen house I don't know what is.
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Iberia throws the toys out
Alan Kohler
Qantas? BA humbug
Two days after Qantas and British Airways were forced by a leak to confess they were talking about a merger, I think we can safely rule one out.
It’s clear that the Australian government will not allow Qantas to be foreign owned. The only prospect of a proper merger is if the British economy gets so bad that no one cares who owns BA and Qantas can simply acquire it. This is distinctly possible.
But a dual listed company structure, which is what they said they were talking about, would be pointless.
About the only things that could be truly merged would the boards of directors, which might actually be quite worthwhile, saving hundreds of thousands of dollars in board fees. Excellent idea.
Apart from that the brands would remain separate and distinct; each airline would have to have its own management, probably with Willie Walsh and Alan Joyce remaining in their existing jobs; they couldn’t merge their hubs (Sydney and Heathrow) because they are too far away from each other, and there is no need for a merger for them to share maintenance and other activities.
Meanwhile, the head of Spain’s Iberia, Fernando Conte, whom BA has been double dating, has popped up at a Aviation Club lunch in London in a huff, telling his erstwhile suitor to choose: him or me, you cad.
He revealed that he had only been told that BA was flirting with Qantas one hour before the announcement. He agreed with all the analysts that a threesome would be far too complicated, and demanded a meeting with his BA counterpart, Willie Walsh, as soon as possible. The paint will blister.
The only way all this makes any sense is if Willie Walsh and BA chairman Martin Broughton, along with their counterparts at Qantas, Alan Joyce and Leigh Clifford, really want to try to turn the Oneworld codeshare alliance into some kind of massive global merged company.
As well as talking to Iberia, BA has also been talking to American Airlines about a closer relationship, while Qantas has long flirted with Cathay and has lately been talking to Malaysian Airlines (which is not a member of Oneworld).
But getting all the governments to agree to full mergers of their national carriers would be more complicated than the Doha round of GATT. That failed, and so will Oneworld Inc.
Spending time discussing a DLC between and Qantas and BA is nothing but a distraction to management and a waste of money on lawyers.
If the Qantas board believes that the company has no future on its own as an international airline, stuck with a hub at the end of the earth, then it should be clear about that and tell the government that it’s crunch time.
Qantas? BA humbug
Two days after Qantas and British Airways were forced by a leak to confess they were talking about a merger, I think we can safely rule one out.
It’s clear that the Australian government will not allow Qantas to be foreign owned. The only prospect of a proper merger is if the British economy gets so bad that no one cares who owns BA and Qantas can simply acquire it. This is distinctly possible.
But a dual listed company structure, which is what they said they were talking about, would be pointless.
About the only things that could be truly merged would the boards of directors, which might actually be quite worthwhile, saving hundreds of thousands of dollars in board fees. Excellent idea.
Apart from that the brands would remain separate and distinct; each airline would have to have its own management, probably with Willie Walsh and Alan Joyce remaining in their existing jobs; they couldn’t merge their hubs (Sydney and Heathrow) because they are too far away from each other, and there is no need for a merger for them to share maintenance and other activities.
Meanwhile, the head of Spain’s Iberia, Fernando Conte, whom BA has been double dating, has popped up at a Aviation Club lunch in London in a huff, telling his erstwhile suitor to choose: him or me, you cad.
He revealed that he had only been told that BA was flirting with Qantas one hour before the announcement. He agreed with all the analysts that a threesome would be far too complicated, and demanded a meeting with his BA counterpart, Willie Walsh, as soon as possible. The paint will blister.
The only way all this makes any sense is if Willie Walsh and BA chairman Martin Broughton, along with their counterparts at Qantas, Alan Joyce and Leigh Clifford, really want to try to turn the Oneworld codeshare alliance into some kind of massive global merged company.
As well as talking to Iberia, BA has also been talking to American Airlines about a closer relationship, while Qantas has long flirted with Cathay and has lately been talking to Malaysian Airlines (which is not a member of Oneworld).
But getting all the governments to agree to full mergers of their national carriers would be more complicated than the Doha round of GATT. That failed, and so will Oneworld Inc.
Spending time discussing a DLC between and Qantas and BA is nothing but a distraction to management and a waste of money on lawyers.
If the Qantas board believes that the company has no future on its own as an international airline, stuck with a hub at the end of the earth, then it should be clear about that and tell the government that it’s crunch time.
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BMW's a private company so the German government couldn't stop it being sold had the owners been willing to sell. Now if you were talking about French protectionism that would be another matter!
A letter came out today saying the potential new name for the would be merged British Airways - Qantas
BRITAS
BRITAS
The Brittas Empire - Wikipedia, the free encyclopedia
Might be a very appropriate name.
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A year ago, the Australian public would be outraged. Yet another go of flogging of their beloved Roo to another bunch of outsiders, now they are to tired, to worried about their jobs and super and where it is all going to end, to give a Ratz, they could merge it with Zimbabwe Airlines for all they cared at the moment, and of course the QF board are very aware of this, and like the duck on the pond, not much movement above water, but paddling like buggery underneath, in case the public awakes from its slumber, and starts getting restless. It seems our Kevvy though, is not so keen, probably aware that politically it is not real smart, especially when the public finally wake up and the accusations and wailing start. Do we really need to go in with a airline that is riddled with debt, with a country that has always had the habit of talking at us, instead of to us, one would think if it is really the only way out, surely it would be better to join in with our Kiwi cousins adding a Asia carrier, to the trifecta, sharing routes to Asia and beyond, and then fanning out to cover the world. I am only a dumb retired driver, and know nothing about airline routes, other than to fly them, but with the very well documented, antagonistic attitude the two nations share, it does not make for a happy marriage.
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Well the Govt. made it pretty plain today, that the rules re merging are going to very tough. Albanese on the ABC today, stated that the Airline needs to be always available to call to war, (as a troop carrier etc,) that it needs to be available to get Australians out of war zones, natural disasters etc and he is not interested in ringing some CEO overseas for permission to use as such. He also made it quite plain, that the airline MUST be run from Australian soil, that the CEO must be Austalian, and also the majority of staff be Austalian citizens. (I was hoping he would also say that the A/C must be serviced by Australian engineers but alas not). He stated that us being a island nation, it needs to have its own national carrier, for all the reasons above. I imagine BA is going to find most of this unattractive, in fact most will, and perhaps the govt might have to nationalise the airline to a degree again. I personally have no time for the labor party, but have to say they have won me over here.
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Before any marriage takes place, BA will have to find billions of dollars to pay out the pension funds that are currently in existence. They are for the most part seriously underfunded.
How can they do this and still think they can bring net equity to a merger deal with Qantas.
Surely it's just not possible ?
How can they do this and still think they can bring net equity to a merger deal with Qantas.
Surely it's just not possible ?
Bloomberg has been reporting that QF & BA execs arre in HKG dicussing the details of the merger. Now that it's in the open, progress may be a bit faster - I hope not as I don't see many positives for QF.
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Don't worry GB, unless at least two of the following three stakeholder groups; government, shareholders and the unions, come to see merit in any proposed Qantas - BA merger and openly come out and support it, the scepticism created by the APA stuff up is probably enough to see it off.