Qantas tweaks the plan
A report by David Knibb in Airline Business says that the failed takeover bid for Qantas has become a catalyst for change, invigorating the airline’s board and managers to consider actions that previously were unthinkable.
Qantas management moved quickly after the takeover failed in May to refocus and redefine the airline.
Turmoil and uncertainty had marked the preceding six months while shareholders and government officials considered the private equity bid. Once it was clear that the bid had failed and no new bid was likely, directors and senior management closeted themselves in a marathon meeting to restore stability and put the airline’s strategic planning back on track.
Since then, senior officials have been briefing staff and investors on the airline’s plans.
Some elements of these plans vary significantly from prior policy, with in the past, Qantas having been quite fiscally conservative, with retained capital giving it one of the lowest debt-equity ratios in the industry.
This itself made it an attractive takeover target, allowing bidders to finance more than a third of their A$11 billion ($9 billion) offer from the airline’s equity base.
Qantas is now reviewing plans for a more aggressive use of its own capital and senior managers have hinted and analysts predict it will distribute at least A$2 billion to shareholders over the next 12 months via either a share buy-back or a special dividend.
It also plans more financing from capital rather than debt, with both moves raising the Qantas group’s debt-equity ratio, which could also act as something of a poison pill against another leveraged buyout.
In another break with past policy, Qantas is studying a spin-off of non-core assets and borrowing a page from Air Canada, the likely candidates are the Qantas frequent flyer plan, its holiday booking arm and some freight operations.
CEO Geoff Dixon says Qantas will retain some stake in its loyalty plan and stresses there is no plan to spin off low-cost subsidiary Jetstar, which remains an integral part of the group’s growth strategy.
Other parts of the new strategy include boosting domestic capacity before the launch of Tiger Airways’ new Australian low-cost operation later this year, accelerating a transfer of foreign routes to Jetstar, investing in more new aircraft, creating a freight and logistics venture in Asia, cutting costs and considering unspecified “consolidation opportunities”.
Report by The Mole and Airline Business
John Alwyn-Jones
Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know
Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham
Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago
Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research
Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact
Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference
Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role
Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal
Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination
Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness
Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future
Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
ADS PRO 
Phocuswright reveals the world's largest travel markets in volume in 2025
Cyclone in Sri Lanka had limited effect on tourism in contrary to media reports
Higher departure tax and visa cost, e-arrival card: Japan unleashes the fiscal weapon against tourists
In Italy, the Meloni government congratulates itself for its tourism achievements
Singapore to forbid entry to undesirable travelers with new no-boarding directive