Qatar in talks to take up to 20pc stake in Virgin

[RSVKanga]

. Pax can buy these tickets without having to touch home base of SQ or EK. But maybe I have it all wrong.

Yep, both fifth-freedom and seventh-freedom flights give you that possibility. But, as mentioned above, fifth-freedom and seventh-freedom flights are completely different. All the routes you listed were fifth-freedom.

 

[RooFlyer]

You're gravely confusing between fifth-freedom and seventh-freedom flights, which are competely different, What you've listed above are all fifth freedom services, and make geographical sense. eg EK flying from Dubai to New York via Milan.

I'm not gravely confusing anything. I'm having a fabulous time, thank-you.

Apparently you can't see that AA flying SYD-BLR (your example) would be a fifth freedom after LAX-SYD, just the same as EK doing 5th freedom MIA-BOG after DXB-MIA. What's the diff, please?

with unlimited oil funds

Are you really playing that silly, obviously false card?

 

[HS-TQE]

That speculation in Crickey is as likely as the numerous "VA to join Star Alliance" or "SQ to TAEK OVAH VA !!1!!" speculation back in the VA 1.0 days of Borghetti and Scurrah.

 

[elanshin]

Also we do have rules and laws against predatory pricing.

You're not going to see VA start providing QF service whilst being JQ prices. The other 80% of the investors of VA wouldn't allow it to bleed massive amounts of money and the ACCC would step in as well.

In a nutshell, you're not going to see QF wiped out. Competitive sharp pricing, sure.

If anything the nightmare scenario for the everyday flier is QR having significant control, then QR and QF mend relationships. Then we'd have a very messed up domestic market where it's synergistic duopoly forces at work.

 

[RSVKanga]

Are you really playing that silly, obviously false card?

Credible evidence to back up your claim?

Qatar Airways is 100% owned by the non-capitalist dictatorship with an oil supply (and hence wealth) of about 400 years remaining. It's the only reason Qatar Airways is relevant globally, and succeeds, and flexes its muscles. There is absolutely nothing to suggest that these unfair oil funds won't play a role in VA if they are successful in taking up the stake.

 

[MooTime]

Credible evidence to back up your claim?

Qatar Airways is 100% owned by the non-capitalist dictatorship with an oil supply (and hence wealth) of about 400 years remaining. It's the only reason Qatar Airways is relevant globally, and succeeds, and flexes its muscles. There is absolutely nothing to suggest these unfair oil funds won't play a role in VA if they are successful in taking up the stake.

Your know that Qantas is 40% foreign owned....it's ASX listed. Check the register.

Now Someone will tell me it's less than than that and that's fair enough, just that's my latest info.

It's hardly an all Australian carrier. Stranding Aussies abroad, selling ghost / cancelled flights, give pollies CL access is where it's at. Yeah national this national that.

Bring on QR to VA....

 

[PERLHR]

You're gravely confusing between fifth-freedom and seventh-freedom flights, which are competely different, What you've listed above are all fifth freedom services, and make geographical sense. eg EK flying from Dubai to New York via Milan.

Qatar Airways operating PER-LHR and SYD-JNB would be seventh-freedom services that don't make any sense at all in terms of the country Qatar. They won't originate or terminate in DOH. So yes, it would be a threat to Australia's economic sovereignty, given QR's ownership structure, oil funds and them competing with our Australian-owned national carrier on routes irrelevant to them.


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Capitalism involves fair market forces playing a part in determining that the market decides. Since QR's owner is an autocratic non-capitalist regime with unlimited oil funds, it's more of an assault on capitalism rather than an endorsement of it if QR buys VA 20% and the above scenario happens.

Post automatically merged: Friday at 8:47 PM

Again, another person gravely confusing fifth-freedom with seventh-freedom routes. See a

And if the flights do route via DOH? Who knows they might! They are quite clever...

 

[RSVKanga]

Your know that Qantas is 40% foreign owned....it's ASX listed. Check the register.

There is Commonwealth legislation that ensures Qantas is majority Australian owned. Most major national carriers have some degree of foreign ownership in them, but they're all restricted/limited (in different ways) to at least below 49% to protect national icon/asset status. SQ, CX, JL, NZ, UA, BA, AA, DL, LH just to name a few.

Stranding Aussies abroad, selling ghost / cancelled flights, give pollies CL access is where it's at. Yeah national this national that.

Irrelevant to the thread topic. There are more appropriate threads to debate this, and it has been debated enough.

 

[MooTime]

There is Commonwealth legislation that ensures Qantas is majority Australian owned. Most major national carriers have some degree of foreign ownership in them, but it's restricted to protect national icon/asset status. SQ, CX, JL, BA, AA, DL, LH just to name a few.


Irrelevant to the thread topic. There are more appropriate threads to debate this, and it has been debated.

Yep no worries just saying how Qantas is really our national carrier.....NOT in many regards.
We can choose to ignore the facts to suit our own agenda

 

[elanshin]

Credible evidence to back up your claim?

Qatar Airways is 100% owned by the non-capitalist dictatorship with an oil supply (and hence wealth) of about 400 years remaining. It's the only reason Qatar Airways is relevant globally, and succeeds, and flexes its muscles. There is absolutely nothing to suggest these unfair oil funds won't play a role in VA if they are successful in taking up the stake.

And if they subsidise Australian airfares that's fine. There's only so much they can do without crossing a line.

As I said, if this was 40%-100% stake in VA, I too would agree with you. But this is 20%. Are you going to suggest the other 80% of ownership also happily lose money like no tomorrow? Or QR colludes with them all and pay them billions to play along?

And we have laws and rules against predatory practices too. It's illegal to drop your prices st substantial losses with the goal of driving your competitor bankrupt and we've already seen our governments massively protect QF (both parties actually) when needed.

 

[MooTime]

And if they subsidise Australian airfares that's fine. There's only so much they can do without crossing a line.

As I said, if this was 40%-100% stake in VA, I too would agree with you. But this is 20%. Are you going to suggest the other 80% of ownership also happily lose money like no tomorrow? Or QR colludes with them all and pay them billions to play along?

And we have laws and rules against predatory practices too. It's illegal to drop your prices st substantial losses with the goal of driving your competitor bankrupt and we've already seen our governments massively protect QF (both parties actually) when needed.

Great points.

 

[RSVKanga]

As I said, if this was 40%-100% stake in VA, I too would agree with you. But this is 20%

20% is enough for significant changes at VA to happen. As already mentioned earlier in the thread, there is insider talk of Qatar flying PER-LHR and SYD-JNB in some sort of collaboration with VA with only a 20% stake.

Also, the likely and common reason why someone acquires 20% in an airline is to provide a stepping stone towards eventually crossing that 51% line.

 

[MooTime]

So what type and amount of % ownership would you envisage....anything but an investment by QR is your answer I imagine.
That scenario never going to eventuate.

QF 40% foreign owned remember.

 

[elanshin]

20% is enough for significant changes at VA to happen. As already mentioned earlier in the thread, there is insider talk of Qatar flying PER-LHR and SYD-JNB in some sort of collaboration with VA with only a 20% stake.

Also, the likely and common reason why someone acquires 20% in an airline is to provide a stepping stone towards eventually crossing that 51% line.

No 20% is not a stepping stone to 51% as the government can intervene and block it at any point.

Significant change yes. Significant strategy shift to massively lose money to bankrupt QF? No way the other investors would get on board with that.

 

[RooFlyer]

It’s being reported that QR have intentions to fly routes such as PER-LHR and SYD-JNB in partnership with VA if they get this stake

In spite of my better judgement, but because there's nothing on the wireless tonight, I had a look at that Crikey story you linked to. Michael Sainsbury - quite a good business journo. I'm surprised to find him wading in the Crickey muck. Anyway, besides the throw-away line you focussed on (shock, horror!!) he observed:

The move would serve to deepen and strengthen the existing codeshare deal between Virgin and Qatar, and has the potential to fast-track Virgin’s international ambitions beyond Bali, New Zealand, Japan and the Pacific.

Critically, it could also improve Virgin’s domestic services by allowing the airline to lease Qatar’s twin-aisle B777s, boosting capacity and passenger comfort. These planes could be used on routes such as East Coast to Cairns and Perth, as well as some existing international routes, pilots suggested to Crikey.

Last year Qatar was prevented by the Albanese government from running more flights into Australia, despite other international carriers such as Turkish Airlines and Sri Lankan Airlines being granted more landing slots. A number of Chinese airlines have ramped up flights to Australia and offer bargain basement prices to Europe via Beijing, Shanghai and Guangzhou. Just this week, Hong Kong’s Cathay Pacific announced it would increase flights into Perth and Brisbane.

A Qatar investment in Virgin would represent a neat way around this impasse that would also serve to increase much-needed competition in the domestic sector.

So that all sounds promising. I really, really hope the QR deal goes through, controlling or non-controlling. I took a further look at QR's other investments in the industry globally and yes, non-controlling is on the cards.# Like their non-controlling shareholding in Sydney Airport, which the nation seems to have somehow survived.

# But I'd really like them to take control. Just imagine a (almost!) seamless QR experience from all those UK and European ports, & the USA, though to Australia and into the Pacific.

Also, the reason why someone acquires 20% in an airline is to provide a stepping stone towards eventually crossing that 51% line.

Huh? The only thing you get with 51% (of an ASX listed company) is the ability to pass ordinary resolutions. You can't pass special resolutions (eg dealing with corporate structure), you don't get control of the cash-flows and you have to treat the other shareholders fairly.

The only 'stepping stone' to 51% from 20% is a full takeover offer, as soon as they get above 20%. Technically:

A person cannot acquire a ‘relevant interest’ in a company’s shares if it would result in that person’s or someone else’s ‘voting power’ in the company increasing from 20% or below to more than 20%, or increasing from a starting point that is above 20% and below 90%, unless the acquisition occurs via a specified exception (such as a takeover bid, scheme of arrangement or with target shareholder approval).#

# Allens handbook on takeovers

 

[RSVKanga]

anything but an investment to QR is your answer I imagine.

Correct. SQ or UA wouldn't be a problem IMO.

QF 40% foreign owned remember.

Onwership of VA vs QF is completely different. QF is our national carrier and, as said before, there is Commonwealth legislation that ensures that it is majority-Australian-owned. There are many sub-restrictions on foreign ownership in QF as well. Most major national carriers have some foreign ownership, but those too are restricted to preserve their national icon/asset status. eg SQ restricts foreign ownership to less than 50% of the free float, US legacy carriers can't be more than 25% foreign owned etc.

But Virgin Australia is a narrowbody semi-budget short-haul airline that was founded by a British billionaire in 2000. Those rules above don't apply to VA.

 

[MooTime]

Correct. SQ or UA wouldn't be a problem IMO.



Onwership of VA vs QF is completely different. QF is our national carrier and, as said before, there is Commonwealth legislation that ensures that it is majority-Australian-owned. There are many sub-restrictions on foreign ownership in QF as well. Most major national carriers have some foreign ownership, but those too are restricted to preserve their national icon/asset status. eg SQ restricts foreign ownership to less than 50% of the free float, US legacy carriers can't be more than 25% foreign owned etc.

But Virgin Australia is a narrowbody semi-budget short-haul airline that was founded by a British billionaire in 2000. Those rules above don't apply to VA.

Semi budget. That's a new one. Yet to hear that line.

Thanks

 

[RSVKanga]

Crikey story you linked to. Michael Sainsbury - quite a good business journo. I'm surprised to find him wading in the Crickey muck. Anyway, besides the throw-away line you focussed on (shock, horror!!) he observed:

In no way was I endorsing the opinionated pro-QR and anti-Australia views in that article. I was just extracting the insider information that it happened to provide:

Insiders suggested that Qatar/Virgin might eventually challenge some of Qantas’ more profitable international routes including Sydney-Johannesburg and Perth-London.

 

[elanshin]

You know the more i think about it. The more I don't want QR as a controlling force for VA. Purely for the scary scenario where QR and QF become friends again and then we'd suddenly lose any semblance of competition domestically.

This is one possible scenario maybe 5years down the line.

Non controlling stake that can help VA out by lending widebodies? By all mean go ahead.
Would be interested to see a VA livery plane with Qsuite to HND .

 

[HS-TQE]

Correct. SQ or UA wouldn't be a problem IMO.

Neither are unlikely anytime soon.

As previously stated SQ has a very poor record at investments in Australia going all way back to Air New Zealand/Ansett in the 90s followed by the Tiger Airways Australia debacle which led to them "selling" the company to VA (with the 2nd half being sold for $1.00).

Considering the reports in the (edit: AFR) stated that VA reps had to approach SQ and SQ showed very little if not zero interest suggests they're still burnt from their last investment in VA 1.0.