[transtraxman]

Not good news for Qantas (and not commented on so far).

BBC: 9th Jan.2014
“Moody’s cuts Qantas credit rating to ‘below investment'”,
http://www.bbc.co.uk/news/business-25663541

Travel Weekly, 09 January 2014
“Qantas suffers second ratings agency downgrade”
http://www.travelweekly.co.uk/Articles/2014/01/09/46566/qantas+suffers+second+ratings+agency+downgrade.html

Into whose lap will Qantas fall?

[LuganoPirate]

If Qantas were to fall, my guess would be EK. They’ve got the money and they already have a tie up. Cannot see who else would be interested?

[Jimmywright]

LuganoPirate, not going to happen due to the Qantas sales act. No one foreign person can hold more than 25% of Qantas and combined foreign persons can only hold a maximum of 49%, which is reduced to 35% if those persons are airlines.

So the maximum Emirates could take is 25%. Qantas is lobbying the government now to have this changed, especially when their main competitor Virgin Australia is not restricted, so is getting an inrush of new capital from its owners, who are Singapore Airlines, Ethihad and Air NewZealand. All of whom would benifit greatly if Qantas were to fail. So no wonder they are pumping in the capital.

PS a company is considered a person.

http://www.comlaw.gov.au/Details/C2012C00396

[AMcWhirter]

EK sounds like a logical investor …but CEO Clark was quoted in the Gulf media last month saying his airline did not have a bottomless pit of cash to consider a bid for QF.

[SimonS1]

I can’t see why EK would be interested. They have never been into acquisitions and I believe they sold the only equity stake they had (Sri Lankan).

Besides if they had the money there must surely be better strategic opportunities than an airline in a disadvantaged geographic location and a financial mess.

[Jimmywright]

Again even if they wanted to they cannot own more than 25% anyway which is next to uselss. This was one of the reasons BA sold their share a few years back now.

[LuganoPirate]

Jimmy, my info is this rule will be changed sooner rather than later. It would be a major blow to Australia if Qantas were to fail.

Simon makes a point, but I’m wondering whether the allure of owning one of the oldest and best known names in the business would be too tempting for EK to pass up on?

[Jimmywright]

LuganoPirate, dare I ask where your information is coming from? Because for your statement to be even remotely true your contact must be someone inside the Liberal Party of Australia.

It is true and public that Qantas is lobbying the government, it is also true that they have said they will look at it, but beyond that even IF the government wanted to change the rule, which is actually a law they would have to get it through both houses of parliament.

At present the Government does not have a majority in the Senate, and come July they will still have two less than the Labor party and Greens who work together on many issues, but will still be short of an absolute majority, so will need the support of at least 6 of the 8 independents to get the legislation through the Senate.

One such Independent is a one Senator Nick Xenophon who has been a very vocal anti Qantas (management) for a number of years and he is anti anything foreign. Some say his name should be Nick Xenophobic as he gets his head on the tele complaining everytime Qantas makes a decision that sends work offshore, or other companies do the same or sell up. I doubt he would support it.

So with respect I would say the source of your info is looking at the crystal ball like we all are, rather than having some kind of inside knowledge.

[transtraxman]

Yet again CAPA, today 14th February, comes up with an analysis of Qantas´ long-haul problems – but in Asia this time.
“Qantas’ pressing need to solve the Asian network dilemma, now its European restructure is in place”.

http://centreforaviation.com/analysis/qantas-pressing-need-to-solve-the-asian-network-dilemma-now-its-european-restructure-is-in-place-152263

[AMcWhirter]

There are fears of big job cuts to be announced by Qantas next week when management reveals how it plans to strip A$2 billion in costs from the business.

http://www.smh.com.au/business/aviation/fears-qantas-will-slash-3000-jobs-in-costcutting-drive-20140221-336vs.html

[BA744fan]

I have read on several sites that the MEL-DXB-LHR flight will terminate in DXB with any passengers travelling to LHR being transferred to the SYD-DXB-LHR flight.

Would then be a similar set up to what BA do in SIN.

Would free up an A380 for QF, but where would they use it instead?

[canucklad]

i suspect the breaking of the codeshare agreement with SAA is probably down to EK’s management dictating terms to QF’s.

Sad that such an iconic airline is fast becoming nothing more than a poor backwater relation to its rich fat and greedy sugar daddy.

[SergeantMajor]

Qantas is being gutted by Emirates.

It’s a shame this has had to happen; if the Unions and the Australian government had conceded that restructuring was essential, and supported this, it could have been saved (if that had happened much sooner, this would probably have occurred within the context of a tie-up with IAG).

http://en.wikipedia.org/wiki/2011_Qantas_industrial_disputes

Unfortunately, this will not now happen, and Qantas is heading towards relegation to a domestic only operator.

Sad, and a strategic worry for Australians who rely on international air links, though less of an issue than was the case in the past as broader competition and free-er markets should soften the blow.

[AMcWhirter]

Qantas’ predicament has been further spelt out in Australia’s The Weekend West.

It reports that Qantas staff costs “are double those of Emirates and Singapore Airlines and 16 per cent higher than Virgin Atlantic.”

“Qantas carries just 17 per cent of international traffic into and out of Australia, down from more than 40 per cent in the early 1990s.”

[rferguson]

I’m sat next to a Qantas crew colleague right now who is working a flight London – Dubai tomorrow and has access to the real time loads for the two QF flights departing London tomorrow night via the QF staff intranet.

The QF2 is showing availability of 6/17/11/158 (F/J/W/Y)
The QF10 7/29/21/241(!!)

So that’s a total of 399 empty Y seats to Dubai on QF tomorrow night – the equivalent of an entire 747.

She says this is pretty normal for the route these days.

On an A380 this is unsustainable – there are 371 Economy seats on the A380.

While Alan Joyce has stated that the media reports of a reduction of service on the LHR-DXB route is ‘inaccurate’ he hasn’t outright denied it. We all know how airline PR speak can work – for example if Qantas eliminated one of the A380 services yet Emirates replaced it with another then it wouldn’t be a ‘reduction in service’ as far as Qantas is concerned as it is a joint business.

Qantas reducing it’s own ‘metal’ on the route makes absolute sense – Qantas initially placed the A380’s on the LHR route because LHR was their gateway to Europe in conjunction with BA feed. Around 50% of passengers were transferring to other European destinations at LHR. Now all those passengers are only going as far as Dubai before transferring onto Emirates flights bound for Europe. So the two QF A380’s are continuing onto LHR with traffic terminating in London. Yet, capacity hasn’t been reduced to take this into account.

And that’s where Qantas is in a pickle. It doesn’t have a mid sized aircraft to help tweak capacity. It’s long haul fleet consists of A380’s (too big), 747’s (fuel guzzling and also too big) and A330’s (which do not have the range for unrestricted pax and cargo op’s from SYD or MEL to DXB). They have no mid-sized long range aircraft like the 777 which would be an ideal fit.

Rumours amongst the crew at the LHR QF base are in overdrive. The London service is being axed altogether. The service is reducing to once daily. Emirates is leasing QF 777’s to fly from DXB to LHR and Berlin. QF are basing one of their A330’s in DXB The crew base is closing.

[Author]

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