The Qantas poker game is deadly serious, as you’d expect when there are hundreds of millions of dollars of fees at stake, but it’s still good for a laugh or at least the odd wry grimace.

The laugh comes from the Hun story that Airline Partners Australia want Qantas to explain the effect rising fuel costs and increased competition will have on future profits.

“APA is pressing Qantas management for an urgent response in order to keep abreast of new issues which are likely to adversely affect the airline’s accounts,” reports Geoff Easdown.

That’s the Qantas management that is compromised by being part of the takeover bid. And I’ll bet APA is not pushing Qantas for any information on issues that might beneficially affect the airline’s accounts, or perhaps requesting that the “independent expert” has another go at the numbers, taking into account the sharp rise in other airlines’ share prices, the growing benefit of having places in the very long Boeing production queue and the purple patch the airline appears to be flying into because of the international shortage of aircraft.

The SMH’s Xchange column recounts one of the stories Qantas chairman Margaret Jackson hasn’t been telling:

In the four months since the talk of APA’s offer first surfaced, the bid has looked less attractive by the day. Aside from Qantas’s three profit upgrades, another indicator could be the share prices of other airlines.

APA argues its $5.45 offer is a 37 per cent premium to the average broker price target on Qantas before the offer was launched. But Air New Zealand shares have risen 70 per cent since early November, while Virgin Blue is up 46 per cent. This financial year the Bloomberg World Airline Index has risen 45 per cent.

So much for the takeover offering a generous premium.

The games being played by hedge funds on losing bets and the desperate APA partners are only likely to get grubbier. Michael West chronicles the sort of flak Balanced Equity’s Andrew Sisson expected to cop.

But for genuine hilarity, it’s hard to beat the effort of a minor American hedge fund that’s telling intransigent Qantas shareholders they’re being unrealistic. Yes, the hedge fund of course has a vested interest in that it’s bet on the takeover succeeding.

And if anyone wanted another indication of how very valuable production slots have become in a world short of capacity, last night’s US February durable goods orders stats showed an 88% jump in aircraft orders after a 60% jump last month.

Take a number and go to the back of the long queue.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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