Qantas expects foreign investment after government restrictions are lifted

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By admin August 7, 2014 20:11

Qantas expects foreign investment after government restrictions are lifted

Qantas CFO Gareth Evans has stated he expects another airline to buy a stake in the Australian carrier now that certain foreign investment restrictions have been lifted.

Evans said: “In terms of the way we view the landscape for us, we have always been fans of consolidation whether it be through commercial arrangements or stronger ties, more equity ties, we have certainly been fans of that. Consolidation is the way of the future for the aviation industry. But at the same time it never happens quickly.”

Changes to the Qantas Sale Act mean a foreign airline could own up to 49% of the Australian flag carrier, although that would restrict its ability to have any foreign institutional shareholders which currently comprise around 40% of the share register.
“It is not complete removal [of restrictions] but it is certainly a step in the right direction,” Evans added. “Consolidation is a long-term proposition.”

Evans also said it would be logical for Qantas to have an equity partner in Asia in the future but did not rule out interest from other regions, particularly given Dubai-based Emirates is a major commercial partner of the airline.

“The relationship with Emirates which is a form of consolidation – albeit a commercial one – brings significant benefits in terms of learnings between the two partners, collaboration on key routes and pricing” he said. “It can in the fullness of time lead to initiatives around costs as well. That isn’t something we have addressed with Emirates yet, but you can see that happening over time.”

Qantas is expected to report a full-year underlying pre-tax loss of more than $700 million on August 28th. The airline has embarked on a significant restructuring plan, with $2bn of costs to be cut over three years, nearly $1bn of which will come from its international business.

admin
By admin August 7, 2014 20:11