Texas Pacific Plan Sale of Qantas Assets

Published: 05/02/07

Rumours emerged over the weekend that Texas Pacific, the investment group vying for control of Australian airline Qantas plans to asset strip the carrier in order to fund its takeover. A spokesman for the group, claimed that it was likely that the investment group would unlock value in Qantas by the sale of non-flying assets such as the frequent flier scheme, the freight arm, and the leases on terminal buildings.

Despite earlier assurances that this would not happen, many employees at Qantas believed in inevitable that the vast debt burden that the takeover would bring to the airline would ensure that job losses and the sale of many prized assets would follow.

Analyst Matt Crowe at JPMorgan claimed that the consortium could recoup more than USD3 billion of their investment by selling off the assets, which could be leveraged in the future to fund the purchase of Singapore Airlines or another Far East carrier, which would allow Qantas unrivalled access on many routes across Asia, including flights to Shanghai.

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