Qantas is poised for aggressive international expansion, particularly in Asia, if its takeover clears regulatory hurdles and the bid-ders prove they are not corporate raiders, analysts said.
Private equity consortium Airline Partners Australia (APA) will seal one of the largest takeovers in aviation history if its A$11.1 billion (US$8.7 billion) bid proceeds after winning support from the Qantas board earlier in the month.
While board members were won over by a package that includes generous remuneration for top executives, misgivings remain in Australia about the bidders' intentions and the prospect of a national icon being controlled by an international consortium.
APA has repeatedly stressed that Qantas will remain under Australian control under the consortium, with offshore investors including US-based Texas Pacific Group and Canada's Onex re-presenting less that 40 percent of the group.
APA spokesman Bob Mansfield has also denied the consortium would adopt the smash-and-grab tactics typically associated with private equity takeovers, ruling out a Qantas break-up and cuts to regional services.
Instead, Mansfield says APA will remain involved with Qantas for five to 10 years, pressing on with the airline's existing plan to spend A$10 billion on 70 new aircraft to increase capacity by 40 percent over the next five years.
Center for Asia Pacific Aviation managing director Peter Harbison said that if the pledges were met, Qantas would be well placed to meet the challenges of an increasingly-deregulated international aviation market.
While Qantas remains one of the world's most profitable airlines, Harbison said it could perform even better if it was delisted from the Australian Stock Exchange and placed in the hands of owners ready to make long-term investments.
"As a listed company in a small country at the end of the world, Qantas was not previously well-placed to survive, once global markets deregulated," he said. "The new ownership can go where the public company could not."
Harbison predicted the new owners would use Qantas' low-cost offshoot Jetstar as the vehicle for growth because it has lower cost and labor overheads than the main airline.
"As soon as the transaction is completed, it will not be surprising to see an acquisition-oriented Qantas begin moving into new Asian markets," he said.
"It is already represented in Singapore with Jetstar. This model, along with direct minority acquisitions in existing airlines, either by Qantas directly, or by its new owners, will allow it to develop a serious foothold in such markets as China, India, Indonesia and other parts of Southeast Asia," he said.
"In this way, the Qantas/Jetstar brand will become ubiquitous in Asia," he said.
Australian Prime Minister John Howard has made it clear the government will be closely watching the transaction, pointing out the strong association voters feel for the airline dubbed "the flying kangaroo."
The Foreign Investment Review Board will check that offshore investors hold less than 49 percent of the airline, with no individual foreign company allowed to have more than 25 percent.
PLA MANEUVERS: Although Beijing has yet to formally announce military drills, its coast guard vessels have been spotted near and around Taiwan since Friday The Taiwanese military is on high alert and is closely monitoring the Chinese People’s Liberation Army’s (PLA) air and naval deployments after Beijing yesterday reserved seven airspace areas east of its Zhejiang and Fujian provinces through Wednesday. Beijing’s action was perceived as a precursor to a potential third “Joint Sword” military exercise, which national security experts said the PLA could launch following President William Lai’s (賴清德) state visits to the nation’s three Pacific allies and stopovers in Hawaii and Guam last week. Unlike the Joint Sword military exercises in May and October, when Beijing provided detailed information about the affected areas, it
CHINA: The activities come amid speculation that Beijing might launch military exercises in response to Lai’s recent visit to Pacific allies The Ministry of National Defense (MND) yesterday said China had nearly doubled the number of its warships operating around the nation in the previous 24 hours, ahead of what security sources expect would be a new round of war games. China’s military activities come amid speculation Beijing might organize military drills around the nation in response to President William Lai’s (賴清德) recent visit to Pacific allies, including stops in Hawaii and Guam, a US territory. Lai returned from the week-long trip on Friday night. Beijing has held two rounds of war games around Taiwan this year, and sends ships and military planes
Five flights have been arranged to help nearly 2,000 Taiwanese tourists return home from Okinawa after being stranded due to cruise ship maintenance issues, the Ministry of Transportation and Communications announced yesterday. China Airlines Ltd (中華航空), and EVA Airways Corp (長榮航空) have arranged five flights with a total of 748 additional seats to transport 1,857 passengers from the MSC Bellissima back to Taiwan, the ministry said. The flights have been scheduled for yesterday and today by the Civil Aviation Administration, with the cruise operator covering all associated costs. The MSC Bellissima, carrying 4,341 passengers, departed from Keelung on Wednesday last week for Okinawa,
China is deploying its largest navy fleet in regional waters in nearly three decades, posing a threat to Taiwan that is more pronounced than previous Chinese war games, the Ministry of National Defense said today. Speaking in Taipei, ministry spokesperson Sun Li-fang (孫立方) said the scale of the current Chinese naval deployment in an area running from the southern Japanese islands down into the South China Sea was the largest since China held war games around Taiwan ahead of 1996 Taiwanese presidential elections. China's military has yet to comment and has not confirmed it is carrying out any exercises. "The current scale is
RSS