Qantas announced (31-Oct-2013) a combined equity injection of AUD120 million (USD113.6 million) in in the form of non-voting shares, which will be equally shared by the two major shareholders, Qantas and Japan Airlines. The investment will increase Qantas and Japan Airlines’ economic interest from 41.7% each to 45.7% each. Mitsubishi Corporation and Century Tokyo Leasing will have 4.3% each of the LCC, down from 8.3% each. The equity injection will support Jetstar Japan’s future fleet and infrastructure growth, enabling the carrier to capitalise on the significant potential of the low cost carrier market in the world’s third largest economy. [more - original PR]
Qantas increases share in Jetstar Japan by injecting USD114m in non-voting shares
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DOT rejects the notion that such larger market share can possibly be in the interest of consumers. Yet it appears to overlook the benefit American might bring in exchange for incremental market share gains. Nor is it clear if this combination is more anti-competitive than some JVs where two airlines, each with a small- or medium-sized position, combine and become multiples larger. Qantas' 53% market share was earned through quality and smart loyalty programme development while competitors lagged.
Qantas will continue growth in North America, its most successful international market, but American Airlines' growth is uncertain and it may re-evaluate a supposedly planned Los Angeles-Melbourne 787 service.
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