A significant drop in the share price today. We are massively under the QAN offer price.
The market knows that the bid from QAN is anti competitive although we shouldn't underestimate the ACCC's ability to support ex government entities. The ACCC have form.
Meanwhile, I can't help but notice that Virgin are using more Alliance planes than Qantas these days. The wet lease deal with QAN got off to a "flying" start but has dropped off a fair bit. I hope QAN are paying AQZ handsomely whilst those Embraers sit idle on the tarmac. Whilst the Virgin flying has been predominately F100s and F70s, today we have an Embraer shuttling between Brisbane and Townsville for Virgin.
I can only think of a few reasons for QAN wanting to take over AQZ. The main reason being to stymie competition, preventing Virgin from doing a significant tie up with Alliance. Likewise, it might be to prevent Singapore Airlines or Air New Zealand (or both together) taking over AQZ with a fleet of Embraers ready made to establish domestic operations in Australia. (This possibility is more remote as Virgin enters talks with Air NZ about a merger.) The only other reason I can think of to explain Qantas' actions is that the contract for AQZ to supply wet lease Embraers to QAN might be a disaster for QAN and the best way to undo it or hide it is to take over the supplier.
Heres to hoping the ACCC has the good sense to see through QAN and stop the takeover.
AQZ Price at posting:
$3.27 Sentiment: Hold Disclosure: Held
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