Qantas sets up split of domestic, international airlines

By David Flynn, August 28 2014

Qantas is laying the groundwork to split its domestic and international arms, in order to enable what CEO Alan Joyce calls "future investment around the international business."

The move involves setting up a new holding company for Qantas International, Alan Joyce explained this morning during QF's 2013-2014 full year financial results. It's also responsible for the paper loss of $2.6 billion resulting from a write-down of aircraft value within the existing international fleet.

The groundwork creates "options for us into future," Joyce said, highlighting a relaxed timescale for the actual split, but added that "those options could be mixed and varied and we’re not going to speculate how they might occur."

Recent changes to the Qantas Sale Act now allow a single foreign airline or investor to hold as much as 49% of Qantas, up from a previous 25% cap for any single overseas investor or 35% for all foreign airlines combined.

Under the new structure, overseas investors could take an equity slice of the stronger performing Qantas Domestic wing separate to Qantas International or, under the current structure, the parent Qantas Group.

Qantas already runs its domestic and international arms as two distinct business units, each with its own CEO heading up operational and commercial functions, following a restructure in May 2012.

Ironically, the split will see Qantas adopt an identical structure to challenger Virgin Australia – a structure which Qantas has previously criticised as part of its "level playing field" crusade.

The most likely stakeholder is Qantas partner Emirates, although Emirates President Tim Clark has previously poured cold water on hopes of an equity investment along the same lines as that held by competitor Etihad Airways in Virgin Australia.

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David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

therealqueen Banned
therealqueen Banned

19 May 2014

Total posts 40

The arab vultures are smiling.....

watching qantas crucify itself.

how can you say "Arab vultures". the deal with emirate kept the Q alive. australian love affair with FF point when shopping for toilet paper is costing the qantas brand.

Qantas is a good brand, it had to separate domestic and international long time ago. remember the D-Head dixon (i think) who screwed the airline. 

when Qantas needed realiable and efficent aircrafts, he bought and didnt upgrade the fleet. common sense dictates australian geography and distance between cities need efficient aircrafts.

 

the Arabs are not smiling they are laughing their A off. and wondering how a Quality airline is rusting from within.

incompetance comes to mind.

09 Jul 2012

Total posts 11

Beats me why Qantas doesn't align itself with a Chinese airline, China being our largest trading partner and  an ever increasing tourist market and expanding destination network. With China's potential tourist growth one could only imagine where it will be in 10 years. As for Qantas partnering with an Arab airline,where's the long term benefit in that.

rj
rj

11 Nov 2013

Total posts 17

funny how Qantas spent the last 12 months referring to VA's split structure as a 'sham'.

oh well, can't beat 'em, join 'em. 

Qantas - Qantas Frequent Flyer

29 Aug 2014

Total posts 1

 

Can't stand all this negativity.  Qantas needs support, not criticism every time it makes a move.

Most of all it needs every one of us who calls Australia home to fly Qantas on every possible occasion.

I would be devastated if there was no longer the flying kangaroo.

PS :  The service and attitude of the staff has improved beyond belief.  It used to be a very weak link but no longer !


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