Cobham buy may be too optimistic
10 / 11 / 2009
COBHAM Aviation Services Australia has bought three BAe 146QT freighters from BAE Systems to fulfil its renewed A$100 million (US$92.8 million) contract with Australian air Express (AaE). However, judging by AaE’s plunging profits, the decision may have been prematureSpeaking about the purchase, Steve Doughty, senior vice-president sales and marketing for BAe’s asset management business, said: “Cobham…has been a valued and long-standing customer of ours for around 20 years and has operated numerous BAe 146s during that time. The BAe 146/Avro RJ family has a lot to offer the Australian market and will remain in service there for many years to come and we look forward to a continuing and developing relationship with Cobham.”Cobham has been providing aircrew and maintenance support for the three freighters for 17 years. The freighters carry 20,000 tonnes of freight domestically every year.However, AaE’s results show that the Qantas and Australia Post joint venture has not broken even this year. First half of the year profits slumped to A$119,000 compared to A$17.6 million the year before and A$30.2 million for the entire previous financial year.AaE’s chief executive, Wayne Dunne admitted this yearhas had the “most challenging” trading conditions since the joint venture was formed in 1992. “Quite simply, it’s due to the effects of the global financial crisis and the economic downturn in Australia. It’s just a volume decline.”He added that the decline had stabilised and there had been some improvement leading up to Christmas but that “the challenge is still there, believe me”.He denied the company had lost custom to its competitor and that Qantas charged more than the industry standard.Both Qantas and Australia Post have seen massive drops in profits this year.