Qantas To Split Domestic And International Operations

23rd Jul 2014

The country's oldest and largest carrier is now facing the inevitable?formally splitting its operations into domestic and international operations, resulting into two separate entities

The plan was hatched after Qantas had a hard time attracting foreign investors to infuse much-needed capital to avert losses and pay debts.

The airline, through the newly-amended Qantas Sale Act, will now be able to sell up to 49% of its stakes to any interested foreign investors. Previously, a foreign investor is only allowed to own 25% stakes maximum in the national airline.

Qantas is hoping that by putting up a separate entity for its domestic operations, it will be able to find a foreign buyer to invest into the airline. The move will enable Qantas Domestic to match Virgin Australia's own structure where 49% is owned by foreign investors. This way, it would be easier for the airline to compete head to head with Virgin Australia in the domestic front.

The flag carrier has been running its domestic and international operations as two distinct business units, having their own CEOs since the 2012 restructuring.