Qantas Troubles

Submitted by Share Trading on 10 March, 2010 - 09:01

Qantas (QAN) currently has troubles in two areas via two partially owned companies: Jetset Travelworld (JET) and Air Pacific. Qantas owns 46 percent of Air Pacific while they own 58 percent of JET after a merger of Qantas Holidays and Qantas Business Travel with Jetset which created Australia's largest listed travel agency franchise.

Jetset Travelworld has underperformed while its competitors int he travel industry have captured the rebounding travel market. The company's sharemarket value has declined about 60 percent since the merger in 2008. The merger between company entities was part of a segmentation strategy intended to see various Qantas businesses (including the frequent-flyer program) transferred into vehicles that would be separately valued by the market but with the airline maintaining control.

Qantas has been quiet over their sale talks of Air Pacific with the Fiji government which occurred 6 months ago. Air Pacific is one of Qantas' other troubles with the airline facing competition and recording losses as Virgin Blue's V Australia and Jetstar flies to Fiji.