Qantas considering structural changes to attract investment

Victoria
By Victoria July 23, 2014 12:27

Qantas considering structural changes to attract investment

Qantas is considering a splitting up its domestic and international divisions in order to attract more foreign investment as part of a wide-ranging structural review.

Local media quoted sources within Qantas that stated the airline was studying whether it should pursue a similar structure to that of rival Virgin Australia.
Qantas is due to provide an update on its structural review alongside its full-year results in August. It is also considering options such as a partial sale of its frequent flyer business or subsidiary Jetstar as part of the review.

On splitting its domestic and international businesses, Deutsche Bank analyst Cameron McDonald said: “That would take some work but we don’t think it would be impossible to achieve. I do think that [Qantas] obviously are keen to have a seat at [the global airline consolidation] table if and when it becomes appropriate.”

The precedent was set by Virgin Australia during 2012, when it split the ownership of its domestic and international business through an in-specie distribution of shares in its international division to its holders at the time.

Splitting Qantas’ domestic and international arms would allow much larger investment by a foreign carrier than is achievable in practice even after the changes to the Australian government’s Qantas Sale Act that were passed on Friday.

Qantas is expected to report a full-year pre-tax loss of AU$747 million, however there is speculation that one-off costs and write-downs could lead to a net loss of more than AU$1 billion.

Victoria
By Victoria July 23, 2014 12:27
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