AAP General News (Australia)
12-15-2006
What the Australian papers say on Friday, December 15, 2006
SYDNEY, December 15 AAP - The $11 billion private equity takeover of Qantas dominates
today's editorial columns nation-wide.
The Sydney Morning Herald tells its readers to forget the sleigh because this year
Santa is arriving by Qantas jet, his bag crammed with handsome gifts for the architects
of the airline's takeover.
"But when the fees and bonuses have been distributed to the deal-makers, will there
be Christmas cheer for the airline's customers? the Herald asks.
"The figure that will most interest Australians is not the $11 billion price on the
takeover, but the cost of a ticket. And travellers may well be apprehensive," it says.
"The bid of $5.60 a share is one-third more than Qantas shares were less than six weeks
ago when the bid was first mooted," says the paper, "
"That's great for shareholders, but such a hefty premium has to be paid for. That means
increasing fares or making Qantas even leaner, or both"
The Herald says, however, that Airline Partners Australia - the group mounting the
bid - insists there will be no dramatic changes. It says it has no strategy to break up
the airline, cut regional services or move maintenance operations offshore.
But, the paper adds, such assurances would be more reassuring if Qantas's chief executive
Geoff Dixon had not bluntly refused to rule out job cuts.
The Australian newspaper's main editorial says that by accepting the $11 billion takeover
offer, the Qantas directors have delivered the federal government a complex issue to consider
over Christmas and into an election year.
"It is difficult to imagine a more iconic Australian company than the 'flying kangaroo',
says The Australian, "but this alone is no grounds to block the buyout.
"The level of
foreign ownership will also fall under a deal put forward by the Airline
Partners Australia consortium, providing no reason to block the deal on
foreign investment
grounds.
"But company borrowings will increase dramatically, exposing the national carrier to
much greater financial risk, just as the world's central bankers are sounding the alarm
over the frenzy in leveraged buyouts, such as the one that has snared Qantas."
The Australian Financial Review says Qantas is an icon, an institution that attracts
a level of public affection and respect that far exceeds its function as a national flag-carrying
airline.
"This is a legacy of its origins as a government-owned airline with a superlative
safety record," says the Fin Review.
"Qantas has been Australia's most cherished and visible 'face' to the world.
"However, it is a listed company, operating in a fiercely competitive global aviation
market, subject to all the rules of modern commerce."
Brisbane's Courier Mail says the flying kangaroo may yet still call Australia home
under its
new owners.
But that, says the paper, will be about the only place where the dependable Qantas
tradition continues if the bid to buy the national carrier succeeds.
"While unions and those who remain concerned about the incursion of
foreign interests
into big business in Australia will howl about this proposal, no one should be surprised
that it is on the table, or that the airline's directors supported it," says the Courier.
"The international travel market is in better shape (although far from robust), rationalisation
of the industry continues apace and Qantas (for the moment) operates with regulatory privileges
not enjoyed by many of its market rivals.
"There are several ways in which Qantas can do business better to the benefit of both
the travelling public and its shareholders.
"All of these factors make it ripe for
new ownership, particularly if the
new owners
have a reputation for increasing efficiencies."
Melbourne's Herald Sun says there are many unanswered questions about the future of Qantas.
The newspaper says the carrier was bought at the top of the market cycle, but questions
what its
new owners would do in an economic downturn.
"Despite the assurances, there are concerns over jobs, maintenance, routes, competition
and airfares," it says.
"Living on a relatively isolated continent, our national carrier retains a special
place in the hearts and minds of Australians.
"If it is to remain an Aussie jewel, the
new owners must proceed with caution."
The Sydney Daily Telegraph's main editorial says there seems to be no cause, at this
early stage, for concern over the move in Qantas.
The paper notes that the airline will remain in Australian control, there seems to
be no plans to slash services or staffing levels, and current equity holders appear to
have made a killing.
"Winners all round," says the Telegraph.
Yet Prime Minister John Howard's undertaking to "keep an eye" on the deal is reassuring,
says the paper.
"Qantas is an Australian business emblem and it would be a tragedy if its 85 years
of safety and successes were not treasured and maintained.," the Telegraph adds.
Finally, the Melbourne Age focuses on
new Labor leader Kevin Rudd.
With an election campaign potentially only eight months away, The Age says Mr Rudd
has made an impressive start.
During his "listening tour" across the country, Rudd has aimed to reveal himself to
a broader constituency and show a
new style of leadership, says the paper.
(One) that is based on freshness, ideas and precise communication - and not bound by
ideology," the newspaper says.
"Rudd's emphatic declaration that socialism has no place in his view of modern Labor
will be seen in some quarters as no more than a statement of the obvious - except that
it is at odds with the party's anachronistic platform," it says.
The editorial says Rudd's impressive beginning should end the complacency evident in
some areas of the government.
"But it is only a beginning. Rudd's challenge now is to turn ideas into costed policies
that address the many challenges facing the nation - and to give the electorate a genuine
alternative at next year's federal election."
AAP it/
KEYWORD: EDITORIALS
2006 AAP Information Services Pty Limited (AAP) or its Licensors.
