qantas versus virgin, page-57

Aimone,

The old Jetstar dilemma is a tricky one. Yes you are right that they would be a competitor but that is exactly what they are at present as well. I.e. Jetstar is taking market share from the higher yield parent co. (Qantas), so nothing changes there. Whoever ends up owning it will still take market share from QF.

The real problem is, does QF hang onto Jetstar and maintain a bigger slice of the market (with the Jetstar portion performing at a lower yield and still costing a bomb) or do they sell it?

Perhaps your (Air New Zealand) suggestion is the perfect solution, just ditch the whole thing? Problem is, they have created such a costly and sizeable beast that that would most definitely be a massive financial hit for QF to take, to dump a co. that they have over a billion$$$ into (and still no return). I cannot see the current management making that hardcore decision as they are mostly responsible for Jetstar's growth model. Perhaps a new CEO with a completely different viewpoint on LCC's would be the only way things will change?

Something needs to, things cannot continue down the same road forever.

Surfrat