where did qantas go wrong? , page-5

There was an article in yesterday's paper explaining the union culture of Qantas, which explains a lot in terms of service and the demeanour of staff.

But the buck always stops at the top, so if there's a problem it is up to the board to sort it out. I lay the blame squarely at the top. Alan Joyce inherited a lot of problems, and has proved he is not the man to deal with them.

There has been a lot of volume buying of Qantas shares recently, sufficient to push the price up by 15% from its low, and holding. What does this mean?

There is no prospect of dividends, so there can only be two reasons;

1. Traders think the problems will be solved and all will be sweetness and light (unlikely)

2. Traders think that there will be some sort of dramatic buy-out, takeover, or scheme of arrangement that will be positive.

A few weeks ago there was a lot of talk about how weak Qantas was, but the share price barely moved. Then an announcement of the expected loss, and wham, down went the price. Doh! That action tells me that the current share price action is a triumph of hope over reality.

Anything less than a full shakeout will only prolong the problems. Nobody saw Ansett coming at the time, until it happened, and so it will be with Qantas. I know that they would have to be making big losses on some of their regional routes as they ramp up capacity to destroy their competition. That negative tactic will be back to bite them big time.

Somebody should draw their attention to the fact that if 65% market share is not doing it, then its time to ask a few questions of themselves. But that won't happen.

Check out the CVs of a few of the board members. Fine upstanding people who have all the enthusiasm of a vegetable for change.