Each week the Blue Swan Daily brings you a snap shot of the key share and oil prices related to all things travel and aviation.
Monthly Share Price Snapshot:
Key news stories of the week
Qantas released a statement responding to a segment aired by the ABC on company tax, stating the broadcaster’s analysis is “oversimplified” on an issue “that has already received wide coverage.”
- Qantas stated it has been “very well publicised” that it has not paid company tax because of “equally well publicised financial losses” and once its profits exceed those losses, it will resume payment of company tax;
- The airline also stated that the notion that it should not argue in favour of company tax cuts because of its financial losses and resulting tax status is “nonsense” and “ignores the benefit to the broader economy that lower tax rates will bring”;
- Qantas reported it has “around” AUD950 million (USD755 million) of tax losses left to work through and expects to return to paying company tax soon, crediting this to the turnaround of the airline;
- The airline also noted its recent profits generated “large amounts of taxable income for the Australian Government in the form of almost AUD200 million (USD159 million) in unfranked dividends” paid to shareholders since 2016;
- Qantas stated there is a tax component to most transactions it undertakes, including GST, fringe benefit tax, payroll tax and passenger movement charges. Qantas Group reported it paid and collected a combined total of AUD3.2 billion in taxes for FY2016/2017, an increase of 14% year-on-year.
Australian Competition and Consumer Commission (ACCC) proposed granting re-authorisation to the alliance between Qantas and Emirates for a further five years. The ACCC first authorised the alliance in 2013 for an initial five year period. ACCC Commissioner Roger Featherston said the body “considers that the alliance is likely to continue to result in a range of public benefits” and that the combined networks of Qantas and Emirates “provides customers with access to more flights and destinations under a single airline code and improves connectivity” and also has benefits for loyalty programme members. Mr Featherstone said the ACCC is concerned that the alliance is “likely to significantly impact competition” on a single route – Sydney to Christchurch – as Qantas and Emirates are the two major operators on this route and their only competition is from the Virgin Australia and Air New Zealand alliance”. To address this, the ACCC proposes the Qantas/Emirates alliance regularly reports on seats and passengers flown, fares and route profitability. The condition would also allow the ACCC to set a minimum level of capacity on the route. When the alliance was initially approved the ACCC imposed similar conditions on four routes between Australia and New Zealand. However, since starting direct services between Auckland and Dubai in Mar-2016, Emirates has withdrawn from the Sydney to Auckland route, and will withdraw from the Melbourne and Brisbane to Auckland routes in Mar-2018. The ACCC considers these routes no longer require the capacity conditions.
Alliance Aviation Services issued a notice of change of interest of substantial holder in relation to IOOF Holdings Limited, whose voting power increased from 10.356% (12,780,778 votes) to 11.781% (14,540,693 votes).
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