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Airline Affairs
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Govt Stalls Qantas Float:
In what has been a widely approved decision, the Federal Government has deferred the public float of Qantas till at least the final quarter of 1994 The move, which was the focus of our July editorial, will greatly improve the airline’s chances of raising more than $2bn on the open market. The government cited the terrible state of the world air transport sector as the primary reason for the delay, stating that to sell Qantas now would be premature and that the delay of a year will add greatly to its eventual value.
Benefits of delaying the float include: an increase in traffic as the economy improves, an increase in profitability as the numerous significant cost cutting programmes of the past two years begin to reap dividends, the full absorption of Australian into Qantas and the reduced debt of the ‘new’ Qantas plus savings and profit opportunities via QF’s link with British Airways. BA paid $665m in December 1992 for its 25% shareholding in Qantas, the remaining 75% is presently held by the Australian Government.
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