QANTAS - WHERE TO NOW?
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Guess who cares about their customers.
Flew DJ yesterday, today get a detailed survey asking about the experience and willingly answered. Pity they didn't ask about Jetstar experience because I would have gladly advised I refuse to fly with them at any price.
Last time I heard from QF...who knows, which just about says it all.
Flew DJ yesterday, today get a detailed survey asking about the experience and willingly answered. Pity they didn't ask about Jetstar experience because I would have gladly advised I refuse to fly with them at any price.
Last time I heard from QF...who knows, which just about says it all.
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Last time I heard from QF...who knows, which just about says it all
Guess who cares about their customers.
Flew DJ yesterday, today get a detailed survey asking about the experience and willingly answered. Pity they didn't ask about Jetstar experience because I would have gladly advised I refuse to fly with them at any price.
Last time I heard from QF...who knows, which just about says it all.
Flew DJ yesterday, today get a detailed survey asking about the experience and willingly answered. Pity they didn't ask about Jetstar experience because I would have gladly advised I refuse to fly with them at any price.
Last time I heard from QF...who knows, which just about says it all.
Great piece here
Qantas gives Hickey a hospital handpass | Stephen Bartholomeusz | Commentary | Business Spectator
The extent of the challenge Alan Joyce has handed Simon Hickey became clear today with the shock disclosure that Qantas International is generating a destabilising deluge of red ink that will nearly wipe out the Qantas group’s earnings this year.
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The situation - some serious reflection by the board and management is required
Good to see the press is now asking questions for a change... I think it will indeed be a long weekend for LC & some on the board.... the pressure is mounting...
and
Where to now?
Merge JQ into QF with a new management team..... probably the best quick option for a rapid turnaround of fortunes. At least it's positive and would probably be well received by the punters.... Red tailed 787s, first....
the current crisis in confidence among Qantas investors is a situation that will require some serious reflection by the board and management about what they are doing wrong in the eyes of many shareholders who appear to have lost faith in the company's strategy.
and
What is new, and is now the biggest threat to the airline, is the damage to its brand. The big winners have been its competitors, which are making strong inroads as Qantas continues to pare back its international routes and has a schizophrenic Asian strategy.
The Qantas story is one the market no longer believes despite having
billions in cash and a strong number of businesses, including a dominant market share in Australia. This is the country's national carrier, it is the backbone of the multibillion-dollar tourism industry and for that a solution needs to be found - fast.
The Qantas story is one the market no longer believes despite having
billions in cash and a strong number of businesses, including a dominant market share in Australia. This is the country's national carrier, it is the backbone of the multibillion-dollar tourism industry and for that a solution needs to be found - fast.
Where to now?
Merge JQ into QF with a new management team..... probably the best quick option for a rapid turnaround of fortunes. At least it's positive and would probably be well received by the punters.... Red tailed 787s, first....
Last edited by TIMA9X; 10th Jun 2012 at 16:24.
I would not be surprised if you are going to see a trading halt on Qantas on Tuesday morning, followed by a takeover bid by the APA boyze, including Dixon and Packer, and with Macquarie Bank as advisor.
That will also include the forcing of Minister Albanese and Prime Minister Gillard to vary the Qantas Sale Act under threat of losing 30,000 jobs. I wonder if Qantas lawyers have drafted the amendment and it is already on the desks of the appropriate departmental staff? (that is so Gillard and Albanese can truthfully claim "no knowledge" of it on Tuesday)
They tried to get it at $5.60, perhaps they are trying again at 96 cents. Ownership by Packer would dovetail nicely with his plans for dozens of casinos across Australia. Qantas brings in the Chinese punters direct and the gambing can even start on the aircraft once its out of Chinese airspace.
I will leave it up to you to decide whether Qantas managers are knaves or fools. It has to be one or the other.
My expectation is that a revamped Qantas is worh upwards of $3.00 per share if you rolled Jetstar back in, cut the bullshyte associated with too many layers of management, announced a complete rejig of its strategic plan as well as all its EBA's and outsourcing plans. That is simply based on QF performing as well as the S&P ASX 200.
The MBA/HR model for that is "freeze, unfreeze,refreeze" a new Board and management team would have a credit balance of trust if the right people were appointed and enough goodwill to start again with earning the support of staff and customers.
Needless to say, the people who brought Qantas to this are not the ones who can get it out of the mess, if that is their intention. The question remains; are the current Board and management knaves or fools?
I also wonder if anyone has shorted Qantas? I would like to know if anyone has borrowed institutional shareholdings for that purpose? I wonder if this whole debacle is orchestrated or not? I never liked the APA bid, I thought it stank and said so at the time. This situation may start to smell the same.
That will also include the forcing of Minister Albanese and Prime Minister Gillard to vary the Qantas Sale Act under threat of losing 30,000 jobs. I wonder if Qantas lawyers have drafted the amendment and it is already on the desks of the appropriate departmental staff? (that is so Gillard and Albanese can truthfully claim "no knowledge" of it on Tuesday)
They tried to get it at $5.60, perhaps they are trying again at 96 cents. Ownership by Packer would dovetail nicely with his plans for dozens of casinos across Australia. Qantas brings in the Chinese punters direct and the gambing can even start on the aircraft once its out of Chinese airspace.
I will leave it up to you to decide whether Qantas managers are knaves or fools. It has to be one or the other.
My expectation is that a revamped Qantas is worh upwards of $3.00 per share if you rolled Jetstar back in, cut the bullshyte associated with too many layers of management, announced a complete rejig of its strategic plan as well as all its EBA's and outsourcing plans. That is simply based on QF performing as well as the S&P ASX 200.
The MBA/HR model for that is "freeze, unfreeze,refreeze" a new Board and management team would have a credit balance of trust if the right people were appointed and enough goodwill to start again with earning the support of staff and customers.
Needless to say, the people who brought Qantas to this are not the ones who can get it out of the mess, if that is their intention. The question remains; are the current Board and management knaves or fools?
I also wonder if anyone has shorted Qantas? I would like to know if anyone has borrowed institutional shareholdings for that purpose? I wonder if this whole debacle is orchestrated or not? I never liked the APA bid, I thought it stank and said so at the time. This situation may start to smell the same.
Last edited by Sunfish; 10th Jun 2012 at 21:23.
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sunfish
I also wonder if anyone has shorted Qantas? I would like to know if anyone has borrowed institutional shareholdings for that purpose?
Numbers below for QAN shorts for 7/6/12. No big deal, certainly not compared to the massive turnover of stock. Less than I expected at 0.25% of issued stock ~ 5.7 million of the 2.26 billion shares on issue.
There are other derivatives such as CFDs and ETOs of course. This is just one day also and the big shorters may well have left the market.
QAN QANTAS AIRWAYS LIMITED FPO 5,788,981 2,265,123,620 .25
Numbers below for QAN shorts for 7/6/12. No big deal, certainly not compared to the massive turnover of stock. Less than I expected at 0.25% of issued stock ~ 5.7 million of the 2.26 billion shares on issue.
There are other derivatives such as CFDs and ETOs of course. This is just one day also and the big shorters may well have left the market.
QAN QANTAS AIRWAYS LIMITED FPO 5,788,981 2,265,123,620 .25
Sunfish: I was firmly in the knaves camp, but find myself further towards the fools side. They are doing deals which they think is their expertise, but surely first and formost they are paid BUSINESS executives.
The nonstop rape of anything of worth and anyone of talent leaves precious little left to work on after the great breakup/sale.
There is not a single competent decision these idiots have made that would give me any confidence that anyone they have even met would know how to run a 5c lemonade stand at a school fete.
Assume whoever reads this was in Packers shoes. His father was justifiably scared of losses and particularly airlines. Yes James is in tourism so that fits, but undeniably he is an expert in Casinos having grown up with them and therefore knows what customers want - instinctively.
Would anyone who reads this (except maybe the penultimate slimeball Olivia) trust anyone who has had anything to do with managing QF over the last 10years? Even if you were friends of Dixon, you would have to question, wouldn't you?
If they meant to totally trash the brand and wreck the place, surely they have a way to fix it? Therein lies my 'knaves' problem... These idiots have proved their expertise is in nothing more than renovating rooms to a standard Alan feels he can eat lunch in every day. How on earth can you see these guys having anything to do with any Pheonix/ashes like activity in any business at all, let alone a highly complex one like Qantas?
The nonstop rape of anything of worth and anyone of talent leaves precious little left to work on after the great breakup/sale.
There is not a single competent decision these idiots have made that would give me any confidence that anyone they have even met would know how to run a 5c lemonade stand at a school fete.
Assume whoever reads this was in Packers shoes. His father was justifiably scared of losses and particularly airlines. Yes James is in tourism so that fits, but undeniably he is an expert in Casinos having grown up with them and therefore knows what customers want - instinctively.
Would anyone who reads this (except maybe the penultimate slimeball Olivia) trust anyone who has had anything to do with managing QF over the last 10years? Even if you were friends of Dixon, you would have to question, wouldn't you?
If they meant to totally trash the brand and wreck the place, surely they have a way to fix it? Therein lies my 'knaves' problem... These idiots have proved their expertise is in nothing more than renovating rooms to a standard Alan feels he can eat lunch in every day. How on earth can you see these guys having anything to do with any Pheonix/ashes like activity in any business at all, let alone a highly complex one like Qantas?
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It really is time for the unions, all the unions, to get a appeal to the public out there. They have endless material of the companies part in the history of the country, to make Australians feel what the 
is going on here. Just one ad, could cause the country to have a second look at the management. Even though all unions are well and truly on the nose, you can tell by the media features it is slowly dawning on them, that it is not all the staff and unions fault, that something is badly amiss. They need to play it for all that its worth and right now, while Joyce and Clifford are on the ropes. Get moving guys.
is going on here. Just one ad, could cause the country to have a second look at the management. Even though all unions are well and truly on the nose, you can tell by the media features it is slowly dawning on them, that it is not all the staff and unions fault, that something is badly amiss. They need to play it for all that its worth and right now, while Joyce and Clifford are on the ropes. Get moving guys.
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I'm reading Plane Talking this morning as saying that Cathay Pacific is telling Joyce that if he goes ahead with Jetstar Hong Kong it will set up an Australia based airline that will have the sole purpose of destroying Qantas in revenge.
Qantas at IATA, Joyce about to get 'annihilation' message | Plane Talking
Qantas at IATA, Joyce about to get 'annihilation' message | Plane Talking
When things are going well the union mentality is "I show up to work so I should get a bonus."
Correct me if i'm wrong but doesn't that seem to describe the Alan Joyce and QF Board mentality not the unions?
Correct me if i'm wrong but doesn't that seem to describe the Alan Joyce and QF Board mentality not the unions?
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Alan Joyce is Sol Trujillo the second
The public held nothing but hatred for Sol after they realised the absolute damage that he did to the company, both financial and reputation.
Alan will go down the same path.
The medium of media can make it happen. Vote 1 for union ads. Now is the time for change.
I have a dream..
Alan will go down the same path.
The medium of media can make it happen. Vote 1 for union ads. Now is the time for change.
I have a dream..
Not quite true in my opinion. Trujillo simply adopted the American business strategy of lobbying/pressuring Government to change their business environment, thereby making more money. That failed in Australia becuase our public service is more robust.
I don't think Qantas can do that any more.
I don't think Qantas can do that any more.
denabol:
I posted this last July:
I'm reading Plane Talking this morning as saying that Cathay Pacific is telling Joyce that if he goes ahead with Jetstar Hong Kong it will set up an Australia based airline that will have the sole purpose of destroying Qantas in revenge.
"Exploiting Asian Markets" - Irish Suicide.
The CEO of Qantas has apparently said words to the effect that Qantas is going to "Exploit rapidly growing Asian markets."
I am so incensed by the lunacy of The Qantas Board and Management that I will go on record now and say that there is not a snowballs chance in hell that Qantas is going to: "Exploit rapidly growing Asian markets."
That is an Asian market and it is going to be exploited by Asians for Asians and to the benefit of Asian shareholders.
The only "impact" that Qantas is going to make on that market is a small stain on an Asian mattress someplace where Qantas shareholders cried themselves to sleep after losing their entire capital on an unprofitable failed Asian joint venture.
Pardon my French, but FFS, the history of Western investment in "Asian Markets" is a ******* cemetery of failed business ventures where the West has been efficiently skinned by their erstwhile Asian partners. Jetstars adventures in Vietnam should have been an absolute warning to them.
It takes what are called "Old China Hands" at least Thirty years of trading experience to engage profitably with China and the East, and this little Irish bowel movement thinks he can just walk in and make off with some profits?
Here is what is going to happen to you Alan;
1) You are going to be encouraged by your Asian partners to invest every bit of spare cash you have, or you can borrow, in your Asian operations.
2) You are going to be encouraged to invest your management time in your Asian operations to the exclusion of everything else.
3) You will be encouraged to move as much of your operations and employees to Asia as is physically possible.
4) In support of this strategy, you will be wined and dined by everyone from the Asian Government and business community from the top down. The continuous mantra being thrown in your direction will be "huge Asian markets."
5) At some point a few years from now, a stock market analyst will sound a warning that Qantas is now balls deep in Asia and that any downturn or disturbance in Asian markets will severely impact not just the Qantas International markets, but the Qantas Domestic market, which by then will have been "rearranged" to have synergies with the new you beaut Qantasia International (read deep discounts for Asian travelers plus Asian maintenance and crews, etc.).
6) The warnings won't be heeded. Remaining institutional investors who were wondering exactly what the Qantas sustainable competitive advantage in Asia really was will quietly exit. Qantas will start borrowing from the banks, who are always too stupid to see where companies are heading.
7) Within a year the cupboard is bare. Qantas is in hock to its eye teeth and still waiting for profits to be generated by the "huge Asian Markets". The revenue will be there, its just that everyone (the Asian partner, airports, lessors, maintenance organisations, manufacturers, finance houses, fuel suppliers, catering, ATC, etc. etc) seems to be making a dollar or two of profit except Qantas. Funny that.
8) Getting desperate for cash, Qantas tries to rearrange its finances and perhaps repatriate some funds to Australia.... and runs smack into a concrete wall of uncompromising Asian Governments, regulators, financial institutions and a less than helpful but"Oh so sorry" Asian "Partner".
Perhaps you like to sell your business? We make you velly good offer?
The Qantas Sale Act will be no help because there is nothing left to sell.
That is what is going to happen to Qantas Alan. You have absolutely no experience whatsoever in operating in Asian markets and neither has Qantas apart from flying in, filling up and departing, yet you think that running an LCC operation in a bog in Ireland is suitable experience for operating to the shores of the Middle Kingdom?
Take the old Asian custom of "gifts" also know in vulgar terms as kickbacks. How are you going to deal with the necessity of those Alan? Australian law prohibits them, but I guess that the Qantas auditors and your own "robust internal processes" will keep you safe.
Well, except that they didn't, did they?
Qantas one of 11 airlines fined $1.1 billion for rigging cargo prices | The Australian
Quote:
The fine comes three years after Qantas was fined $40 million for price-fixing in the North American air cargo market.
In 2008, Qantas also agreed to pay a fine of $20 million under a deal reached with the Australian Competition and Consumer Commission over the European price-fixing cartel.
Never mind Alan, the Board knows how to deal with the thorny problem of Asian business customs. They will keep you safe. Leigh Clifford comes from Rio Tinto. They know all about Chinese corruption don't they?
Rio Tinto mops up after China bribery mess | The Australian.
So how are you going to do the "exploiting" Alan? Tell us about the mass of trained Qantas managers who know instinctively what to do when there appear to be employees on the payroll that have never been seen; when invoices appear that cannot be reconciled. What happens when you discover that the security guards on your stores and property exist to prevent you from accessing them after hours when the real business is being conducted? Do you understand that you had better give your Chinese managers about Ten percent of the shareholding lest they be enticed away to your loss? Have you ever had to write on a Six million dollar invoice "Please do not ask for credit as refusal often offends", Alan? Alan? Tell us about your vast experience of the orient! Do you like Chinese food? Is that it?
Somebody should tell this bog Irish idiot that he is not doing business with another Belgium or Holland. He knows nothing about the East - where business is played by rather different rules. Just ask Cathay and Swire, they have only been in the game for what? Two hundred years? ..And you are going to encroach on their territory?
It is perfectly clear who is going to do the "exploiting" in this transaction, and it won't be Qantas. You come to this market with zero expertise, and you are too stupid to understand that you have no understanding of what is required.
...and finally. The Board and management of Qantas keep harping about generating an "acceptable" return on Capital invested in the international business.......
Asia is the home of the concept of "Patient Capital"; exactly how does the long term Asian time horizon sit with your need to generate "Acceptable Returns" every year?
I can tell you right now that it doesn't. Wait till your business partner says: "Yes Alan, I know we are making a loss now, but in Ten years time!"
The CEO of Qantas has apparently said words to the effect that Qantas is going to "Exploit rapidly growing Asian markets."
I am so incensed by the lunacy of The Qantas Board and Management that I will go on record now and say that there is not a snowballs chance in hell that Qantas is going to: "Exploit rapidly growing Asian markets."
That is an Asian market and it is going to be exploited by Asians for Asians and to the benefit of Asian shareholders.
The only "impact" that Qantas is going to make on that market is a small stain on an Asian mattress someplace where Qantas shareholders cried themselves to sleep after losing their entire capital on an unprofitable failed Asian joint venture.
Pardon my French, but FFS, the history of Western investment in "Asian Markets" is a ******* cemetery of failed business ventures where the West has been efficiently skinned by their erstwhile Asian partners. Jetstars adventures in Vietnam should have been an absolute warning to them.
It takes what are called "Old China Hands" at least Thirty years of trading experience to engage profitably with China and the East, and this little Irish bowel movement thinks he can just walk in and make off with some profits?
Here is what is going to happen to you Alan;
1) You are going to be encouraged by your Asian partners to invest every bit of spare cash you have, or you can borrow, in your Asian operations.
2) You are going to be encouraged to invest your management time in your Asian operations to the exclusion of everything else.
3) You will be encouraged to move as much of your operations and employees to Asia as is physically possible.
4) In support of this strategy, you will be wined and dined by everyone from the Asian Government and business community from the top down. The continuous mantra being thrown in your direction will be "huge Asian markets."
5) At some point a few years from now, a stock market analyst will sound a warning that Qantas is now balls deep in Asia and that any downturn or disturbance in Asian markets will severely impact not just the Qantas International markets, but the Qantas Domestic market, which by then will have been "rearranged" to have synergies with the new you beaut Qantasia International (read deep discounts for Asian travelers plus Asian maintenance and crews, etc.).
6) The warnings won't be heeded. Remaining institutional investors who were wondering exactly what the Qantas sustainable competitive advantage in Asia really was will quietly exit. Qantas will start borrowing from the banks, who are always too stupid to see where companies are heading.
7) Within a year the cupboard is bare. Qantas is in hock to its eye teeth and still waiting for profits to be generated by the "huge Asian Markets". The revenue will be there, its just that everyone (the Asian partner, airports, lessors, maintenance organisations, manufacturers, finance houses, fuel suppliers, catering, ATC, etc. etc) seems to be making a dollar or two of profit except Qantas. Funny that.
8) Getting desperate for cash, Qantas tries to rearrange its finances and perhaps repatriate some funds to Australia.... and runs smack into a concrete wall of uncompromising Asian Governments, regulators, financial institutions and a less than helpful but"Oh so sorry" Asian "Partner".
Perhaps you like to sell your business? We make you velly good offer?
The Qantas Sale Act will be no help because there is nothing left to sell.
That is what is going to happen to Qantas Alan. You have absolutely no experience whatsoever in operating in Asian markets and neither has Qantas apart from flying in, filling up and departing, yet you think that running an LCC operation in a bog in Ireland is suitable experience for operating to the shores of the Middle Kingdom?
Take the old Asian custom of "gifts" also know in vulgar terms as kickbacks. How are you going to deal with the necessity of those Alan? Australian law prohibits them, but I guess that the Qantas auditors and your own "robust internal processes" will keep you safe.
Well, except that they didn't, did they?
Qantas one of 11 airlines fined $1.1 billion for rigging cargo prices | The Australian
Quote:
The fine comes three years after Qantas was fined $40 million for price-fixing in the North American air cargo market.
In 2008, Qantas also agreed to pay a fine of $20 million under a deal reached with the Australian Competition and Consumer Commission over the European price-fixing cartel.
Never mind Alan, the Board knows how to deal with the thorny problem of Asian business customs. They will keep you safe. Leigh Clifford comes from Rio Tinto. They know all about Chinese corruption don't they?
Rio Tinto mops up after China bribery mess | The Australian.
So how are you going to do the "exploiting" Alan? Tell us about the mass of trained Qantas managers who know instinctively what to do when there appear to be employees on the payroll that have never been seen; when invoices appear that cannot be reconciled. What happens when you discover that the security guards on your stores and property exist to prevent you from accessing them after hours when the real business is being conducted? Do you understand that you had better give your Chinese managers about Ten percent of the shareholding lest they be enticed away to your loss? Have you ever had to write on a Six million dollar invoice "Please do not ask for credit as refusal often offends", Alan? Alan? Tell us about your vast experience of the orient! Do you like Chinese food? Is that it?
Somebody should tell this bog Irish idiot that he is not doing business with another Belgium or Holland. He knows nothing about the East - where business is played by rather different rules. Just ask Cathay and Swire, they have only been in the game for what? Two hundred years? ..And you are going to encroach on their territory?
It is perfectly clear who is going to do the "exploiting" in this transaction, and it won't be Qantas. You come to this market with zero expertise, and you are too stupid to understand that you have no understanding of what is required.
...and finally. The Board and management of Qantas keep harping about generating an "acceptable" return on Capital invested in the international business.......
Asia is the home of the concept of "Patient Capital"; exactly how does the long term Asian time horizon sit with your need to generate "Acceptable Returns" every year?
I can tell you right now that it doesn't. Wait till your business partner says: "Yes Alan, I know we are making a loss now, but in Ten years time!"
If Cathay wanted to set up a green fields carrier based in Oz they would have little trouble getting 2000 pilots that's for certain, I think I would leave Qantas in a heart beat if there was an Australian based option. Something I never thought I would have considered in the past.
Realities of seriously P%%ssing off expats in HK appreciated.
Realities of seriously P%%ssing off expats in HK appreciated.
Be careful what you wish for. I am CX, Australia-based, and the Swires make QF management look like Mother Teresa. Much of Cathay's success is based on loose Hong Kong employment law, 'interpretation' of contracts and the airline's location within 3 hours flying of 2/3 of the planet's population.
They would also be very quick to wangle Asian paid cabin, if not cockpit, crew.
We are currently working like dogs, and are also being double-taxed by both the Honks and the ATO due to Cathay incompetence in setting up the Australian crews' subsidiary company.
They would also be very quick to wangle Asian paid cabin, if not cockpit, crew.
We are currently working like dogs, and are also being double-taxed by both the Honks and the ATO due to Cathay incompetence in setting up the Australian crews' subsidiary company.
Last edited by Captain Dart; 11th Jun 2012 at 04:57.
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Our union certainly has a campaign ready to go. Its just a matter of when to pull the trigger. Here is a sample of one out of 20 different brochures prepared. They are ready to go depending on the changing scenario.
Joyce has destroyed the QF brand nicely, sunk the share price, just in time for Dixon and Gregg to pick it up for bargain basement price and pocket the billions of cash reserves.
Just like the movie Wall St.
History repeating...................again.
Just like the movie Wall St.
History repeating...................again.
Prey needs more than a prayer
June 11, 2012
With a market value of $2.1 billion, cash in the bank of more than $3 billion and a business that is worth more dead than alive, Qantas has gone from being an aviation predator to prey.
In the past week Qantas lost 35 per cent of its sharemarket value as long-suffering investors bailed out. The share volume, which averaged 50 million shares over each of four days, was significantly higher than the typical daily volume of 6 million to 8 million shares. It suggests hedge funds and day traders are clamouring on to the register in anticipation of a takeover offer or a strategic partner pushing the share price up. The daily gross short sales reported by the ASX increased steadily over the week. Capital Group has also been busy, lifting its stake to 10.4 per cent, according to a substantial shareholder notice lodged with the ASX.
The share pummelling was a startling reaction to a bombshell announcement that profit would be down 90 per cent and Standard & Poor's had put its credit rating on negative watch.
Advertisement: Story continues below
While both sets of news were a blow to shareholders who haven't seen a dividend for more than two years, the decimation of the share price says more about credibility issues facing the company and its board than its intrinsic value.
So much negative publicity has also been a blow to staff, and morale hasn't been helped by talk that some Qantas group executives have been subject to security checks, including checking their phones, to ensure they are not leaking to the media.
Leaks or not, at these levels Qantas is in play. Certain carriers, investors and banks are examining the possibilities. It has triggered speculation that Singapore Airlines and Emirates will study what a potential tie-up with Qantas could look like. In the case of Singapore Airlines, if competition authorities and the federal government allowed a merger, it would be one made in heaven. It would give Singapore access to a strong domestic business and Qantas a decent foothold in Asia.
Air New Zealand could also look at revisiting a strategic alliance proposal that was knocked back a few years ago by the competition watchdog. The world has changed since the alliance was derailed and so has the head of the Australian Competition and Consumer Commission.
And closer to home there is speculation that Qantas's former boss Geoff Dixon and former finance man Peter Gregg, with John Singleton, are investigating whether they can capitalise on the low share price to buy a strategic stake or organise something more dramatic. Dixon is part-owner in Global Aviation Asset Management, along with Singleton, Gregg and the Lieberman family.
GAAM was set up seven years ago to specialise in aviation leasing. Its chairman is Greg Woolley, the former Macquarie banker who headed the investment committee behind the failed takeover bid for Qantas by the Airline Partners Australia consortium five years ago.
Dixon revealed last year to Damon Kitney at The Australian that he had worked with a group of investors in GAAM on taking a strategic stake in Qantas. The idea never got off the ground because of concerns about global instability. But the group took it seriously enough to organise a line of credit, should that change. All it need do is get TPG or Macquarie or another big player to join in and it would have virtually reassembled the team behind the failed management buyout in 2007 at $5.45 a share.
But at the end of the day it will boil down to whether the banks, investors or an international carrier have the stomach to do a deal and whether the government allows it to happen. Any bidder would need to comply with the Qantas Sale Act, which prevents a foreigner owning more than 49 per cent of the airline, along with a few other conditions. Singapore Airlines would also have to deal with competition issues.
But the current crisis in confidence among Qantas investors is a situation that will require some serious reflection by the board and management about what they are doing wrong in the eyes of many shareholders who appear to have lost faith in the company's strategy.
The bombshell profit downgrade last week after a similar surprise decision two weeks earlier that it would split its international and domestic divisions and get another airline operator's certificate has not been received well. Nor has the loss of some key executives at a time when the airline needs experience.
Tough times have long been a recurring theme at Qantas and the latest round of challenges - high oil prices, natural disasters, competitors that are government-owned and therefore don't have to pacify shareholders, industrial action and midair emergencies - is nothing new.
What is new, and is now the biggest threat to the airline, is the damage to its brand. The big winners have been its competitors, which are making strong inroads as Qantas continues to pare back its international routes and has a schizophrenic Asian strategy.
The Qantas story is one the market no longer believes despite having
billions in cash and a strong number of businesses, including a dominant market share in Australia. This is the country's national carrier, it is the backbone of the multibillion-dollar tourism industry and for that a solution needs to be found - fast.
Read more: Prey needs more than a prayer
June 11, 2012
With a market value of $2.1 billion, cash in the bank of more than $3 billion and a business that is worth more dead than alive, Qantas has gone from being an aviation predator to prey.
In the past week Qantas lost 35 per cent of its sharemarket value as long-suffering investors bailed out. The share volume, which averaged 50 million shares over each of four days, was significantly higher than the typical daily volume of 6 million to 8 million shares. It suggests hedge funds and day traders are clamouring on to the register in anticipation of a takeover offer or a strategic partner pushing the share price up. The daily gross short sales reported by the ASX increased steadily over the week. Capital Group has also been busy, lifting its stake to 10.4 per cent, according to a substantial shareholder notice lodged with the ASX.
The share pummelling was a startling reaction to a bombshell announcement that profit would be down 90 per cent and Standard & Poor's had put its credit rating on negative watch.
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While both sets of news were a blow to shareholders who haven't seen a dividend for more than two years, the decimation of the share price says more about credibility issues facing the company and its board than its intrinsic value.
So much negative publicity has also been a blow to staff, and morale hasn't been helped by talk that some Qantas group executives have been subject to security checks, including checking their phones, to ensure they are not leaking to the media.
Leaks or not, at these levels Qantas is in play. Certain carriers, investors and banks are examining the possibilities. It has triggered speculation that Singapore Airlines and Emirates will study what a potential tie-up with Qantas could look like. In the case of Singapore Airlines, if competition authorities and the federal government allowed a merger, it would be one made in heaven. It would give Singapore access to a strong domestic business and Qantas a decent foothold in Asia.
Air New Zealand could also look at revisiting a strategic alliance proposal that was knocked back a few years ago by the competition watchdog. The world has changed since the alliance was derailed and so has the head of the Australian Competition and Consumer Commission.
And closer to home there is speculation that Qantas's former boss Geoff Dixon and former finance man Peter Gregg, with John Singleton, are investigating whether they can capitalise on the low share price to buy a strategic stake or organise something more dramatic. Dixon is part-owner in Global Aviation Asset Management, along with Singleton, Gregg and the Lieberman family.
GAAM was set up seven years ago to specialise in aviation leasing. Its chairman is Greg Woolley, the former Macquarie banker who headed the investment committee behind the failed takeover bid for Qantas by the Airline Partners Australia consortium five years ago.
Dixon revealed last year to Damon Kitney at The Australian that he had worked with a group of investors in GAAM on taking a strategic stake in Qantas. The idea never got off the ground because of concerns about global instability. But the group took it seriously enough to organise a line of credit, should that change. All it need do is get TPG or Macquarie or another big player to join in and it would have virtually reassembled the team behind the failed management buyout in 2007 at $5.45 a share.
But at the end of the day it will boil down to whether the banks, investors or an international carrier have the stomach to do a deal and whether the government allows it to happen. Any bidder would need to comply with the Qantas Sale Act, which prevents a foreigner owning more than 49 per cent of the airline, along with a few other conditions. Singapore Airlines would also have to deal with competition issues.
But the current crisis in confidence among Qantas investors is a situation that will require some serious reflection by the board and management about what they are doing wrong in the eyes of many shareholders who appear to have lost faith in the company's strategy.
The bombshell profit downgrade last week after a similar surprise decision two weeks earlier that it would split its international and domestic divisions and get another airline operator's certificate has not been received well. Nor has the loss of some key executives at a time when the airline needs experience.
Tough times have long been a recurring theme at Qantas and the latest round of challenges - high oil prices, natural disasters, competitors that are government-owned and therefore don't have to pacify shareholders, industrial action and midair emergencies - is nothing new.
What is new, and is now the biggest threat to the airline, is the damage to its brand. The big winners have been its competitors, which are making strong inroads as Qantas continues to pare back its international routes and has a schizophrenic Asian strategy.
The Qantas story is one the market no longer believes despite having
billions in cash and a strong number of businesses, including a dominant market share in Australia. This is the country's national carrier, it is the backbone of the multibillion-dollar tourism industry and for that a solution needs to be found - fast.
Read more: Prey needs more than a prayer
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Mutiny
The real players in this "game" are a long way ahead of masses calling for management blood here.
Like taxi drivers, the bulk of you have made so many "assumptions" without the facts. Some of the statements on here are just comical at best.
Charging in with unions shooting both barrels across the bow has been "factored in". It won't draw on national pride or a "fairer" Australia.
Hundreds of thousands of people have lost their jobs oversea's already esp in manufacturing......they got on with their lives and many even improved their "station" in sectors such as mining. You will not win this battle. It will actually backfire.
You should be going to management with a "proactive" not "reactive" attitude. The real management - The people in the shadows, are actually trying to protect your interests.
Consultants have the brains and the acumen to shred QF to pieces in a heartbeat. For the better or worse, depends on your perspective as a customer, shareholder, employee etc. They act without emotion.
All the "mud slingers" on here calling for management blood, guess what, hold up a mirror to yourself and you will see their problem. Most of it lies in the fact pilot's seem to think the industry owes them something.
Guess what - it doesn't. You are just a pawn. Its a brave new world.
"So mote it be"
Like taxi drivers, the bulk of you have made so many "assumptions" without the facts. Some of the statements on here are just comical at best.
Charging in with unions shooting both barrels across the bow has been "factored in". It won't draw on national pride or a "fairer" Australia.
Hundreds of thousands of people have lost their jobs oversea's already esp in manufacturing......they got on with their lives and many even improved their "station" in sectors such as mining. You will not win this battle. It will actually backfire.
You should be going to management with a "proactive" not "reactive" attitude. The real management - The people in the shadows, are actually trying to protect your interests.
Consultants have the brains and the acumen to shred QF to pieces in a heartbeat. For the better or worse, depends on your perspective as a customer, shareholder, employee etc. They act without emotion.
All the "mud slingers" on here calling for management blood, guess what, hold up a mirror to yourself and you will see their problem. Most of it lies in the fact pilot's seem to think the industry owes them something.
Guess what - it doesn't. You are just a pawn. Its a brave new world.
"So mote it be"