The "side deals" that exist for Jetstar Asia are by no means illegal or deceitful. Qantas just controls Jetstar Asia through a series of management and loan agreements, allowing them to circumvent (legally) the law in Singapore on foreign ownership of airlines. Qantas takes on the entire financial liability of the company and derives the full financial benefit (if any) - just as they do with Jet Connect. Jet Connect is a 100% owned subsidiary and also does not appear under investments accounted for under the equity method - same for Jetstar Asia.

The only conclusion I am trying to draw from the above is that Jetstar Asia effectively functions as a subsidiary of the Qantas Group, nothing more and nothing less - and what they are doing is legal. Virgin Australia has also pursued a similar structure that Qantas has done with Jetstar Asia (and it's Ansett International that pioneered that split structure in Australia anyway)

As to whether Jetstar Asia has made a good return on investment, has been positive for shareholders, or whether there is a leasing rort going on between interested parties and Qantas subsidiaries - that's out of the scope of the conclusion I was trying to draw from my analysis. However, chasing silly investments, trying to launch an LCC in HK despite the airport's congestion and domination by CX, or pulling out of Frankfurt despite 90% load factors - is by no means a crime.

So could Mr Choo sell his share in Jetstar Asia for $500m or so, pay back Qantas the $100m or so, and walk away with a tidy $400m or so?

I wish I was Mr Choo!

Probably not - The collateral for Choo's "loan" is his stake in Jetstar Asia. He probably has nearly zero real interest in Jetstar, Qantas possibly pays him a nominal fee a year to use his name to front the company. Choo is just Qantas' proxy through which they control Jetstar Asia.

And now after 5:00pm...........if that was the announcement, meh

Going Boeing

The 'prospectus' for the CofA's partial divestment of QF and total sale of TN was dated 1st June 1991. I've a copy! Your memory is good.:ok:

Thank you DrPepz for you cogent & insightful analysis, your thoughts are always welcome.

Correct, its not a crime, however, equally as Joe Hockey has pointed out, its not a reason to put the Australian taxpayer on the hook without a forensic investigation of the books. Now Qantas are actually wanting the government to do something (what that is hasn't been explained in public).

This is AJ's problem in a nutshell. He appears to have been under the assumption that the "simpletons" wouldn't figure it out. Well, those simpletons appear to have enough of the puzzle to make life extremely difficult for him.

Unlike Ansett, this is being tracked analysed & discussed in real time, and the element of surprise is lost. When he goes cap in hand, the politicians know EXACTLY which accounts to view and questions to ask.

Happy to be corrected,thanks GB.

It may not be illegal and I am sure it isn't because Qantas has huge resources to ensure the rules are not broken. What is not acceptable is the over $200 million worth of losses that Orangestar made before "it was unable to meet it's obligations" and was taken over by Newstar. Since then Newstar has lost over $300 million up to August 2012. Shareholders need to get angry because when this all hits the fan questions will be asked and as happened in the US the "Assets will go private and the Debt will go public" if Australia wants to have an aviation industry. The consultants will be gone by then! And remember 75% of all Jetstar lease go through Ireland. Dr Pepz has a new fashioned view of ethics, e.g. there is none!

Solomon's Son, I think Dr Pepz was speaking in terms of corporate law, not ethics as taught in days of old. He is right: Qantas seem to be orchestrating their various endeavours abroad to be at once opaque and legal.

The ethical/moral obligations as understood in the Judeo-Christian value system have been sidelined; welcome to the new Feudalism. Serf's Up!

Is this the same huge resources for legal advice to make sure things are 'legal' that were advising Qantas about cargo price fixing cartels that have/had one of their management types jailed in the USA?

I love the Qantas Cruises irony...... "Qantas passengers will not be able to book flights and cruises together."

Doh

When booking cruises (or most other non-flying services) on the Qantas website, the process will be handled by an entity called Hooroo.

Hooroo is, in effect, Jetstar. Qantas provide the infrastructure, Jetstar earn the revenue.

Qantas is a national disgrace. And when the Chineser decide to rattle the cage over the Spratly Islands, guess what happens to Qantas Chinese maintenance?

In past posts I have joked about Qantas becoming just a Travel Agent. I think I should have taken myself a bit more seriously :ooh:

Going Boeing,

Re Qantas investing in TN, i think you will find that the re alllocation of qantas 767s to domestic use, cost Qantas next to nothing!
I have seen the Qantas Aircraft utilisation schedules at that time, and the 767 utilisation by Qantas had large amounts of down time,
and a tighter utilisation schedule released those 767s,
with no reduction in international flying!

Time to lock it in.....
 

Will demands be made to secure employee entitlements?
It was ten years before Ansett staff received what rightfully belonged to them.
You may need it immediately available to just get by.....
Surely this has to be the first and foremost obligation upon a company asking taxpayers (the government) for assistance, particularly when offshoring......


Ansett employees get final payment - ABC News (Australian Broadcasting Corporation)

Qantas selling cruises. What a joke. People who would be considering a holiday and looking at the flight specials on the Qf website will now be directed to spend their hard earned cash elsewhere.


What will the morons think of next, setting up a ticket box to sell Syd to Mel rail tix?

Not unlike now then.

Boe787, you're only partially correct in that when internationally configured aircraft had some downtime, they could achieve higher utilisation by doing a couple of domestic sectors before the next international trip. However, the seven B762's were assigned purely domestic duties in the early 1990's and replacement B763's (GE) were purchased to maintain the international services. Additionally, seven B763's (RR) were leased commencing early 2000 for purely domestic operations - this increased the B767 fleet to 36 aircraft which was maintained for a number of years before the B762's were retired.