QF concerned over DJ ownership restructure

[markis10]

QANTAS Airways has called for regulators to take a close look at Virgin Australia's proposed ownership restructure.

Qantas general counsel Brett Johnson says the national carrier is concerned that the mooted change is likely to result in foreigners having effective control of the day-to-day operations of Virgin's international operations.
Mr Johnson says this would be in breach of Australia's obligations under the many air services agreements (ASA) with other countries.
"Effective control at the day-to-day management level is of key importance in analysing compliance with obligations under the ASAs," Mr Johnson said in a submission to Australia's International Air Services Commission (IASC) yesterday.

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[yohy?!]

Reminds me of the movie "Liar, Liar":

Jim Carey: "Your Honour, I object!"

Judge: "On what grounds?"

Jim Carey: "It's devastating to my case!"

 

[Noob]

It really is a lot like the Telstra argument. It is not like the shareholders were not fully aware of the restrictions which would be in place over the ownership of the company when they decided to purchase the airline - now they cry that it isn't fair? Obviously when they bought the company they thought the BRAND made up for that..so who's fault is it for devaluing that same brand?

 

[MarcB]

I am not going to admit to having read the submission (or to being an expert on this issue) - but regardless of QF sentiments, I do agree that it seems incredibly unfair that QF have to play by one set of rules and DJ can play by another. I read an article last week (sorry, can't remember the source) that suggested that QF had approached the Government to request a review of the The Qantas Sale Act so that they could consider similar options as DJ has indicated it is contemplating. That request was denied.

I appreciate the sentiment that QF is the legacy carrier - and for a long while, has had a considerable advantage (some would argue it still does). However, over time, if they are not able to respond to external factors in the same or similar way as other carriers that are competing in the same market, then they will fail - this is basic economics. All the while, QF, instead of being able to generate additional share capital from overseas, are forced into cutting spending and delaying new aircraft, at the expense of their customers who cry foul that QF don't care about them. Again, I am sure that some of the motivations are based on costs, but is it really fair to compare QF's response to DJ and other competitors when they are constrained in a way that those competitors are not?

 

[ric_melb]

The plan is that Virgin International will be owned by the existing shareholders of Virgin Australia through some structure, thus keeping Australian ownership at current levels of under 49%. But then Virgin Australia will be free to have overseas ownership of over 49%. Branson holds 26% and Air New Zealand 20%. Etihad have declared that they want a shareholding in VAH. Lets assume they also go for 20%. So we have a listed entity that then has foreign ownership of 66%, but structurally Virgin International is still at 46%. Maybe within the regulations, but seems to make a mockery of them. Just my thoughts.

 

[markis10]

The proposed changes are very similar to the way AN was set up as far as its holding companies and international arm, QF has been trying for years to rid itself of the shackles put in place when they were gifted the assets of Australian etc thanks to Mr Keating et al, pretty much a case of same same but different !

 

[elbarto]

Qantas is right to ask for the qf act to be looked at. The air navigation act should also be looked to at being consistency around ownership rules.


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