QANTAS in crisis talks with Emirates

[IAF747 8]

http://au.news.yahoo...re-price-falls/

 

 

Qantas crisis talks as share price falls

 

Geoffrey Thomas, Aviation Editor, The West AustralianUpdated June 9, 2012, 5:03 pm

 

Qantas is in secret crisis talks with arch rival Emirates and other airlines about the possibility of a comprehensive alliance or an equity tie-up after its share price plunged below the psychological barrier of $1 to close at 97¢ last night.

The talks come after a horror week for the Flying Kangaroo, which announced on Tuesday it was likely to post its first loss since privatisation in 1995, with its international division haemorrhaging $450 million.

Qantas’ retail and institutional shareholders, who have not had a dividend in four years, dumped the stock after the loss warning, wiping 25.3 per cent off the value of the airline up to Thursday’s close.

The slide continued yesterday, with a further 8.5 per cent plunge after rating agency Standard & Poor’s rerated Qantas’ investment-grade rating as at risk with a 90-day credit watch.

CBA Equities transport analyst Matt Crowe said aside from a deal with Emirates, Qantas “may be forced to sell off non-core (assets, cut more routes or reduce its fleet” to maintain its investment-grade credit rating.

“Yesterday was the strongest volume of shares traded in two years (92 million) and the market is concerned with Qantas’ credit rating and its negative implications,” Mr Crowe said.

Qantas has talked to Air New Zealand and Singapore Airlines.

A Qantas spokesman said: “At any one time we’re in discussions with other airlines. We don’t comment on speculation.”

Chairman of the Centre for Asia Pacific Aviation, Peter Harbison, said Qantas needed the Emirates deal urgently.Qantas chief executive Alan Joyce has been battling a raft of bad decisions by previous management and increased competition from low-cost airlines with modern, superior fleets.

 

 

More of what I have been saying can be read over at the PMDG 777 subforum: http://forum.avsim.net/topic/375437-qantas-and-the-boeing-777/

[Matthew Kane 1,343]

For a nation that has done well during this past recession it is a bit of a surprise QANTAS can't turn it around.

 

Australia and Canada have done consistantly well with dollars trading high, banks expanding into new markets, strong exports and yet QANTAS and Air Canada remain a part of those two markets still in trouble.

[IAF747 8]

For a nation that has done well during this past recession it is a bit of a surprise QANTAS can't turn it around.

 

Australia and Canada have done consistantly well with dollars trading high, banks expanding into new markets, strong exports and yet QANTAS and Air Canada remain a part of those two markets still in trouble.

 

Emirates, Singapore and Cathay Pacific are better than QANTAS. The public aren't stupid and won't fly 2nd best if they can help it.

 

QANTAS and AC seem to offer sub-standard service plus union trouble. Their attitude is everyone owes them something. BUZZZ, wrong attitude to have.

[Matthew Kane 1,343]

Emirates, Singapore and Cathay Pacific are better than QANTAS. The public aren't stupid and won't fly 2nd best if they can help it.

 

QANTAS and AC seem to offer sub-standard service plus union trouble. Their attitude is everyone owes them something. BUZZZ, wrong attitude to have.

 

Truth to that...however both QANTAS and AC had everything to their disposal to turn it around a very long time ago and they didn't. My GF was just commenting on how she avoids QANTAS now and she has just booked around $20000 worth of flights for the end of June and July.

 

She is flying from Wellington to London for 2 weeks business and back to Wellington for 1 day then off to Los Angelas, Las Vegas and San Fransisco and back to Wellington....That is 13 flights business class and not one with QANTAS. Oh well.

[ramrunner800 10]

Perhaps a good opportunity to pick up some of their stock in the near future.

[Matthew Kane 1,343]

Perhaps they will sell their A380 fleet to Emirates or do a partnership with Emirates from Oz to Dubai.

 

Maybe the 777 would have been the better choice after all. They have been extremely successful with Air New Zealand and other airlines. Smaller works and 2 engines are better then 4. the 737 airlines do well and 777 is perfect for intercontinental in my POV

[IAF747 8]

Perhaps they will sell their A380 fleet to Emirates or do a partnership with Emirates from Oz to Dubai.

 

Maybe the 777 would have been the better choice after all. They have been extremely successful with Air New Zealand and other airlines. Smaller works and 2 engines are better then 4. the 737 airlines do well and 777 is perfect for intercontinental in my POV

 

Good point Matthew.

 

Air New Zealand didn't buy the A380 either. But AC has the 777-300ERs and I am not sure why they would be struggling, when Toronto would be perfect to compete with the Atlantic routes from New York.

Maybe things in Europe is so toxic that anything flying into Europe is affected. You have to pay a carbon tax when flying to Europe now. That may be part of the reason, as well as terrible economic conditions.

 

The sooner QANTAS pull out of Europe the better. Fly the A380s to Hong Kong, Singapore, Dubai, Bangkok and Los Angeles, etc. Only a strong partnership could make QANTAS international competitive again. But Alan Joyce's plan of basing a sub airline in Asia makes a whole lot of sense. It would enable QANTAS to compete on a more level playing field. But saying that QANTAS is subservient to Carriers who can get fuel at very low prices, unlike 'Green' Australia where the prices are too high.

 

If the Government decided to revolutionize Australia and build a proper National Highway/Freeway system and develop our energy resources, we might have a chance. Cheap energy is key to providing ourselves with a future for QANTAS. In Malaysia and the Emirates/Saudi, fuel is very cheap. It is about time we start looking at that. Allow oil companies free reign to develop our oil supply as long as 50% of the oil and gas is put on the Australian market ONLY. This would benefit ordinary Australians and Politicians would not get any tax windfall. Instead of royalties, the oil/gas companies would be pouring the stuff into the Oz market giving us a cheap energy solution again.

[IAF747 8]

Update:

 

747s price crash.

 

http://www.bloomberg.com/news/2012-06-13/boeing-747-prices-tumble-as-higher-fuel-costs-end-23-year-reign.html

 

"The move away from larger planes has curtailed sales of the A380 and the 747-8, according toRichard Aboulafia, vice president of the Teal Group, a Fairfax, Virginia forecaster. Airbus has sold 253 A380s. Boeing has orders for 106 747-8s, of which only 27 are for commercial passenger operations.

“The market for large aircraft in general is disappearing fast,” Aboulafia said. “Most of the 747-8 planes are cargo. There’s just a limited market.”"

[Captain_Barfbag 31]

Didn't Quantas have a big flap last year about off-shoring its maintenance to reduce labor costs, where they were accused of union-busting?

[IAF747 8]

Yes they grounded services until the Government pulled their finger out to get the unions to stop their annoying games.