Indonesia's Lion Air in talks to buy Qantas stake in Jetstar Asia

[SeatBackForward]

Indonesia's Lion Air in talks to buy Qantas stake in Jetstar Asia

(Reuters) - Indonesia's Lion Air Group is in talks with Qantas Airways Ltd (QAN.AX) about buying the Australian carrier's stake in the Singapore-based affiliate of its budget airline Jetstar, a person familiar with the matter told Reuters.

The talks to buy out Qantas' 49 percent stake in Jetstar Asia Airways, the Singapore affiliate, began a few months ago and are still at an early stage, the person said, declining to be identified because the matter was confidential.

Any purchase would be subject to approval from the Singapore regulators, the source added. The value of any potential deal is unclear.

A Qantas spokesman declined comment on the matter, saying it was "speculation". Jetstar Asia and Lion Air Group also declined to comment. The Civil Aviation Authority of Singapore had no immediate comment.

Any potential sale would help the bottom line of Qantas, which saw stiff competition at home and overseas pushing it deep into the red in the six months ended Dec. 31.

In February, Qantas said it had shed staff, slashed spending and sold gaz-guzzling planes as part of its most radical shake-up since it was privatized 20 years ago. It has also halted the expansion of Jetstar, all steps aimed at convincing the Australian government that it is worthy of the state assistance it says it desperately needs.

(more: Indonesia's Lion Air in talks to buy Qantas stake in Jetstar Asia: source | Reuters)

To me the last paragraph quoted above is an interesting one. Despite all those things, they still need to sell to help their balance sheet?

 

[TomVexille]

I wonder if Joyce would let go of his J* dream?

 

[Ansett]

Thought Jetstar was the cash cow and Asia was the Golden Goose?

 

[TomVexille]

Thought Jetstar was the cash cow and Asia was the Golden Goose?

That's what you are supposed to believe

 

[samh004]

Thought Jetstar was the cash cow and Asia was the Golden Goose?

That's what you are supposed to believe

But if it wasn't Lion Air would see that in the books and not be interested.

I don't see how losing a stake in one of the many JQ's would be beneficial to QF. Surely, they at least need some sort of role in every JQ subsidiary.

Perhaps lines have been crossed and Lion Air isn't after JQ, but Qantas is after a part of Lion Air or going into a JV for a JQ Indonesia?

 

[cmon0005]

Lets hope QF dumps the whole lot (J* Asia)

 

[TomVexille]

But if it wasn't Lion Air would see that in the books and not be interested.

I don't see how losing a stake in one of the many JQ's would be beneficial to QF. Surely, they at least need some sort of role in every JQ subsidiary.

Perhaps lines have been crossed and Lion Air isn't after JQ, but Qantas is after a part of Lion Air or going into a JV for a JQ Indonesia?

Interesting proposal, you may not be far off the mark. Although JQ is supposedly the cornerstone of the Asian strategy to provide connections to/from QF services into SIN, NRT and HKG (which still needs to get off the ground)

 

[777]

Perhaps lines have been crossed and Lion Air isn't after JQ, but Qantas is after a part of Lion Air or going into a JV for a JQ Indonesia?

They can't afford it, surely?

 

[samh004]

Lets hope QF dumps the whole lot (J* Asia)

I'm not sure losing a share in a company that fulfils a role Qantas doesn't would be beneficial, especially if they ended up providing competition.

 

[cmon0005]

I'm not sure losing a share in a company that fulfils a role Qantas doesn't would be beneficial, especially if they ended up providing competition.

I think that's debatable!

JQ Asia, (and other such JQ Asian ventures) are a thorn in QF's side in my opinion, especially considering the growth boom for JQ Asia and affiliates seems to be slowing down, (although JQ Japan seems to be growing then again its still 'fairly' new).

Dump JQ Asia, use cash to pay down QF debt further, and invest heavily in new fuel efficient fleet, expand routes/OW codeshares and GROW!

One can dream...

 

[moa999]

Paywalled AFR article.

In Summary

The Australian Financial Review understands Lion Air made an unsolicited approach to Qantas about the possibility of a deal but there are no ongoing talks between the pair.

 

[SeatBackForward]

Paywalled AFR article.

In Summary

QF need to get Lion on the line again.

 

[Sprucegoose]

If confirmed by QF this is indeed a confusing strategy.