QF and JQ split
 

As a total split between the two and them starting to compete with each other? Not a chance. JQ would be toast within weeks without big brother's support.

dr dre- I hope they go it alone there is no reason JQ couldn't survive without "big brother", they would most likely be better off and so would the crew..

There are a number of reasons why JQ will not go it alone.

1. There has never been a tangible reported profit from any (offshore) associate AASB128 entity. All of these entities require substantial capital. 'Big brother' provide that. JQ Asia is consolidated under AASB127 into the JQ segment as Qantas claim control. What is very interesting is the structure of their lease obligations. Funding to cover the operating shortfall comes from Qantas NOT Mr Choo (The alleged majority owner) Without capital would these businesses actually survive is a good question.
2. JQ is not broken into two operating segments under AASB 8. Management choose to report Qantas this way and despite JQ operating as many aircraft as big brother they refuse the same transparency. Wonder why?
3. Any organisation undertaking due diligence on a 'purchase' would be extremely interested in 'materiality thresholds'. These thresholds are internally set by executive management. Such detail is not required to be presented in Consolidated Accounts under AASB 10. Any purchaser would investigate this relationship fully to see who pays for what.

JQ was of course being positioned to take over from 'big brother' in fact it is well known that management sought changes to bilateral access in 2011. No doubt conceived by the hardy souls of Consulting groups and IR, the theory of LH Low Cost is a very difficult proposition on longer sector lengths, something Mr Buchanan tried to tell them before being sent packing.

Nonetheless JQ had and continues to have a role: it ought provide demand stimulus to elastic travelers. Flying some 48% of the ASK of 'big brother' yet only generating 22% of the revenue, we would politely point out is indicative of being over-scale which adversely affects profitability. Reducing its scale is a difficult proposition with the incumbent CEO welded to the 'creation myth' he clings to about JQ.

I'm guessing it's going to happen as I heard some very large figures being thrown about for the work required to split it. Who knows what will be happen.... it will be interesting to see the outcome.

There is NO chance this will happen.

The 2 brands will continue to act in concert as sword and shield. It makes it VERY difficult (especially domestically) for challengers in both the premium and low-cost market segments.

PG

I suspect what this thread is discussing and what has actually been discussed are two very different things. What Rated De has mentioned in conjunction with an incoming fleet replacement might lead to more accurate conclusions....and the costs involved....you don’t split a golden nugget unless you’re forced to.

Only when Jetstar executives are paid by Jetstar will I give this rumour any credence.

....especially when your international route approvals are all legacy of QF and the real motive for splitting would be to raise capital which would immediately void the route approvals which state .."QF or another wholly owned subsidiary" - until the cascade of variation letters to govt start (as they did with JQ's spreading its wings previously) the current balance sheet arrangements will remain

AT

Another crap post from a management troll.
Let me see..."different pay rates"..like, pay engineers and pilots less pay in a market where supply is rapidly dwindling?
Winding down 737 ops..oh, that's right, we just got 6 more to fly.
Since when did "creating" a new airline reduce training costs?
Direct entry..from where?? 457 Visas? Of course!!
This isn't Lucerne, the only thing you didn't say was non-unionised labour.
Pfffffttttt.

Could just as readily been planted from Coward street.

With superlatives exhausted, an engineered fight with Canberra airport and a month to run on the FY, a bit of 'froth' for the ASX might help!

Qantas had the opportunity to do just that with an embedded 734 operation, a gift from the Australian taxpayer. 734, crewed by the same already costed pilots, a fresh coat of paint and high density interiors, they had the Low Fare Airline almost ready to fly.
Instead what they preferred was an entire greenfield operation, all designed to lever downwards terms and conditions.

They are looking for another "sky is falling" moment for leverage in EBA negotiations..
Yawn.

• Think 457 Visa
• Jetconnect in VH registered aircraft
• Network to operate A320
• Comfort letters from Unions (sarc is off)

Rather ironic that even with a global pilot shortage and these things happening, most are so myopic they can't see it hidden in plain sight!

Contract season anyone?

Even if the company was trying to manufacture some leverage I'm not sure pilots in general would place any weight on it...in any company. Its simple, people will move to the position that gives that individual the best lifestyle proposition and in times of a pilot shortage, in Qantas at least, that means pilots will spend minimal time on a type they consider inferior. So manufactured crisis or not, it's going to take a genuine downturn for this structural predicament to return to equilibrium. Perhaps, there is a better way? At the moment I'm not sure many people care if the can is kicked down the road. More pay and/or more promotion. It's really simple and the industrial relation teams have their work cut out for themselves.

QF Group have a lot of B787 options. They are replacing the remaining 747's with 787's frame for frame and then the rest go to JQ for international expansion.