Qantas eyes company split

Airline mulling a split of its domestic and international arms to encourage investment: report.

Australia’s national carrier is considering a major shake-up of its business, which could see its domestic operations separated from its international arm as it chases more offshore investment, Fairfax Media reports.

The speculation comes as Qantas Airways (QAN) prepares to announce the outcome of a major strategic review next month, with much of the previous discussion focussing on the prospect of a demerger or partial sale of its frequent flyer division.

However, the slight change to the Qantas Sale Act last week to allow for increased foreign investment is believed to have led the airline to more strongly consider a split of its international and domestic operations. Such a plan would echo a move made by main rival Virgin Australia, which has an unlisted international entity that is majority-owned to comply with the Air Navigation Act, while its local operation is primarily owned by Air New Zealand, Singapore Airlines and Etihad Airways.

Deutsche Bank analyst Cameron McDonald said a split would have many challenges, but would likely be a net positive for the airline.

''That would take some work but we don't think it would be impossible to achieve,'' Deutsche Bank analyst Cameron McDonald told Fairfax. ''I do think that [Qantas] obviously are keen to have a seat at [the global airline consolidation] table if and when it becomes appropriate.''

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles