QF Solution on Offer
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QF Solution on Offer
According to this weekend’s AFR
With a price to earnings ratio of just 7 times, it is little wonder that analysts have run the numbers on a breakdown of Qantas’ assets. Hmmm! spinning off Jetstar is one thing - but selling the frequent flyer programme is something else altogether.
Right now a strong Australian Dollar and continuing industrial action is keeping potential buyers at bay, but it won’t be this way forever. QAN’s billon dollar cash holdings and cheap valuation will become increasingly attractive to Private Equity if the Chinese economy cools and our resources backed $ depreciates accordingly.
If the workforce doesn’t have a seat at the table when the next Bid happens, expect that what is being proposed by AJ will seem relatively sanguine.
Right now, personaly believe that an employee backed bid by Australian led investors is a solution on offer.
Hopefully it is something the Aviation Unions are also on to.
QAN’s YTD performance is down 41.14% and is a ‘break up play’..
Right now a strong Australian Dollar and continuing industrial action is keeping potential buyers at bay, but it won’t be this way forever. QAN’s billon dollar cash holdings and cheap valuation will become increasingly attractive to Private Equity if the Chinese economy cools and our resources backed $ depreciates accordingly.
If the workforce doesn’t have a seat at the table when the next Bid happens, expect that what is being proposed by AJ will seem relatively sanguine.
Right now, personaly believe that an employee backed bid by Australian led investors is a solution on offer.
Hopefully it is something the Aviation Unions are also on to.
BUY THE COMPANY.
I posted this earlier.
So how can the unions fight? In all honestly I believe this is a no win situation the way it is being fought. I have said it all along and will say it again - BUY THE COMPANY.
Qantas has about 33,000 employees. Market Cap ($M):3,364 Equiv. Shares (M): 2,265. Share price Average $1.50.
Through the union, set up a super fund which invests in qantas, and redirect other super funds into Qantas shares. The entire value of Qantas equates to $101,000 per employee. I know many employees that would be capable of buying that level of shares.
With redirected superannuation I calculate that approximately $30,000 per employee and we would have control of the company.
AS for SQ and EK. Different animals. SQ competes on service. EK competes because (a) it pays the majority of its staff absolutely peanuts in Dubai Pesos under some of the worst non-union protection (b) EK buys a lot of its fuel and a substantially lower price (c) EK has low interest Government funding/loans (d) IT pays no tax (including income tax/GST/Carbon Tax/payroll tax). Reality is EK is a glossed up LCC. Sat in a EK 777 with 10 across seating?
Qantas will NEVER be able to compete with Emirates. This is not QF's fault.
Qantas must compete by offering a better route network and yes maybe joint ventures are the way to go WITHOUT killing off Australian jobs
Unless everybody buys some Qantas shares (AND TAKES CONTROL) this rott at the top will continue to fester. Each and every Qantas employee could use margin loans to buy $30,000 of QAN shares. This would mean a cash investment of $9000 per head, on average. (Loans available at 70% of share price) With redirection of super funds into QAN shares we would take control
Wake up. I have been preaching this for ages and I wonder if Qantas employees really believe in Qantas and are as passionate as they pretend.
I am advocating investment, not donation. This is a tax effective, deductible investment that will save Qantas and ultimately be a profit making excercise
So how can the unions fight? In all honestly I believe this is a no win situation the way it is being fought. I have said it all along and will say it again - BUY THE COMPANY.
Qantas has about 33,000 employees. Market Cap ($M):3,364 Equiv. Shares (M): 2,265. Share price Average $1.50.
Through the union, set up a super fund which invests in qantas, and redirect other super funds into Qantas shares. The entire value of Qantas equates to $101,000 per employee. I know many employees that would be capable of buying that level of shares.
With redirected superannuation I calculate that approximately $30,000 per employee and we would have control of the company.
AS for SQ and EK. Different animals. SQ competes on service. EK competes because (a) it pays the majority of its staff absolutely peanuts in Dubai Pesos under some of the worst non-union protection (b) EK buys a lot of its fuel and a substantially lower price (c) EK has low interest Government funding/loans (d) IT pays no tax (including income tax/GST/Carbon Tax/payroll tax). Reality is EK is a glossed up LCC. Sat in a EK 777 with 10 across seating?
Qantas will NEVER be able to compete with Emirates. This is not QF's fault.
Qantas must compete by offering a better route network and yes maybe joint ventures are the way to go WITHOUT killing off Australian jobs
Unless everybody buys some Qantas shares (AND TAKES CONTROL) this rott at the top will continue to fester. Each and every Qantas employee could use margin loans to buy $30,000 of QAN shares. This would mean a cash investment of $9000 per head, on average. (Loans available at 70% of share price) With redirection of super funds into QAN shares we would take control
Wake up. I have been preaching this for ages and I wonder if Qantas employees really believe in Qantas and are as passionate as they pretend.
I am advocating investment, not donation. This is a tax effective, deductible investment that will save Qantas and ultimately be a profit making excercise
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So how can the unions fight? In all honestly I believe this is a no win situation the way it is being fought. I have said it all along and will say it again - BUY THE COMPANY.
Qantas will NEVER be able to compete with Emirates. This is not QF's fault.
Qantas must compete by offering a better route network and yes maybe joint ventures are the way to go WITHOUT killing off Australian jobs
Qantas must compete by offering a better route network and yes maybe joint ventures are the way to go WITHOUT killing off Australian jobs
Even JQ is ridding itself of the QANTAS name.
Wake up. I have been preaching this for ages and I wonder if Qantas employees really believe in Qantas and are as passionate as they pretend.
I am advocating investment, not donation.
I am advocating investment, not donation.
Anyway, if all employees were to take up arms and buy an allotted amount of shares, who would be appointed as the management team to run QF? I could imagine the fighting over who is going to take control. Will it be the pilots? Engineers? Cabin crew? Cleaners? Check-in? Would it be a rotating term of managment?
It all sounds great, but I have seen how people within a crew carry on with one another. Imagine it at an upper level like running the company.
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An Excellent Idea But....
Trying to organize 30000 people to buy out Qantas would be a logistical nightmare.There are 16 unions .They would all need to be on the same page for this to work.A lot of Egos to deal with
Originally Posted by 1a sound asleep
Through the union, set up a super fund which invests in qantas, and redirect other super funds into Qantas shares.
Ignoring the requirements under the Superannation Industry (Supervision) Act 1993 on investments in the shares and property of employer sponsors of funds, having ALL of your Super invested in the future of your current employer is a great, "No Risk" solution! 
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1a,
I think you are dreaming if you think employees will be able to buy the company or enough shares to control the company at the current market cap. Where do you think the shares are gonna come from? Most people holding Qantas stock now are losing money and I doubt they would sell for anything under $2.50ish. A successful bid would need to be pitched at the $3 to $3.50 range IMO. You can have my shares for $2.80 a piece!
I think you are dreaming if you think employees will be able to buy the company or enough shares to control the company at the current market cap. Where do you think the shares are gonna come from? Most people holding Qantas stock now are losing money and I doubt they would sell for anything under $2.50ish. A successful bid would need to be pitched at the $3 to $3.50 range IMO. You can have my shares for $2.80 a piece!
Theres no reason the right structure wouldn't comply with the Superannuation Industry (Supervision) Act
$2.80 a share?what you want an instant almost 100% profit, talk about greedy.
As I illustrated earlier nothing to stop individual employees using margin loans to buy QAN shares. Sure the share price will rise and that will mean an instant profit for those that got in at $1.47.
All too hard? Yeah it is for most who want to sit back and hope it will all get better. Well it wont happen like that I am afraid.
You have to accept that the desire to smash apart the unions and break up the airline into bits comes from the board. And the board is only controlled by the shareholders. If you have no shares you have no say.
A huge group of united employees with shares could easily force control
$2.80 a share?
what you want an instant almost 100% profit, talk about greedy.As I illustrated earlier nothing to stop individual employees using margin loans to buy QAN shares. Sure the share price will rise and that will mean an instant profit for those that got in at $1.47.
All too hard? Yeah it is for most who want to sit back and hope it will all get better. Well it wont happen like that I am afraid.
You have to accept that the desire to smash apart the unions and break up the airline into bits comes from the board. And the board is only controlled by the shareholders. If you have no shares you have no say.
A huge group of united employees with shares could easily force control
Last edited by 1a sound asleep; 22nd Oct 2011 at 14:43.
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In no particular order, please consider the following clarifications to the above posts:
· Any employee backed shareholding strategy doesn’t need to acquire 100% of QAN to change the strategy management are presently pursuing, but preventing the set up of ‘Fantasia’ and halting the demise of Qantas International would need to be accepted as central to any new business plan,
· Employee shareholders would not assume responsibility for the role of management and running QF. That said, employee shareholders with a substantial holding can probably get appointed Director Representatives who could then partner with other aligned Directors to develop alternative strategy and policy. I.e. it would still fall to Management and the Unions to agree enterprise changes acceptable to both the ‘New Owners’ and the Workforce,
· A quick look at other takeover bids suggests that the prevailing share price jumps by around 50% when a bid is formally announced,
· Not only does it work for South West, more importantly, it would facilitate an overarching strategy with the potential to unite, Government, Shareholders & Staff. Without it, agree with the sentiment that a no win outcome is all but certain for all involved.
Doesn’t really matter if such an initiative is commenced by enlighten management, troubled shareholders or concerned staff, as ultimately all will need to support it if Qantas is to be turned around and a new course charted.
· Any employee backed shareholding strategy doesn’t need to acquire 100% of QAN to change the strategy management are presently pursuing, but preventing the set up of ‘Fantasia’ and halting the demise of Qantas International would need to be accepted as central to any new business plan,
· Employee shareholders would not assume responsibility for the role of management and running QF. That said, employee shareholders with a substantial holding can probably get appointed Director Representatives who could then partner with other aligned Directors to develop alternative strategy and policy. I.e. it would still fall to Management and the Unions to agree enterprise changes acceptable to both the ‘New Owners’ and the Workforce,
· A quick look at other takeover bids suggests that the prevailing share price jumps by around 50% when a bid is formally announced,
· Not only does it work for South West, more importantly, it would facilitate an overarching strategy with the potential to unite, Government, Shareholders & Staff. Without it, agree with the sentiment that a no win outcome is all but certain for all involved.
Doesn’t really matter if such an initiative is commenced by enlighten management, troubled shareholders or concerned staff, as ultimately all will need to support it if Qantas is to be turned around and a new course charted.
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1a,
$2.80 per share may be an instant 100% profit for some, but not me mate. I have been a large shareholder for years (not just a token amount of shares like some of these crazy employees who actually think they should control the company) and participated in all capital raisings, so I'd be happy to just get my money back mate because its people like me that have funded this business that has kept people like you employed for years. Some of your colleagues on this forum even call airline investors 'morons' would you believe! The only morons around here are the vandals associated with these unions destroying their own jobs. Answer my question, where do you reckon most of these invisible shares are going to come from in this proposed takeover bid by employees without paying a big premium? **The book value as at Jun 2011 is $2.67. Qantas carry's its fleet of aircraft and engines at about $10b. The real value of their fleet is closer to $5b. If we say $2b of the $10b is engines, then QF are probably carrying $2-3b more in aircraft value Vs real commercial value on their balance sheet or around $1.30 per share. So the adjusted book value ought to be more like $1.40 per share PLUS the frequent flyer business.
Therefore you can forget your pipe dream plan of gaining control at these levels!
NP
**Numbers published by Macquarie Private Wealth.
$2.80 per share may be an instant 100% profit for some, but not me mate. I have been a large shareholder for years (not just a token amount of shares like some of these crazy employees who actually think they should control the company) and participated in all capital raisings, so I'd be happy to just get my money back mate because its people like me that have funded this business that has kept people like you employed for years. Some of your colleagues on this forum even call airline investors 'morons' would you believe! The only morons around here are the vandals associated with these unions destroying their own jobs. Answer my question, where do you reckon most of these invisible shares are going to come from in this proposed takeover bid by employees without paying a big premium? **The book value as at Jun 2011 is $2.67. Qantas carry's its fleet of aircraft and engines at about $10b. The real value of their fleet is closer to $5b. If we say $2b of the $10b is engines, then QF are probably carrying $2-3b more in aircraft value Vs real commercial value on their balance sheet or around $1.30 per share. So the adjusted book value ought to be more like $1.40 per share PLUS the frequent flyer business.
Therefore you can forget your pipe dream plan of gaining control at these levels!
NP
**Numbers published by Macquarie Private Wealth.
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Macquarie Bank
As we all know Macquarie Bank are never wrong about anything and everything.Warren Buffett has often said that airlines are a poor investment.There are those that believe that unions are responsible for Qantas' woes.Unions are not responsible for the purchase of aircraft or the development of a network or the cost of borrowings.In fact unions make no managerial decisions whatsoever.The only cost that unions seek to influence is the cost of labour.The cost of fuel and the purchase cost of aircraft are outside their jurisdiction.
The total cost of labour for the Qantas business is 16% and has been declining for the last 10 years.
The wages bill for the Qantas Exco and the board are substantial and much higher than a comparable size airline.
The trouble at Qantas has its roots in the merger with Australian and the subsequent loss of operational expertise.Many of the executives now running Qantas were at the helm of Ansett when it folded .They are now weaving their magic at Qantas.One only has to look at Virgin and its accomplishment of the last 12 months to recognize the ability of a very competent CEO.
If John Borghetti was running Qantas it would not be in the mess that it now finds itself.
Scapegoating the unions for management incompetence is the oldest cliched spin on the planet.There are still those naive enough to believe it
The total cost of labour for the Qantas business is 16% and has been declining for the last 10 years.
The wages bill for the Qantas Exco and the board are substantial and much higher than a comparable size airline.
The trouble at Qantas has its roots in the merger with Australian and the subsequent loss of operational expertise.Many of the executives now running Qantas were at the helm of Ansett when it folded .They are now weaving their magic at Qantas.One only has to look at Virgin and its accomplishment of the last 12 months to recognize the ability of a very competent CEO.
If John Borghetti was running Qantas it would not be in the mess that it now finds itself.
Scapegoating the unions for management incompetence is the oldest cliched spin on the planet.There are still those naive enough to believe it
Last edited by Crossing Guard; 23rd Oct 2011 at 06:03.
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Crossing,
All investments are poor investments if one pays too much for them. Rather, QF will prove to be a good rebound opportunity in time from these levels (no doubt well and truly missed by all union members on this forum). Buffett also says be greedy when others are fearful.
NP
All investments are poor investments if one pays too much for them. Rather, QF will prove to be a good rebound opportunity in time from these levels (no doubt well and truly missed by all union members on this forum). Buffett also says be greedy when others are fearful.
NP
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New Piper
Lets revisit this conversation in 12 months time...and commiserate
Lets not confuse fear with commonsense
Your Buffett quote was not made by him in relation to Aviation
Lets not confuse fear with commonsense
Your Buffett quote was not made by him in relation to Aviation
Last edited by Crossing Guard; 23rd Oct 2011 at 07:54.
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so I'd be happy to just get my money back mate because its people like me that have funded this business that has kept people like you employed for years. Some of your colleagues on this forum even call airline investors 'morons' would you believe! The only morons around here are the vandals associated with these unions destroying their own jobs.
Long before the greedy investors like yourself came in and stuffed QANTAS, it was government owned and run. Not a brand. A company that had control on everything that went on in it and made smart decisions on the aircraft it flew.
If investors had half a brain, they wouldn't invest in the share market and hope to make a quick buck. That's what race tracks and pokies are for.
It appears that as an investor, you have the God given right to dictate to a company and its employees. Without employees, and competent ones at that, there would be no business and "investors" like yourself would not be able to make money off the backs of those employees.
As has been mentioned, the employees and unions don't make incompetent decisions that drive a share price down, and yet reward the board of directors for either their incompetence or deliberate sabotage of a company to drive its share price down so that it is ripe for the picking, whilst lining their own pockets.
If you want to believe in your own self-importance, that's your prerogative.
Maybe one should look at Richard Branson's ethics. Customers and investors come second in the business. Employees come first. Without happy employees, you will not have happy customers or investors. Voila, QANTAS.
Once again, if you don't like your QANTAS investment, sell up, cut your losses and get out of our faces. Otherwise, get a seat on the board of directors and make some decisions. You have the same mentality as our current regime of imbeciles and would fit in perfectly.
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It appears that as an investor, you have the God given right to dictate to a company and its employees.
Correct.
The shareholders own the company.
The employees work for the shareholders.
God has nothing to do with it.
Correct.
The shareholders own the company.
The employees work for the shareholders.
God has nothing to do with it.
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and everyone has a big mouth and is full of ideas until the **** hits their fan.
I will say it again: management spin about competing globally means you go down to the lowest common denominator. That ultimately means health care, pensions everything. We or even the western industrialised world cannot compete with China and we shouldn't try.
Australian wages and product pricing takes into account the social infrastructure in place in Australia as prices do in China, i.e. there ain't no social infrastructure.
Qantas today, NAB tomorrow. Think about it.
I will say it again: management spin about competing globally means you go down to the lowest common denominator. That ultimately means health care, pensions everything. We or even the western industrialised world cannot compete with China and we shouldn't try.
Australian wages and product pricing takes into account the social infrastructure in place in Australia as prices do in China, i.e. there ain't no social infrastructure.
Qantas today, NAB tomorrow. Think about it.
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It appears that as an investor, you have the God given right to dictate to a company and its employees.
Correct.
The shareholders own the company.
The employees work for the shareholders.
God has nothing to do with it.
Correct.
The shareholders own the company.
The employees work for the shareholders.
God has nothing to do with it.
Even as a shareholder, you don't get to have much of a say. Even if you were to oppose the remuneration package of the directors, they will see fit to pay themselves.
Here is a snippet from QANTAS to its shareholders dated 26 September 2011:
"The 2011 Remuneartion Report is contained in the Directors' Report set out from page 36 of the 2011 Annual Report. The Report explains Qantas' Executive Remuneration Objectives and Approach, which are to:
- attract, retain and appropriately reward a capable Executive team;
- motivate the Executive team to meet the unique challenges Qantas faces as a major international airline based in Australia; and
- link remuneration to performance.
Therefore, the Directors recommend that you vote in favour of the Advisory Resolution to adopt the Remuneration Report for the year ended 30 June 2011.
Yours sincerely
Leigh Clifford AO"
The above three points indicate that the Executive is not capable and should not be retained. QANTAS faces the same challenges as Virgin Australia, being based in Australia. Remuneration of the directors should be cut if linked to performance, as the share price has dived and there have been no returns to the valued shareholders for the last few years.
Were the shareholders asked if the CEO could get a 71% pay increase or the rest of the board for that matter? Do the shareholders have a say in the type of aircraft chosen to fly? Do the shareholders have a say in how the company is run? No. No and No.
With the management's ideas and the shareholders' money, the management can blow it any way they want, and it costs them nothing, leaving shareholders like yourself in the dark and waiting for a return on their declining investment.
If you think employees work for the shareholders. Sure. I'm happy to take your money every fortnight and put it in my pocket. My paypacket doesn't change, regardless of the share price. God has nothing to do with that either.
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QF94,
Its an attitude like yours that will drive the investor celebrations when your job or the jobs of people like you become 'offshored' and that is only a matter of time. Angry souls have no place in a business like Qantas.
Best you get your resume in order if not already done so, pretty soon you are going to need it!
NP
Its an attitude like yours that will drive the investor celebrations when your job or the jobs of people like you become 'offshored' and that is only a matter of time. Angry souls have no place in a business like Qantas.
Best you get your resume in order if not already done so, pretty soon you are going to need it!
NP
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For your consideration.
The philosophy of ownership is intended as an alternative to 100 years of Australian adversarial industrial negotiations. It has at its heart, employee voice/participation, productivity and a fair share of enterprise contribution put at risk by shareholders and employees alike. It is not a panacea for all that one doesn’t like about where Qantas is going, but it is a concept that has saved a lot of companies and jobs in the UK & the US.
Yes, I do admit that Australia’s industrial system got us by quite OK; right up until we found ourselves in the deep end of globalisation - a genie no one has been able to put back in the bottle.
Experience elsewhere in the world has shown that employee shareholders are able to influence company policy and strategy and right now it is QF’s strategy that is underpinning all the angst. That said, there is a world of difference between turning Qantas around and using the current Qantas situation to fight legitimate concerns about the unintended consequences of globalisation.
To be frank, why would Government/Shareholders do the heavy lifting necessary to save Qantas International if QF’s own employees won’t get behind a strategy that has the potential to save their jobs by bringing together Government, Shareholders and Staff.
The philosophy of ownership is intended as an alternative to 100 years of Australian adversarial industrial negotiations. It has at its heart, employee voice/participation, productivity and a fair share of enterprise contribution put at risk by shareholders and employees alike. It is not a panacea for all that one doesn’t like about where Qantas is going, but it is a concept that has saved a lot of companies and jobs in the UK & the US.
Yes, I do admit that Australia’s industrial system got us by quite OK; right up until we found ourselves in the deep end of globalisation - a genie no one has been able to put back in the bottle.
Experience elsewhere in the world has shown that employee shareholders are able to influence company policy and strategy and right now it is QF’s strategy that is underpinning all the angst. That said, there is a world of difference between turning Qantas around and using the current Qantas situation to fight legitimate concerns about the unintended consequences of globalisation.
To be frank, why would Government/Shareholders do the heavy lifting necessary to save Qantas International if QF’s own employees won’t get behind a strategy that has the potential to save their jobs by bringing together Government, Shareholders and Staff.
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*sigh* I know we are not meant to feed trolls
New Piper:
Your continual 'glee' at the prospect of Australians losing jobs,having jobs off-shored is utterly disgusting.
I have a family to support,a mortgage and I may be facing that exact prospect. I have worked hard for QF and should get some of the loyalty back from management that I have shown them.
I don't really care if you are who you say -some 'investor of magnitude' or if you are just some QF management idiot trying to get a rise out of people on here.
Your attitude is totally un-Australian,and so totally wrong in so many ways.
To think that someone would revel in the fact that others may lose their jobs,and then wave it in their faces
You are a repulsive human being.
New Piper:
Your continual 'glee' at the prospect of Australians losing jobs,having jobs off-shored is utterly disgusting.
I have a family to support,a mortgage and I may be facing that exact prospect. I have worked hard for QF and should get some of the loyalty back from management that I have shown them.
I don't really care if you are who you say -some 'investor of magnitude' or if you are just some QF management idiot trying to get a rise out of people on here.
Your attitude is totally un-Australian,and so totally wrong in so many ways.
To think that someone would revel in the fact that others may lose their jobs,and then wave it in their faces
You are a repulsive human being.