Qantas confirms Jetstar may one day fly alone
 

Fri "Sydney Morning Herald"

Qantas confirms Jetstar may one day fly alone
Scott Rochfort
August 11, 2006

QANTAS has confirmed it is considering spinning off its low-cost Jetstar subsidiary as a separately listed company in a bid to help fund the national carrier's expansion into the freight industry.

The airline's chief financial officer, Peter Gregg, also provided another strong hint, at a luncheon in Melbourne yesterday, that Qantas could announce a new raft of cost-cutting measures with its annual results next Thursday.

"We are looking to extend the segmentation in our business but ultimately if you could extract more out of it, we might consider it," Mr Gregg said in a Reuters report, when asked about a possible listing for Jetstar. "It's possible but it's not a hot topic. It's definitely possible," he said.

Mr Gregg appeared more definite about the possible expansion of Qantas beyond air freight into the land freight arena. "I expect we'll be making big decisions in this area in the coming months," he said.

There has been speculation Qantas - which already owns road parcel group Startrack Express in partnership with Australia Post - could be eyeing the half-stake in the rail freight operator Pacific National, which is up for sale by Toll Holdings.

However, it is understood the airline has gone cold on any idea of taking over Linfox.

There is speculation the former Patrick managing director Chris Corrigan could be cooking up plans to re-enter the freight arena, and could even be mulling over a possible venture with Linfox and the Dubai Ports-owned P&O Ports.

One key reason behind Qantas's desire to haul land freight rather than just operate aircraft is that it would be protected from the highly cyclical nature of the aviation industry.

Mr Gregg has made no secret in the past that his airline would prefer to enjoy the same rating as a diversified transport company like Toll, which has double the price-to-earnings pricing ratio Qantas has.

Thanks to the rise in fuel costs, Qantas recently warned it expects to post a 27 per cent slump in full-year profit to around $670 million next week.

However, what is expected to underline Qantas's need for further cost cuts is the airline's profit outlook in 2006-07. At present prices, the carrier has already warned it expects to pay an extra $1 billion for fuel this fiscal year.

One area where Qantas could look to extract more savings - on top of its existing five-year program to slash $3 billion in annual costs by mid-2007 - is maintenance.

Mr Gregg recently said any savings from a planned restructure of the airline's 737 maintenance base in Tullamarine would come on top of its so-called "sustainable future" program.

Qantas is expected to make a decision on the base, which employs 1000 staff, next month.

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"Everything old is new again..."

Ansett Wridgeways anyone?:rolleyes:

Buster - You are confusing Ansett Wridgways with Ansett Freight Express.
Ansett Wridgways were a furniture removal company and now trade as Wridgways Australia Limited (ASX:WWA).
Perhaps QF should enter the removals business. A comparison of shareholder returns between Wridgways and Qantas is as follows:
.
................1 Year, Ave. per year over 3 years, Ave. per year over 5 years
Wridgways..64.4%....................25.5%................... ............32.6%
Qantas.......-2.0%......................2.6%.............................. ..7.1%
.
Q. Who wants to be a QF shareholder
A. Telstra shareholders

Ah yes, indeed. :ok: My point being that Sir Reg was of the same opinion in the early/late 60's (unsure, maybe 70's) after Abeles first attempt at a takeover. He didn't want to be exposed again in the event of a downturn in his aviation interests.

And as it turned out, his diversification made the company attractive to another vulture that teamed up with Abeles, and eventually led to his & the company's downfall...:mad: :suspect:

Geoff Dixon said today on Busniess Sunday that this was simply speculation. While under Geoff's control, there are no plans to sell JQ off.

Put up the fares you effing idiots and stop taking it out on the staff! :{

Basic economics 101, isn't it? But Qantas is too "advanced" a company to use basic econs...:uhoh:
If they have to raise the ticket price $20 then so be it.

Simple Maths
 

Bloggs,

You are damn right. Tell me how many ticket miles, or seat miles are flown each year by say QF.....well take $1B and divide ticket miles flown, then add the extra to each ticket based on the miles flown.

We had a Ansett $10 fee, and our road freight companies charge a fuel surcharge, Qantas and Virgin all say they add a fuel surcharge, but hey...ad a few bucks more. It cant be any more than few dollars on short legs here and maybe from the east cost to LAX $150, but really, who is going to slash their travel ove $10.

I know some of the smart ar$e$ out there will argue they will, but they are the same morons who keep buying cigarettes when they jumped in price heavily withGov't taxes.

Rant over

Cheers

J:ok:

It continues to amaze me that ALL (well, most) of the airlines around the world continue to lose billions of dollars, and they all blame fuel prices and Osama. The reality is that we are all stabbing each other in the back in the race to the bottom. If this is globalisation, then the first step is to reduce everybody's standard of living to that of the third world with which we compete, followed by the decline of western civilisation, ably assisted by the terrorists. :* I hope my kids forgive me...

Bring back regulation, I say.:(

You can only charge so much for a ticket before customers are not prepaired to pay anymore and will simply not travel.

Interesting to see Jetstar Asia drop the Asia name and are now known simply as Jetstar. I wonder what the long term implication of this move is.

From the Business Sunday Transcript 13th August.

GREEENWOOD: We've seen speculation this week that Jetstar could be floated off as a separate company, if that were even considered, is it one of those situations where you'd like the Qantas holding company to maintain a controlling interest, or would you be prepared to let Jetstar go?

DIXON: No never let — under my leadership we would never let Jetstar go without a major interest being retained by Qantas. Right at the moment, that is not a proposal, I mean that was speculation by a columnist and we usually don't comment on speculations like that but the point about it is my aim at the moment, is to make sure that Jetstar, and Qantas, are both 100 percent owned by the current holding company and that they compete aggressively in the markets that they're in. But I also want them to compete aggressively within the Qantas group for the capital that we allocate. At the moment we've announced, I think we have 65 firm orders coming for the 787's — a new generation aircraft which will be 20 percent lower cost structure than other aircraft, or equivalent aircraft, we've said the first 10 or 15 will go into Jetstar. The truth is, they'd all go into Jetstar if Jetstar was the right vehicle for it. And that's going to be the new world for Qantas.

The only good thing about some of this is that Qantas will be around long after Dixon has departed the scene, if not this world.

What absolute rubbish !!!!!

Jetstar alone in this big world pfffft

The suckiling is never far from the sow

J* will be floated off.

QF will retain majority control.

GD, AJ and a few others will score a $100+million shareholding each.

Why is anyone surprised!