By Andy Sambidge
Australian airline in alliance with Emirates also says it will repay $650m debt
Australian airline group Qantas, which recently struck an alliance with Dubai's Emirates Airline to help boost its ailing long-haul unit, has announced it will invest up to $100m in a share buy-back.
The Qantas Group announced it will also repay $650m in debt ahead of schedule.
The share buy-back represents up to four percent of Qantas shares and is expected to begin in December.
Qantas chairman Leigh Clifford said the Group was well positioned in terms of its portfolio of businesses, its balance sheet and its strategy to deliver long term shareholder value.
“The board believes the current Qantas share price does not reflect fair value of the Group, particularly considering the underlying strength of its domestic, loyalty and Jetstar businesses and the proposed partnership with Emirates,” said Clifford.
“Our continued progress towards the turnaround strategy for Qantas International, plus cash inflows from recent transactions, gives the board confidence to approve these capital management measures.
“The share buy-back and accelerated debt reduction reflect the board’s goal of returning value to shareholders and maintaining a strong balance sheet, as well as retaining the flexibility to pursue current growth initiatives,” he added.
The turnaround plan will see more than 3,000 job losses at the Australian airline, some of its poorest-performing routes axed, and the launch of new Asian carriers in partnership with Qantas' low-cost offshoot Jetstar.
Qantas said following the recent refinancing of its $400m undrawn loan facility, together with its strong cash balance, the Group will "retain a strong liquidity position on an ongoing basis".For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.