Australia, New Zealand & the Pacific Airline and RPT Rumours & News in Australia, enZed and the Pacific

QF buys 19.9% of Alliance

Old 1st Feb 2019, 13:52
  #21 (permalink)  
 
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What VA needs is it’s own fleet of modern 100 seat aircraft. Maybe something like, I dunno, an Embraer E-190.
Oh, hang on a minute, that’s right.
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Old 1st Feb 2019, 15:42
  #22 (permalink)  
 
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There is no doubt this is a disrupter.

At $2.40 a share, QF are not buying for the aircraft or the business, if they wanted it for that reason they could have paid over $1 a share less only 18 months ago. Furthermore, $60m investment in further fleet expansion at QF would return more than the dividend theyíll pick up from Scott & co.

So this is purely strategic. Question then is what is the strategy?

To disrupt Virgin?
To gain control of FIFO?
to block a potential new competitor?

Or is it a stalking horse, a rainy day play ala Geoff Dixonís Impulse purchase, where the real disruption (Jetstar) was the ability to both stop an aggressive competitor in their tracks whilst simultaneously disrupting Qantasí own labour force. Fast forward and we are potentially looking at a federal government change to a far more labour friendly regime, together with an increasingly ambitious and agressive labour force.

if AJ has shown anything, itís that when it comes to the workforce, he will stop at nothing to win the day.

if you put all of the above together, itís strategically brilliant, whilst simultaneously very concerning for existing employees, customers and the government.

One things for sure, it will consume Alliance and Virgin managements full attention for some time.

AJ needs a legacy before he departs. Even if they do Sunrise or order new aircraft thatís not enough. Dixonís was the Impulse purchase and birth of Jetstar, will Alans be Alliance?
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Old 1st Feb 2019, 19:28
  #23 (permalink)  
 
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Originally Posted by Arthur D View Post
There is no doubt this is a disrupter.

At $2.40 a share, QF are not buying for the aircraft or the business, if they wanted it for that reason they could have paid over $1 a share less only 18 months ago. Furthermore, $60m investment in further fleet expansion at QF would return more than the dividend they’ll pick up from Scott & co.

So this is purely strategic. Question then is what is the strategy?

To disrupt Virgin?
To gain control of FIFO?
to block a potential new competitor?

Or is it a stalking horse, a rainy day play ala Geoff Dixon’s Impulse purchase, where the real disruption (Jetstar) was the ability to both stop an aggressive competitor in their tracks whilst simultaneously disrupting Qantas’ own labour force. Fast forward and we are potentially looking at a federal government change to a far more labour friendly regime, together with an increasingly ambitious and agressive labour force.

if AJ has shown anything, it’s that when it comes to the workforce, he will stop at nothing to win the day.

if you put all of the above together, it’s strategically brilliant, whilst simultaneously very concerning for existing employees, customers and the government.

One things for sure, it will consume Alliance and Virgin managements full attention for some time.

AJ needs a legacy before he departs. Even if they do Sunrise or order new aircraft that’s not enough. Dixon’s was the Impulse purchase and birth of Jetstar, will Alans be Alliance?
Little Napoleon has had a decade to drive a 'legacy'.
His big megaphone order in 2011 for 110 A320, with 99 to go to JQ and 11 to his Red Q venture a case in point.

Of the 110 aircraft, 11 have been allocated to the new Qantas premium airline which will be established in Kuala Lumpur or Singapore – possibly the first time the A320 will be seen in Qantas mainline colours – while the other 99 will go to Jetstar to accommodate growth and to replace aircraft coming off lease.
Jetstar is an overscale business, despite their desperate prayers the model is 'saturated' Thus, given the genetic desire to 'disrupt' labour, finding a home for the JQ A320 is very important.
First Network now Alliance.

Their fleet decisions are their legacy. That in a decade this inept board, along with Little Napoleon and his zealots have not ordered a single aircraft for Qantas, while exponentially expanding a low margin Jetstar in pursuit of purported labour cost advantage their only focus. With a fossil like Leigh Clifford, looking for for Napoleonic victory over those unions, Little Napoleon and he became the dynamic duo, the poster children of IR.

Efficiently running an airline is a tough business. It requires a high capital investment to build the fleet, high labour costs, strong exposure to market fluctuations, and it involves making decisions today with long-lasting impacts in a volatile and ever-changing industry
That during his tenure, Qantas has been 'terminal', needed $3 billion then didn't, moved to Dubai, moved back, impaired the fleet, then miraculously transformed and yet still talking about an aircraft for its International business that most other airlines settled on a decade ago is his legacy.
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Old 1st Feb 2019, 20:04
  #24 (permalink)  
 
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This is not Impulse or Jetstar over again.
Its only a 20% stake.
Time for a tea and a lie down you lot.
Like Rated D mentioned Red Q was a 100% Qantas owned play. Except it never got off the ground.
JQ HKG. Disasterous loss of shareholder funds without flying a sector.
Dubai one minute. Singapore the next.
Its a 20% shareholding and no more.
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Old 1st Feb 2019, 20:53
  #25 (permalink)  
 
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Originally Posted by FightDeck View Post
Its a 20% shareholding and no more.
Except - straight from the horses mouth :

Qantas expects to ultimately seek regulatory approval from the ACCC to build on its current shareholding, with a longer-term view of taking a majority position in Alliance Airlines in order to better serve the charter market by unlocking synergies.
https://www.qantasnewsroom.com.au/me...ance-airlines/
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Old 1st Feb 2019, 21:45
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Originally Posted by The Bullwinkle View Post
What VA needs is itís own fleet of modern 100 seat aircraft. Maybe something like, I dunno, an Embraer E-190.
Oh, hang on a minute, thatís right.
What were the E-190 seat/km operating costs Bullwinkle compared to the Alliance F100........?

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Old 2nd Feb 2019, 03:26
  #27 (permalink)  
 
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Hi everyone here's another way of looking at the Qantas purchase of 19.9% of Alliance
Qantas taking a stake in Alliance is actually quite a clever thing to do. It is not unlike Mum and Dad investors buying shares in the Banks, Telstra , Transurban, AGL etc. These companies are a necessary evil. So while you are paying for the privilege for using their services, you are receiving dividends back at the end of the financial year, if they are successful and well run.
Qantas have no input on the board as such, and I doubt they will receive the regulatory approve to do so. Hence they will be at the mercy of the board who seem very competent.
Alliance have made some very wise and strategic decisions, good luck to them.

Last edited by Cravenmorehead; 2nd Feb 2019 at 05:08.
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Old 2nd Feb 2019, 05:24
  #28 (permalink)  
 
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Originally Posted by The Bullwinkle View Post
What VA needs is itís own fleet of modern 100 seat aircraft. Maybe something like, I dunno, an Embraer E-190.
Oh, hang on a minute, thatís right.
Some of Virgin's E190s are still on the CASA register. It's not too late to bring them back in to service, surely!
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Old 2nd Feb 2019, 06:10
  #29 (permalink)  
 
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Some of Virgin's E190s are still on the CASA register. It's not too late to bring them back in to service, surely!
Would you believe yes? They are still paying the leases on at least three air-frames until 2020.
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Old 2nd Feb 2019, 07:21
  #30 (permalink)  
 
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Originally Posted by Icarus2001 View Post
Would you believe yes? They are still paying the leases on at least three air-frames until 2020.
In whose name are the leases?
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Old 2nd Feb 2019, 21:45
  #31 (permalink)  
 
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5 airframes - Wells Fargo and Emerald Aviation AOE 7 Limited https://www.regosearch.com/search/re...RJ+190-100+IGW
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Old 2nd Feb 2019, 21:48
  #32 (permalink)  
 
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Should be a good thing for the Alliance crew.
Network seem to have gone from strength to strength.
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Old 3rd Feb 2019, 01:50
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Originally Posted by 737pnf View Post
5 airframes - Wells Fargo and Emerald Aviation AOE 7 Limited https://www.regosearch.com/search/re...RJ+190-100+IGW
Thanks for that. Anybody know anything else about this company? I see QF lease at least one 330 off them...
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Old 3rd Feb 2019, 02:20
  #34 (permalink)  
 
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Old 3rd Feb 2019, 04:14
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Originally Posted by longlegs View Post
Thanks again, so HNA owns the lease on at least on QF A330...
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Old 4th Feb 2019, 07:08
  #36 (permalink)  
 
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E190's? The Townsville refueller tells me three are turning up at Cobham/Perth, shortly.
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Old 4th Feb 2019, 09:56
  #37 (permalink)  
 
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Which doesnít make any sense - and therefore itís probably true! If it doesnít make sense, Virgin will do it.
So true!
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Old 4th Feb 2019, 10:35
  #38 (permalink)  
 
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Cobham are in the market right now for some Q400's for WA
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Old 4th Feb 2019, 23:38
  #39 (permalink)  
 
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Sounds like the VA leasing arrangements are about to get a tad more expensive. Better start looking to somewhere else to farm out mainline flying. How long before we see VARA on ML-SY-ML?
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Old 5th Feb 2019, 03:25
  #40 (permalink)  
ebt
 
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Originally Posted by Street garbage View Post
Thanks for that. Anybody know anything else about this company? I see QF lease at least one 330 off them...
All five are owned by Avolon, with some showing under the trustee (Wells Fargo) which I suspect is because they are part of an ABS deal. From that data I see, they are in storage in Nashville and scheduled to be bought by Falko (former BAE Systems leasing arm). An earlier lot of ex-VA 190s was bought by Nordic Aviation Capital, and a few have gone across to Airlink in South Africa. Incidentally, Nordic have about a dozen 190s in storage that could be activated easily enough, along with a sh**load of ATRs which I am sure they could offer at a "great" rate to JB, if he is allowed to get his chequebook back.
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