Aviation News

Qantas

QANTAS has highlighted the complexity involved in launching an ultra-premium airline in south-east Asia, indicating that any substantive progress on talks to get it airborne is months away at best.

The airline group, whose operations include Jetstar, has unveiled a cost-cutting drive over the next 18 months, which will reduce spending by $700 million.

Qantas will consolidate maintenance and catering operations, retire older aircraft earlier, and ditch two more international routes, as it strives to lower its cost base to make it more competitive against foreign rivals.

The airline confirmed that 500 jobs would be axed, but indicated the final toll would be significantly higher.

After its pre-tax earnings for the first half of $202 million came in above its own guidance and the expectations of analysts, shares in Qantas surged 6 per cent to $1.655, their biggest one-day rally in six months.

Despite stripping more costs from its operations, Qantas is making slow progress on its much-hyped plans for a premium airline in south-east Asia, as part of a possible joint venture with Malaysia Airlines. It has long been touted as a key to turning around Qantas’ international operations.

Qantas chief executive Alan Joyce, playing down expectations, said the plans for a premium airline were ”hugely complex” and were ”not just on the perceived quality of the [airport] hub”.

”There are a lot of other factors that come into it and I can guarantee that they are all being considered, along with the capital requirement on this, before we make a decision,” he said.

Qantas had previously said it expected to reveal details early this year, but yesterday Mr Joyce declined to give a timeline. He would not comment on the progress of negotiations with Malaysia Airlines and other parties, including AirAsia’s founder Tony Fernandes, but insisted Qantas was not walking away from its plans.

Qantas is adopting a so-called ”capital-light option” similar to its Jetstar joint venture in Japan, which will see the Australian airline inject just $64 million over three years. It means Qantas expects to chip in less than $100 million into an ultra-premium carrier, likely to be based in Kuala Lumpur.

Qantas’ net profit fell 83 per cent to $42 million for the first half, which it blamed largely on a $194 million bill for the industrial action and grounding of its entire fleet last year, and a $444 million rise in fuel prices.

It has not given guidance for this financial year because of ”the high degree of volatility and uncertainty”.

As part of attempts to stem losses from its international operations, Qantas will ditch the Singapore-Mumbai and Auckland-Los Angeles routes from May. It will also reduce capacity on other routes, including Sydney-Bangkok, Sydney-Perth and Melbourne-Perth by replacing large aircraft with smaller planes.

Virgin complains to EC over British airline deal

LONDON – Richard Branson on Friday warned that that the proposed takeover of British carrier bmi by International Airlines Group (IAG) could lead to fewer flights and fare hikes.

The warning came as Branson’s Virgin Atlantic airline made an official complaint to the European Commission about the merger, which would see British Airways holding company AIG take control of bmi, currently a subsidiary of Lufthansa.

Virgin claims that three domestic routes would become BA monopolies and that competition would also be eradicated to some European destinations, allowing it to increase fares and reduce flights.

“This takeover would take British flying back to the dark ages,” Virgin Atlantic president Branson said in a statement.

“For years pioneering airlines have fought to provide consumers with more choice and lower fares. This move will see British Airways unravel all of this progress made.

“BA has a track record of dominating routes, forcing less flying and higher prices,” he added.

IAG responded by saying it was confident regulators would approve the deal.

“Selling it (bmi) to IAG offers the best solution for British consumers and UK plc, securing more jobs than if the airline was broken up and sold-off for its Heathrow slots,” said an IAG statement.

“This deal is the only option for safeguarding services to the UK regions,” it added.

The European Commission has up to 35 working days to announce whether it will approve the deal at Phase 1 or to decide whether it wishes to refer to Phase 2.

If the Commission takes the deal to Phase 2, it will have more than 90 working days to scrutinise the deal before announcing a final decision.

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Air Australia

SYDNEY (AP) — Thousands of travelers from Hawaii to Thailand were stranded Friday after budget airline Air Australia ran out of money and went into voluntary administration, immediately grounding its five-jet fleet.

The Brisbane-based international and domestic airline, formerly known as Strategic Airlines, said all flights had been canceled and the airline would not be accepting new bookings because it could no longer pay its bills. Voluntary administration in Australia is similar to bankruptcy protection in the U.S., and can buy a company time to trade out of its financial problems.

“It currently appears that there are no funds available to meet operational expenses so flights will be suspended immediately,” the airline said in a statement. Passengers who bought tickets with credit cards or had travel insurance may be given a refund, the airline said.

Around 4,000 passengers were overseas with Air Australia round-trip tickets, voluntary administrator Mark Korda said. Some of those affected were stranded in Honolulu and Phuket, Thailand.

“Overnight, the company was unable to refuel its planes in Phuket,” Korda told Australia’s Fairfax Radio. “The directors appointed us at 1:30 this morning and the boys have been working throughout the night to deal with what’s a very difficult situation.”

Stranded in Honolulu, Priya Sinh was forced to postpone her 18th birthday party on Saturday at her home on Australia’s Gold Coast. She used her iPad to log onto Facebook to tell her 70 guests not to come because she wouldn’t be back in time.

“We tried to laugh about it, but it wasn’t funny,” she said while her family called hotels looking for a room. Her mother managed to reserve the last four seats on a Jetstar flight to Sydney leaving Saturday.

Australian airline Qantas and Jetstar, its budget subsidiary, were considering adding services to help stranded passengers get to their destinations, Qantas CEO Alan Joyce said. He said the airline will sell stranded passengers tickets for the same price they paid for their Air Australia tickets, giving them a chance to recover the full price from their travel agencies or credit card companies.

Air Australia’s fleet consists of five Airbus A330-200 and A320-200 aircraft, and regularly flies to Bali, Phuket, Honolulu and cities within Australia.

Korda said in a statement that Air Australia’s administrators were calling for immediate expressions of interest in the sale of the business.

source: http://www.chron.com

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Qantas A380