Qantas business units spin off attracting interest from many
A Reuters USA reports says that Qantas has had discussions with “many people” interested in its fleet, frequent flyer, and freight businesses, which the Australian airline is looking at partially spinning off, its chief financial officer told Reuters on Monday.
Qantas, the largest airline in Australia and the target of a failed buyout bid earlier this year, is considering selling parts of its frequent flyer program and freight operation.
It is also reviewing various alternatives, including a joint venture with an airplane leasing company, for its fleet of more than 200 planes.
“Many people have come and talked with us (about these businesses),” Qantas CFO Peter Gregg told Reuters in an interview on the sidelines of a Merrill Lynch investor conference.
A decision on the future ownership of these businesses will not be made until after the company releases half-year results in February or March of 2008, he said.
And there is work to be done if the company expects to prepare its freight unit for a possible spinoff.
Chief Executive Geoff Dixon said Qantas will have to make some acquisitions in order to establish its freight operation as a stand-alone business.
Speaking at the conference, he said some discussions were ongoing, but declined to elaborate.
Qantas, which has forecast 30 percent growth in pre-tax earnings in fiscal 2008, was still confident in its ability to grow, despite a slowing U.S. economy and mounting competitive pressure in Australia, where Singapore’s Tiger Airways is starting up service.
“We believe the U.S. problems will be contained,” said Gregg. “We haven’t seen any evidence” that the slowing U.S. economy is spilling over to Australia.
While low-cost unit Jetstar is seeing some pricing pressure from new competition, “we’re not seeing any impact on our business overall,” said Gregg.
He said international and domestic bookings were both “strong.”
“We still believe our outlook (for 30-percent profit growth) is safe,” said Dixon
Report by The Mole
John Alwyn-Jones
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