Qantas slaps down talk of Emirates investment

By David Flynn, May 28 2012
Qantas slaps down talk of Emirates investment

Qantas has quickly moved to slap down talk of investment by Emirates in its newly-minted Qantas International arm.

Several publications have floated a possible stake by the middle-eastern airline in the Red Roo, seemingly based on a note by a Sydney-based Deutsche Bank analyst touting that "Emirates could take a stake of as much as 30 percent ... worth as much as A$1.9bn."

Over the weekend, business and financial publisher Bloomberg reported that "Qantas Airways, seeking to turn around losses on international flights, is looking at getting separate licences for its international and domestic businesses amid interest from Emirates Airline in an enhanced tie-up between the carriers."

"While Qantas’s constitution and a 1992 Australian law cap foreign investment in the carrier at 49 percent, second-ranked Virgin Australia Holdings recently separated its international and domestic businesses to get around similar rules" Bloomberg explained.

According to the article, when asked about the prospects of splitting its businesses into domestic and international units operating under separate licences, CEO Alan Joyce responded "We’re exploring that as we speak.”

However, Qantas has this morning issued "A note of clarification on the reports about Emirates potentially taking a stake in Qantas Domestic" in which it says such an investment is "is simply not possible."

"Under the restructure we announced last week Qantas Domestic becomes a distinct business segment within the Qantas Group. It does not become a separate entity open to investment" the statement explains. "The Group as whole remains a single company listed on the ASX as Qantas Airways Limited."

"As Alan Joyce said last week, there is no subtext to this announcement. It is about managing Qantas International and Qantas Domestic more effectively and transparently given the different market conditions each faces."

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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.


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