While the uncertain future of Virgin Australia has stolen most of the spotlight amid the COVID-19 crisis, speculation surrounding its fierce rival is now heating up.
Yes, Qantas is being mooted as an acquisition target for the recently cashed-up Wesfarmers, with the conglomerate recently coming into the possession of a very large sum of money – $1.06 billion to be exact – after offloading 5.2 per cent of its stake in Coles Group.
The move has prompted one investment bank to compile a list of potential acquisition targets should Wesfarmers decided to splash some of its newly acquired cash.
According to The Sydney Morning Herald, the equity strategy team at Macquarie named Qantas among 37 other companies that met the acquisition criteria for Wesfarmers. Other companies on Macquarie’s list include Flight Centre, Ardent Leisure and Crown Resorts.
Wesfarmers CEO Rob Scott told the SMH the company was looking at acquisition opportunities and had already been contacted by some struggling businesses.
Travel Weekly has approached Qantas and Wesfarmers for comment, while a Flight Centre spokesperson said it had not been in contact with the WA-based giant.
This new round of speculation comes as Virgin continues to hold out hope for a federal government bailout, with Australia’s second-largest carrier warning of an unwanted monopoly situation for the local aviation sector if it were to collapse.
Virgin is currently seeking a $1.4 billion lifeline from the government on top of what is already being promised for airlines in Australia.
However, despite the government’s desire for two competitive airlines, Deputy Prime Minister Michael McCormack has said the struggling carrier will not get any special treatment, according to The Australian.
Virgin has also been battling speculation that another player such as Irish budget carrier Ryanair could easily replace the airline if it were to fold. However, CEO Paul Scurrah has rubbished claims that a new entrant could successfully fill the void.
“Given that most airports are private now and they’ve got owners now, they’re not going to be patient for someone else to make up their mind whether they come or not,” he told The Australian Financial Review.
“They are just going to sell those assets to Qantas.
“If as speculated Ryanair were to come in, you can look forward to 20 years of a business and corporate monopoly.”
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