Qatar Airways Near to Acquiring up to 20% of Virgin Australia

[justinbrett]

Quite possibly...not sure however that the Aussie govt or decision makers allegedly on behalf of the country is that versed on "big picture " stuff..as "Port of Darwin" come immediately to my off topic mind!

Past failures doesn’t mean we need to keep making them

That example has been well acknowledged as a failure by many.

Major changes to the FIRB framework were announced earlier this year.

 

[dajop]

All this debate about what QR would do. They have form.

QR own 25% of IAG. There's been changes around codeshares and Avios, but BA, IB, VY, and EI all seem to operate in their own way, and not at all like QR. QR's main interest seems to be strategic (in terms of locking in loyalty in key markets) and generating a return. It does not at all seem to reshape the carriers in it's own image. So for VA? Probably the loyalty offering is most significant. Beyond, that leveraging the VA structure to fly to provide additional capacity to DOH.

 

[RooFlyer]

I spent 20 years in the military. I could write you a thesis on the different types of control in that setting (operational control is one). So I think you know that I know there are different types of control in the corporation sense.

I am talking in a general sense. Ie, (oxford) “the power to influence or direct people's behaviour or the course of events.”

Yes, but the topic is not about control in either the military or the general sense is it? We are talking about the influence (some 'control' of you like) an investor like QR might have on VA if they invest. It's an entirely different concept and thing.

You talked about 'complete control'. That would only occur if they held 100% of the equity and even then the lenders ( no matter who that was) would have some say.

I've done this to death now, and apologies to those that are bored. As you have given some of your background, let me give some of mine. 10 years in investment banking M&A including it's private equity dealings. I then ran a private company (not mine but had a significant shareholding) and took it though it's IPO. Managed it's relationships with its public shareholders, all that stuff. Let me tell you 'control' of a company is a many and varied thing.

If QR take an equity stake it will be fascinating as to how it pans out. We can all hope it brings forth a better, stronger airline.

 

[elanshin]

Quite possibly...not sure however that the Aussie govt or decision makers allegedly on behalf of the country is that versed on "big picture " stuff..as "Port of Darwin" come immediately to my off topic mind!

Just because the government has done questionable decisions in the past doesn't mean they approach everything the same way.

There are other relationships problems Aus has with Qatar right now would be political landmine domestically as well if Labor responded wrongly. The lack of formal apology from QR for the search of the Aussie women in 2020 is still an ongoing point.

Just to be clear, I'm happy for QR to invest in VA in the way it's doing it. It means they can likely get past regulators and likely improve VA without it being a controlling entity that the government likely won't allow in 2024.

 

[PERLHR]

Just because the government has done questionable decisions in the past doesn't mean they approach everything the same way.

There are other relationships problems Aus has with Qatar right now would be political landmine domestically as well if Labor responded wrongly. The lack of formal apology from QR for the search of the Aussie women in 2020 is still an ongoing point.

Just to be clear, I'm happy for QR to invest in VA in the way it's doing it. It means they can likely get past regulators and likely improve VA without it being a controlling entity that the government likely won't allow in 2024.

Not wanting to open up previous issues really but I believe the Federal Court threw out the claims as QR were not actually directly involved in any search. In other words..nothing to do with the airline with that rather dire and unfortunate event.

However all is well with Aussie as they continue to embrace lots of Chinese tat, Chinese investment and takeovers. Any learning from previous encounters going on here?

Anyway enough. I think we can beg to differ and I hope VA as an airline are able to give their own pax an even better service in the coming months with this possible initial 19 to 20 percent QR investment.

 

[RooFlyer]

Sure, they can get a vote. But it’s gonna be from the same pool of people

I'm sorry, I have to assure you that CEOs of unlisted companies aren't usually appointed by a 'vote' around a board table. It'll be a candidate agreed to by Bain and major investor ( QR, if it happens).

I've just landed at HBA so I'll step away

 

[justinbrett]

You talked about 'complete control'. That would only occur if they held 100% of the equity and even then the lenders ( no matter who that was) would have some say.

You know what, I did a text search of this thread. The first and only use of that phrase is by you just now. Aren't you some kind of writer? Even I know you don't put words in quotes that aren't word for word what what a person said.

Yes, but the topic is not about control in either the military or the general sense is it? We are talking about the influence (some 'control' of you like) an investor like QR might have on VA if they invest. It's an entirely different concept and thing.

I can talk in a general sense without having been a CEO. This forum is for everyday people who can speak in everyday terms and when I use phrases like majority control or full control, I can do so, and if someone wants to correct me and say "actually that means something else to me" I'm happy to rephrase to get my point across. That doesn't make my point invalid because I don't speak your jargon. It's a little condescending to be honest.

The whole point of what I was saying is the FIRB will (or at least should) ensure the state of Qatar does not have undue influence on VA.

All this debate about what QR would do. They have form.

QR own 25% of IAG. There's been changes around codeshares and Avios, but BA, IB, VY, and EI all seem to operate in their own way, and not at all like QR. QR's main interest seems to be strategic (in terms of locking in loyalty in key markets) and generating a return. It does not at all seem to reshape the carriers in it's own image. So for VA? Probably the loyalty offering is most significant. Beyond, that leveraging the VA structure to fly to provide additional capacity to DOH.

And I agree. It's quite possible, even probable, Qatar just wants to invest. It owns Harrods, not for any evil purpose, just to own Harrods as it makes a lot of money. It's still very Harrodsy (and British) to me.

I'm sorry, I have to assure you that CEOs of unlisted companies aren't usually appointed by a 'vote' around a board table. It'll be a candidate agreed to by Bain and major investor ( QR, if it happens).

Again, general terms. I mean they get a say. It's negotiated.

 

[simmomelb]

Can I just say, and I mean this in the most respectful way, but I am waiting with bated breath for the formal announcement, as this is all just speculation (nothing more), which has been repeated to death.

I'll be happy to return here to see everyone's thoughts discussed respectfully when we have facts on the table
Not long now, hopefully.

 

[HS-TQE]

A good chance this won't be another "Singapore" situation from the Borghetti and Scurrah eras.

I'd agree that everyone would be waiting with baited breath for the (assumed) pending formal announcement with the actual outcome/details.

 

[RooFlyer]

You know what, I did a text search of this thread. The first and only use of that phrase is by you just now. Aren't you some kind of writer? Even I know you don't put words in quotes that aren't word for word what what a person said.

Sorry, my bad. As a writer, an editor usually checks my work before it goes out.

Again, general terms. I mean they get a say. It's negotiated.

Yes which is exactly what I’ve been saying for about the last three pages.

I regret if I have sounded condescending - it was not my intention. But some of the discussion here has been so off the mark, so not in the real world, ( and sometimes plain wrong) it really needed to be pulled up. I do have experience in the topic being discussed here, as you have experience in flying matters that we should be able to learn from each other.

 

[serfty]

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[melb78]

I wonder what the odds it will be announced today or tomorrow

 

[RooFlyer]

Interesting comments in the Oz this morning that VA/QR have sought 'preliminary green light' from FIRB on the proposed deal. Makes sense, I guess.

Project Doubles: The Qatar deal Virgin Australia believes can help it up the ante against Qantas

So it’s not surprising that Qatar and Bain have sought a preliminary green light from the Foreign Investment Review Board before announcing any deal.

Treasurer Jim Chalmers recently announced that the government would attempt to fast-track the takeover processes for foreign companies wishing to invest in Australian companies – with a carve-out requiring state-owned potential acquirers to undertake more detailed investigation.

Qatar Airways, as well as Qantas joint venture partner Emirates, Etihad, Singapore Air and others are state-owned or partially state-owned.

and in a separate story, touches on the CEO as well

Just who will next take the reins at Virgin next is dependent on what happens with Project Doubles.

Qatar would undoubtedly want a say if the deal proceeds. Clearly the ownership structure of the airline is relevant for the two shortlisted candidates too.

 

[justinbrett]

Interesting comments in the Oz this morning that VA/QR have sought 'preliminary green light' from FIRB on the proposed deal. Makes sense, I guess.

Project Doubles: The Qatar deal Virgin Australia believes can help it up the ante against Qantas



and in a separate story, touches on the CEO as well

So apparently Project Doubles is a reference to Tennis (of which JH is a fan). So probably not a literal doubling but the two airlines working as a team.

There’s also Project Match, which is the IPO, and Project Game, now scrapped, which was a Rex takeover,

https://www.theaustralian.com.au/subscribe/news/1/?sourceCode=TAWEB_WRE170_a_GGL&dest=https%3A%2F%2Fwww.theaustralian.com.au%2Fbusiness%2Faviation%2Fvirgin-australia-on-the-ball-with-qatar-rex-and-ipo-talks%2Fnews-story%2Fe11cdbf9273af434f5a1bb0c4c4c88ae&memtype=anonymous&mode=premium&v21=HIGH-Segment-1-SCORE&V21spcbehaviour=append

Also not a coincidence the Qatar PM visited Australia a few weeks ago. Tricky time for the Australian government going into election season.

 

[PERLHR]

So apparently Project Doubles is a reference to Tennis (of which JH is a fan). So probably not a literal doubling but the two airlines working as a team.

There’s also Project Match, which is the IPO, and Project Game, now scrapped, which was a Rex takeover,

https://www.theaustralian.com.au/subscribe/news/1/?sourceCode=TAWEB_WRE170_a_GGL&dest=https%3A%2F%2Fwww.theaustralian.com.au%2Fbusiness%2Faviation%2Fvirgin-australia-on-the-ball-with-qatar-rex-and-ipo-talks%2Fnews-story%2Fe11cdbf9273af434f5a1bb0c4c4c88ae&memtype=anonymous&mode=premium&v21=HIGH-Segment-1-SCORE&V21spcbehaviour=append

Also not a coincidence the Qatar PM visited Australia a few weeks ago. Tricky time for the Australian government going into election season.

If Qatar airlines are thinking of taking around 20 percent of a privately run company (VA) that might actually make them more successful
and the Australian Govt considers that "tricky" during an official visit from the Qatar PM around any election time then they have a rather dim and isolated view of the worlds issues and their own confidence in governing issues domestically and internationally effectively.

 

[justinbrett]

If Qatar airlines are thinking of taking around 20 percent of a privately run company (VA) that might actually make them more successful
and the Australian Govt considers that "tricky" during an official visit from the Qatar PM around any election time then they have a rather dim and isolated view of the worlds issues and their own confidence in governing issues domestically and internationally effectively.

No the visit has come and gone and largely escaped any media attention.

Not wanting to talk politics as that is forbidden here, I just meant the government is not going to be keen to make a decision that might upset some even if others love it. Steady as she goes. They’ll at least analyse that a bit before jumping in.

I’m just saying don’t be surprised if they put it on the back burner until next year.

 

[Saab34]

Well nothing happened last week with some journalists very sure it was going to be announced ‘by the end of the week’.

Let’s just be honest. Nobody probably knows anything. Unless you are the top brass in either airline, you likely know diddly squat.

 

[jase05]

Well nothing happened last week with some journalists very sure it was going to be announced ‘by the end of the week’.

Let’s just be honest. Nobody probably knows anything. Unless you are the top brass in either airline, you likely know diddly squat.

The talk at work today was that the FIRB would make its decision known before Thursday this week so I guess it depends on how that goes

 

[ozstamps]

My guess 20% is a done deal, many weeks back, and the Press Conference showing much hand shaking and smiling is all that is holding up it being publicised.

FIRB will not care about 20% IMHO, and should rubber stamp it.

The Feds have just tossed in a bucket of money on backing much of REX regional, (that I do not believe has been fully disclosed to those of us paying for it) and will have no stomach to see the perception that 'competition is lessening even more' by messing with a Qatar minor stake.

Qantas and its budget carrier Jetstar had 61.8 per cent market share of domestic passengers at the end of March, ahead of Virgin’s 31.3 per cent, which could expand with Qatar as a strategic backer.

 

[random111]

I really hope VA will have relentless focus on improving the customer experience, if Qatar enables that great, if it doesn't go ahead, I hope VA has a plan B.

Reading through this forum and others, so many Aussies are so fed up with Qantas, feels like there's a genuine opportunity to take sustainable marketshare.

Not saying their CX is bad, as a gold member its great in Aus and VA has been my airline choice for business travel over past 12 years, early days post Borghetti it was fantastic!

I dont have the answers as to what it would take to win the marketshare but I'm sure the clever people at VA and/or Qatar can think of innovative ways to improve or can identify the CX gaps that need plugging e.g. a more consistent loyalty experience across partner airlines, particularly when traveling in ports that are not a direct flight away from Aus - whether a partner model can consistently and sustainably enable this vs. alliance model, unsure!

Introducing the wide body plane again, particularly to destinations like Nadi and Denpasar, 5-6 hours is too long for me on a narrow body would be another one on my wish list!