Tuesday September 21, 10:59 AM
Air New Zealand, QANTAS Face Stiff Competition From Asian Rivals

SYDNEY, Sept 21 Asia Pulse - Air New Zealand Ltd and Qantas Airways Ltd face the prospect of intensifying competition on its trans-Tasman route from other airlines now that a proposed alliance between the pair has been blocked, according to analysts.

Air NZ and Qantas were disappointed yesterday when the New Zealand High Court blocked their proposed A$500 million (US$349 million) alliance, under which Qantas would have taken a 22.5 per cent stake in its rival.

Qantas and Air New Zealand have said they would pursue other avenues of cooperation that would not draw the ire of competition regulators.

"Despite Qantas and Air NZ signalling an ongoing intention to examine further opportunities, we expect competition will continue to intensify on the tran-Tasman, as Asian carriers target further market share gains," Credit Suisse First Boston analyst Greg Ward said.

Air NZ's share of trans-Tasman traffic has fallen in the past two years to 32 per cent, from 43 per cent, following the entry of Emirates and Virgin's Pacific Blue, which launched in January.

Qantas has maintained its market share at 39 per cent.

Qantas and Air NZ could form agreements to cooperate on maintenance and back office functions on the route, which is loss-making for both carriers.

"A close relationship with Qantas is a major factor in Air NZ's future as it minimizes the threat from its single most significant competitor," Goldman Sachs JBWere analyst Peter Sigley said.

But it was also highly likely that Qantas would turn its energies to Asia and seek an alliance with an Asian carrier, Mr Ward said.

While analysts made no changes to their valuations on either airline, they noted that a consequence of yesterday's decision was the likely conversion of redeemable preference shares held by Qantas into 4.99 per cent of Air NZ ordinary stock.

They also expect Air NZ to announce that it will proceed with a $NZ200m rights issue, $NZ150 million underwritten by the New Zealand Government, following its annual general meeting on October 27.

Goldman Sachs JBWere has assigned Air NZ a short term outperform rating with a target share price of $NZ1.87.

Credit Suisse First Boston rates Ar NZ at outperform, and Qantas at marketweight with 12-month share price targets of $NZ2.40 and $3.41, respectively.

Air NZ and Qantas are expected to await the outcome of their appeal to the Australian Competition Tribunal before moving forward.

The pair are appealing the rejection of any alliance by the Australian Competition and Consumer Commission last year.

ASIA PULSE

Here are some photos from Down Under posted at HKADB :

http://www.enjoyalbum.net/ealbums/userpics/16785/DSC03245%7E0.jpg

http://www.enjoyalbum.net/ealbums/userpics/16785/DSC03246.jpg

http://www.enjoyalbum.net/ealbums/userpics/16785/DSC03254.jpg

http://www.enjoyalbum.net/ealbums/userpics/16785/DSC03258.jpg

http://www.enjoyalbum.net/ealbums/userpics/16785/DSC03439.jpg

http://www.enjoyalbum.net/ealbums/userpics/16785/DSC03442.jpg

http://www.enjoyalbum.net/ealbums/userpics/16785/DSC03520.jpg

http://www.enjoyalbum.net/ealbums/userpics/16785/DSC03524.jpg

http://www.enjoyalbum.net/ealbums/userpics/16785/DSC03527.jpg

http://www.enjoyalbum.net/ealbums/userpics/16785/DSC03541.jpg

http://www.enjoyalbum.net/ealbums/userpics/16785/DSC03536.jpg

http://www.enjoyalbum.net/ealbums/userpics/16785/DSC03537.jpg

http://www.enjoyalbum.net/ealbums/userpics/16785/DSC03538.jpg

http://www.enjoyalbum.net/ealbums/userpics/16785/DSC03543.jpg

http://www.enjoyalbum.net/ealbums/userpics/16785/DSC03545.jpg

http://www.enjoyalbum.net/ealbums/userpics/16785/DSC03548.jpg

Wednesday September 29, 5:28 PM
Australians Visiting US to Undergo Fingerprint Scanning

CANBERRA, Sept 29 Asia Pulse - Every Australian who enters the United States from tomorrow will have their fingerprints scanned, a digital photograph taken and their details stored and checked on American databases.

Australians will have no choice but to surrender their fingerprints and submit to a photo if they want to enter the US.

The information will be available to American law enforcement agencies and government authorities.

Deputy director of the new visa waiver program, Robert Mocny, said it was designed to catch terrorists, drug traffickers and visa overstayers while at the same time protecting people in the US.

He said from tomorrow every Australian who arrived in the US would fill out a visa waiver form as normal but would also be asked to submit their fingerprints with their passport when they passed through immigration checks.

"He (the immigration officer) is going to ask you to first place your left and then your right index finger onto this device," Mr Mocny said via videophone from Washington, pointing to a small box which scans fingerprints.

"During that conversation your picture is being taken too.

"He just taps a key on a keyboard and a digital photograph is taken.

"Your fingerprint will be taken and sent to our servers in Washington DC and within five seconds that officer should have a response back to him or her indicating, first of all it's you, it's not a problem, there's no hit and you can come into the country."

Mr Mocny said the process would catch out suspected terrorists and criminals on the US watchlist.

"We have about 1.1 million watchlist individuals in our database, those are known suspected terrorists, criminals ... and other undesirables and they will masquerade as someone else because they know that there's a watchlist," he said.

Mr Mocny admitted there was a slim chance a criminal could steal an Australian's identity if they were the first to have their fingerprints matched with a passport, but said there were procedures to rectify such a situation.

"An area of concern is that if someone was to steal your passport today, that they would become you," he said.

"But the chance of that happening is rather difficult."

Mr Mocny said visitors' names were matched with airline details and checked against lost and stolen passports.

Australian passports issued from November last year already carry biometric information, including a digital photograph, which would be used for a facial recognition check.

Mr Mocny said the new visa scheme was unlikely to result in delays in entering the US and doubted it would affect tourism, even though some people were likely to have privacy concerns.

"What we hope it does is assure people that it's a safe, more secure way to come to the US," he said.

Visitors would have to check out of the US at an exit station under the visa program.

ASIA PULSE

Bali travel leaps forward
Perth Airport is pleased to announce a fifty percent growth in passengers travelling to Bali and welcomes increased services by Garuda and Air Paradise and start up of Australian Airlines on the Perth Bali route.

The additional seat capacity on the Perth Bali route will result in travellers having more opportunities to travel to Western Australias favourite overseas destination, the holiday island of Bali.

Recently both Garuda Indonesia and Air Paradise increased services on the route. Garuda Indonesia is now offering 10 flights per week beginning the 2nd October 2004 and Air Paradise has 5 flights per week plus for the month of October it is increasing its services to 8 flights per week due to demand. Qantas has also announced increased capacity to Bali with the introduction of its B767 all economy class services with Australian Airlines.

This is great news for holiday makers as increased services will invariably mean increased competition on the Perth Bali route and the continued availability of great value holiday packages Perth Airport Chief Executive Officer Graham Muir said.

There has been extraordinary growth in the number of passengers travelling to Bali in the first two months of financial year 2004/2005 with over 50% more people choosing the popular holiday destination compared to the same period last year Mr Muir said.

The rise in Bali traffic is one of the main reasons for the boost in international passenger traffic figures through Perth Airport. The first two months of Financial Year 2004/2005 has shown record international passenger numbers with growth rates running at 15% compared to the same period last year. The growth in Bali traffic coincides with the recent announcement by Singapore based discount airline Valuair of its introduction of daily services on the Perth Singapore route from December of this year.

The airport is also experiencing record domestic passenger numbers with the first two months of 2004/5 showing an increase of 17% on the same period last year.

Airlines provide services to destinations that people want to visit and Western Australia is proving to be a popular destination for overseas and domestic travellers."
http://www1.perthairport.com/content.aspx?ContentID=284

Valuair is coming
Perth Airport welcomes the announcement by Valuair of proposed operations into Perth.

Valuair is the first discount international air carrier that will be operating on the Perth Singapore route and daily services are scheduled to commence in December.

The airline will operate Airbus A320 aircraft.

The commencement of services by Valuair will provide further opportunities for travel between Perth and Singapore. It will also enable links to Bangkok and Hong Kong for the discount air travel market. This will enable people to travel to these regions where previously they may not have had the means, Perth Airports General Manager, Richard Gates said.

There has been significant preliminary work by Perth Airport and the State Government with Valuair to deliver this service to the Western Australian public, Mr Gates said.

I believe it will have a positive compounding effect for all parties concerned and we look forward to working closely with Valuair to help boost passenger traffic, he said.

The introduction of this service will continue the substantial growth of passengers into Perth. In August, both international and domestic passenger numbers were the highest ever recorded for the month
http://www1.perthairport.com/content.aspx?contentid=283

Jetstar propels fare war
WA travellers are big winners in the most savage airfare war to hit our skies as Jetstar starts planning its entry into the market.

Fly Perth to Singapore for just $350 return, or Perth to Broome for just $149 one way as hundreds of fares are slashed to bargain basement prices.

Adjusted for inflation, they are the lowest fares ever offered to West Australians.

A Jetstar spokesman yesterday confirmed the airline's intention to start services to WA from the middle of next year with new 177-seat Airbus A320s.

While coy on start dates for intrastate WA routes, insiders at the airline said that plans for Perth to Broome services catered for later in 2005 – possibly August.

That would make the Perth-Broome route one of the most hotly contested in Australia, with Virgin Blue, Jetstar, Qantas and Skywest competing.

Jetstar is expected to replace its parent Qantas on the route, just as Australian Airlines, Qantas's low-fare international subsidiary, will take over the Perth-Bali route.

Perth-based Skywest Airlines has not matched Virgin Blue's $149 one-way fare to Broome but does have two-night packages, including return airfare, from $517, according to its website.

Virgin Blue has similar packages. It started its 180-seat Boeing 737-800 Broome flights in September with three a week – and will puton an additional Monday service from November 29.

Insiders say they expect the airline to have daily flights by May to coincide with the peak holiday season.

The airline is also considering other WA destinations as its fleet grows.

Tourist analysts suggest that fares on the Perth-Broome route could drop even further than Virgin's current special of $149 one-way when Jetstar enters the market.

On Friday Jetstar launched a huge airfare promotion on the east coast with fares from just $49. Virgin Blue matched the fares late on Friday.

Both Jetstar and Virgin Blue claim to have the lowest seat costs in the industry – half those of Ansett.

Singapore Airlines announced yesterday that it would offer fares from just $350 return plus taxes to Singapore.

Or fly to Bangkok and back for $480 before squeezing in a return trip to Hong Kong for $560 plus taxes.
http://www.sundaytimes.news.com.au/common/story_page/0,7034,10951442%255E2761,00.html

With regards to that Perth-Singapore sector which is said to be significant, I didnt realise just how major it is when compared to other internatonal flight sectors out of Australia until I went to the Australian DOTARS and found these info! :eek:
TABLE I: INTERNATIONAL PASSENGERS BY UPLIFT/DISCHARGE CITY PAIRS
YEARS ENDED DECEMBER 2001, 2002 AND 2003
% Change
Foreign Australian Year ended Year ended Year ended % of 2003 over
Port Port December 2001 December 2002 December 2003 Total 2002
Auckland Sydney 1,012,766 973,117 1,137,536 6.9 16.9
Singapore Sydney 942,288 947,649 917,367 5.6 -3.2
Singapore Perth 659,996 683,785 665,063 4.0 -2.7
Singapore Melbourne 644,591 661,916 625,305 3.8 -5.5
Los Angeles Sydney 720,778 667,350 612,352 3.7 -8.2
Singapore Brisbane 409,520 450,870 552,094 3.4 22.5
Auckland Melbourne 522,403 503,070 536,031 3.3 6.6
Auckland Brisbane 489,663 443,267 530,866 3.2 19.8
Hong Kong Sydney 607,608 587,989 504,054 3.1 -14.3
Christchurch Sydney 405,669 391,024 444,022 2.7 13.6
Top 10 City Pairs 6,415,282 6,310,037 6,524,690 39.7 3.4
Other City Pairs 10,384,433 10,372,336 9,920,818 60.3 -4.4
ALL CITY PAIRS 16,799,715 16,682,373 16,445,508 100.0 -1.4

Virgin Blue Plans To Launch New Airline For Ops To U.S.
Publication title: Aviation Daily. Washington: Sep 27, 2004. Vol. 357, Iss. 61; pg. 1

Virgin Blue plans to launch an Australia-based, long-haul international airline to operate the South Pacific route between Australia and the U.S.

A Virgin Blue executive in Brisbane would only say that the low-fare carrier is contemplating whether to go ahead with its plan, but The DAILY has learned that the carrier has filed an application with the Australian authorities.

Should Virgin Blue's plan materialize, the new airline would launch before Christmas to capitalize on holiday-rush seat demand, putting it in direct competition with Qantas. The Australia-U.S. route via the Pacific is considered Qantas' most profitable; it's also a key sector for United Airlines. Australia's government has blocked Cathay Pacific and Singapore Airlines from securing fifth-freedom rights on the route.

Virgin Blue, which recently launched Pacific Blue to serve the Australia-New Zealand route, also has ambitious plans to introduce flights to Southeast Asia. Executives also are considering routes to London and South Africa. -WD

Australian Federal Quarantine Office Building
http://img.photobucket.com/albums/v469/perthwaus/c206726d.jpg
Perth International Airport Terminal Expansion Land
http://img.photobucket.com/albums/v469/perthwaus/fe8d1fdc.jpg
Perth International Airport Terminal Expansion - Departures
http://img.photobucket.com/albums/v469/perthwaus/087f0df6.jpg
http://img.photobucket.com/albums/v469/perthwaus/9aff8704.jpg
http://img.photobucket.com/albums/v469/perthwaus/dd6b6e52.jpg
http://img.photobucket.com/albums/v469/perthwaus/c9342454.jpg
New Taxiway & Tarmac Expansion - International
http://img.photobucket.com/albums/v469/perthwaus/a8d57022.jpg
http://img.photobucket.com/albums/v469/perthwaus/b0539d01.jpg
Viewing Deck Perth International Airport Terminal - Level 3
http://img.photobucket.com/albums/v469/perthwaus/f6244a6f.jpg
Random
http://img.photobucket.com/albums/v469/perthwaus/9748e32c.jpg
http://img.photobucket.com/albums/v469/perthwaus/8d5d1c4f.jpg
http://img.photobucket.com/albums/v469/perthwaus/f39d468f.jpg
http://img.photobucket.com/albums/v469/perthwaus/a5b5ff87.jpg

Tuesday October 12, 8:27 AM
Australian authorities give approval to Qantas-Air New Zealand merger which New Zealand authorities rejected

Australian authorities on Tuesday approved a proposed alliance between airlines Qantas and Air New Zealand _ but too late for the deal to go ahead because a New Zealand court last month rejected the tie-up.

The alliance was aimed at allowing the two carriers to cooperate on routes between Australia and New Zealand, but was effectively scuttled by last month's High Court decision in New Zealand. The deal needed approval from authorities in both countries.

The Australian Competition Tribunal on Tuesday upheld an appeal by the airlines against an earlier ruling by the Australian Competition and Consumer Commission that the tie-up would be bad for competition.

Under the proposed alliance, Qantas would buy up to 22.5 percent of Air New Zealand for 550 million New Zealand dollars (US$363 million; euro 298 million) to enable the two operators to cooperate on all their routes between Australia and New Zealand.

Qantas and Air New Zealand said last month they would not appeal the New Zealand High Court's decision, and that they would abandon their plans for the tie-up in its current form.

Before Tuesday's decision, the airlines had said that winning approval in Australia could allow them to form an alliance in a modified form.

The tribunal supported all major aspects of the proposal, including plans to code-share, coordinate sales, marketing, pricing and scheduling, and also approved the plan for Qantas to purchase the 22.5 percent stake in Air New Zealand.

The tribunal, led by president Alan Goldberg, said that the alliance would "result, or will be likely to result in a benefit to the public and that benefit will outweigh the detriment to the public constituted by the lessening of competition."

Posted: 12 October 2004 1520 hrs

Qantas-Air NZ plans to link watered down despite Australian appeal win

SYDNEY: Australian flag carrier Qantas and Air New Zealand will thrash out a strategic alliance that falls short of their original plans despite Australian regulators' dropping objections to their tie-up, according to analysts.

The Australian Competition Tribunal's (ACT) decision to uphold an appeal against the deal's rejection was described as little more than a moral victory for the airlines because New Zealand authorities remain opposed to the plan.

"There will be an alliance but it will be a limited commercial arrangement and not what Qantas and Air New Zealand were hoping for," Ian Thomas, senior consultant with the Centre for Asia-Pacific Aviation, told AFP.

"What this does give them is the moral heart to go to the Australian and New Zealand governments and say 'listen, this was blocked but we were eventually proved right, what we really need is a single aviation market for Australia and New Zealand'."

The alliance, first publicly proposed almost two years ago, would have involved Qantas taking a 22.5 percent stake in Air New Zealand for 550 million NZ dollars (351 million US), allowing the airlines to coordinate pricing and capacity on trans-Tasman routes and in the New Zealand domestic market.

Qantas chief executive Geoff Dixon said the alliance could not proceed in its original form because the New Zealand High Court had rejected the proposal last month.

Dixon said Qantas would not return to the courts to appeal the New Zealand decision, instead concentrating on talks with the New Zealand carrier that will look at how they can tie-up without breaching competition laws.

"Another 12 months of uncertainty, with the associated costs, is not in anyone's interests," he said in a statement that labelled the lengthy legal battles over the plan as "a lost opportunity for much-needed aviation reform."

Air New Zealand chief executive Ralph Norris said the decision vindicated the airlines' predictions about the need for reform in the Australia-New Zealand market.

"History now shows that many of these predictions have become reality with ever-intensifying levels of competition in the Australasian aviation market and fares at all-time lows," he said.

The ACT did not publish the reasons behind its decision but both Dixon and Norris said it appeared the tribunal had accepted the airlines argument that the alliance would not be anti-competitive or lead to higher airfares.

Qantas has previously warned the aviation industry is moving toward consolidation, citing the merger of Air France and KLM to form the world's largest airline.

Dixon said the conflicting outcomes of the Australian and New Zealand regulatory processes showed the need for greater coordination between the countries on competition issues.

"We believe the disappointing recent decision by the New Zealand high court to reject (our) appeal ignored both the reality of market-distorting government ownership and intervention in the global aviation industry, and the major structural changes that are occurring around the world," he said.

Qantas shares closed up four cents at 3.44 Australian dollars and Air New Zealand was up five cents or 3.2 percent to 1.63 NZ dollars. - AFP

Increased air services to Perth a boost for international travel
International travellers will be able to take advantage of increases in airline seat capacity into Perth with the release of the new schedule commencing on the 31st October 2004.

The additional seats represent 18% growth compared to last season and 17% growth compared to the same season last year and will allow more overseas travellers to fly into Perth this summer.

The growth in seat capacity has resulted from:

-The introduction of Australian Airlines twice weekly services to Bali
-Introduction of services to Jakarta and increased services to Bali by Garuda Airlines
-Daily services to New Zealand by Air New Zealand
-Increased services to Jakarta by Qantas
-The new Valuair services to Singapore with daily flights; and
-Increased services to Singapore by Singapore Airlines

Larger aircraft being utilised on some routes also aids the growth in seat capacity in the new schedule.

It is an exciting time for Western Australia as demand from overseas travellers results in increased seat capacity Perth Airport Acting CEO Richard Gates said.

It is especially good news for the tourism industry which has suffered from the impacts of SARS and the war in Iraq Mr Gates said.

It is also excellent news for Western Australians providing more opportunity to travel he said.

Passenger numbers at Perth Airport are currently at record levels. International passenger numbers in the July September quarter show an increase of 9.5% on the same period last year. Domestic passenger numbers for the quarter show a staggering increase of 15.5% compared with the same period last year.
http://www1.perthairport.com/content.aspx?contentid=285

Wednesday October 13, 10:00 AM
Air New Zealand CEO says carrier might relaunch a proposed alliance with Qantas in 2-3 years

Air New Zealand's chief executive said Wednesday the airline might try again to form an alliance with Qantas in two to three years, after receiving belated approval for a now-shelved tie-up from Australian authorities.

The two carriers had wanted to cooperate on routes between Australia and New Zealand, but their proposed alliance was effectively scuttled last month when New Zealand's High Court rejected it. The deal needed approval from authorities in both countries.

However, the Australian Competition Tribunal on Tuesday upheld an appeal by the airlines against an earlier ruling by the Australian Competition and Consumer Commission that the tie-up would be bad for competition.

Air New Zealand CEO Ralph Norris said the Australian decision has given the airlines hope that a fresh bid would succeed.

"I think this decision on the Australian side gives us the opportunity to look at a reapplication in two or three years to the New Zealand Commerce Commission," Norris said.

Under the proposed alliance, Australian carrier Qantas was to buy up to 22.5 percent of Air New Zealand for 550 million New Zealand dollars (US$363 million; euro 298 million).

Norris said the two national carriers remain "strong competitors so there has been no change to the competitive situation" as a result of the alliance proposal.

He added that Air New Zealand was now financially much more secure since the alliance plan was proposed 2 1/2 years ago.

In 2001, the New Zealand government rescued the flag carrier from bankruptcy by injecting it with NZ$885 million (US$599 million; euro 487 million).

Air New Zealand shares were up a cent Wednesday at NZ$1.64.

Posted: 15 October 2004 1035 hrs

Australian carrier Qantas raises fuel surcharge as oil price hits record

SYDNEY : Australian flag carrier Qantas Airways on Friday increased a fuel surcharge on ticket prices to offset rising fuel costs.

As the price of crude hit record highs overnight, Qantas chief financial officer Peter Gregg said the airline was lifting its international fuel surcharge by A$7, or US$5.11, to A$29 , while the domestic levy will rise by two dollars to A$12.

"With jet fuel now at more than 60 US dollars a barrel and showing no sign of falling, an increase in the airline's fuel surcharge was unavoidable," Gregg said in a statement.

"The hedging we have in place and the higher fuel surcharge will not cover all of the increased cost of jet fuel."

Qantas introduced the surcharge last May and increased it in August.

The airline flagged the latest increase earlier this week. - AFP

Emirates to fly double daily
Perth Airport welcomes the announcement by Emirates that the airline will double its services to Perth from October 2005.

"This announcement highlights Emirates confidence in the growth of travel to and from Western Australia" Perth Airport Acting CEO Richard Gates said.

"Perth Airport and the State Government have worked closely with Emirates Airline to deliver this service to the state. It is a fantastic boost for travel especially to and from European countries using Emirates extensive network connections" Mr Gates said.

Perth Airport and Emirates are finalising plans to build a quality business lounge within the International Terminal to ensure passengers receive a first class experience from the start of their journey.

Westralia Airports Corporation is also upgrading the International Terminal to provide an additional 2500m2 of floor space including state of the art equipment in the form of new check-in counters, an automatic baggage handling system and high technology baggage security system Mr Gates said.

Emirates began flying 4 weekly services to Perth in August 2002, increasing to daily services in May 2003 Launched in 1985, Emirates is one of the worlds leading airlines, currently servicing more than 70 destinations worldwide.
http://www1.perthairport.com/content.aspx?ContentID=289

Air NZ boosts WA flights
Air New Zealand will increase services to Western Australia, operating daily direct services between Auckland and Perth during the Australian summer.

The airline’s ceo Ralph Norris said New Zealand could grow into one of WA’s biggest tourist markets over the next few years with added air capacity, lower airfares and joint promotion.

Norris said WA’s profile in New Zealand as a tourist destination had grown substantially in recent years.

“Inbound tourism to WA from New Zealand has grown by nine per cent in the last year alone and is now over the 40,000 annual visitors mark,” he said.

“New Zealand tourists are also one of the most frequent repeat visitor groups to WA and are also trending towards longer stays in WA with visitor nights up 22.6 per cent in the last financial year.”

Outbound tourism from WA into New Zealand was also a major factor in the airline’s decision to expand its schedule to a daily service, with WA visitors to New Zealand now numbering more than 49,000, an increase of 12.5 per cent in the year ending July 2004.

“We’d definitely like to see Air New Zealand continuing to expand in this market over the next few years and believe we’ve put very competitive airfares in place to support future growth,” he said.

Air New Zealand will begin daily direct flights from November 1 until March 28, providing an additional 25,000 seats on the route.

The airline currently flies four direct services a week between Perth and Auckland.

Over the past 12 months, Air New Zealand has dropped the price of airfares and has simplified ticket conditions in a bid to increase traffic between Australia and New Zealand.

“We’ve lowered our fares out of Perth for example by 23 per cent, with a year round return airfare to New Zealand from Perth now starting at $835 return including taxes which has helped grow the market,” Norris said.
http://www.travelbiz.com.au/articles/4f/0c02834f.asp

Premier welcomes extra Emirates flights
An estimated $30 million a year will be injected into the WA economy as a result of luxury airline Emirates doubling its flights into Perth, West Australian premier Geoff Gallop says.

The airline announced on Friday it would increase its services to Perth from seven to 14 a week from October 2005.

WA would benefit from a boost to its tourism industry and greater access to United Kingdom and European destinations through the Dubai-based Emirates network, Dr Gallop said.

"These flights will hopefully lead to lower airfares and more competitive air freight price, and will offer new opportunities for the tourism and perishables export industry to further develop existing markets and scope new ones," Dr Gallop said.

An additional 98 tonnes of air freight capacity would be available each week, Dr Gallop said, giving more opportunities for exporters to send WA seafood, fruit and vegetables, dairy products and wine overseas.

Emirates' flight increase to Perth reflected the airline's confidence in the WA market, acting Perth Airport chief executive Richard Gates said.

Perth's international terminal would be upgraded and a new business lounge built to accommodate the anticipated greater numbers of travellers, Mr Gates said.
http://news.ninemsn.com.au/article.aspx?id=20286



Air NZ to expand Perth services
Air New Zealand says it is expanding its services between Perth and Auckland from four weekly services to daily flights over the peak November-to-March season.

Air NZ managing director Ralph Norris said in a statement the airline was confident the growing number of Western Australians visiting New Zealand was part of a long-term trend.

He said Western Australia now supplied over 49,000 annual visitors to New Zealand, up 12.5 per cent in the year to July.

"Air New Zealand is the only airline to fly direct non-stop services between the two cities and the introduction of our daily non-stop services will offer an additional 25,000 seats to New Zealand from Western Australia per year," Norris said.

He said New Zealand visitors to Western Australia were also up, growing nine per cent over the past year to 40,000 visitors.

Air New Zealand's decision to expand its services follows Tuesday's decision by the Australian Competition Tribunal to approve a proposed tie-up between Air NZ and Qantas.

The plan, which involved Qantas taking a 22 per cent stake and the airlines cooperating on flights to, from and within Air New Zealand, had been rejected in New Zealand by the Commerce Commission and on appeal in the High Court.

The alliance cannot proceed because it needed approval from both sides of the Tasman, but following the decision by the ACT the airlines indicated they would look at ways they could co-operate in Australia that would not contravene New Zealand regulations.

Norris said the airlines might pursue the alliance in two to three years time.
http://www.theage.com.au/articles/2004/10/14/1097607360062.html?oneclick=true

Friday October 15, 10:02 AM
Increased airline capacity brings in $1bn

Increased international airline capacity helped bring almost $1 billion into the Australian economy last financial year, it is claimed.

Airline liberalisation would also deliver a further significant economic boost for Australia's tourism industry in the coming Northern Winter schedule, according to TTF Australia.

In the month of August there were 43,600 extra passengers to Australia compared to the same period last year and similar rises through 2003/04 had brought an extra $983 million to the Australian economy.

TTF Managing Director Christopher Brown said various bilateral air rights negotiations over the past year had resulted in the doubling of capacity to China and Hong Kong, as well as substantial increases in capacity to Malaysia, Korea, Vietnam, Singapore and India.

The "landmark" air services agreement signed with Hong Kong in April had seen Qantas and Cathay preparing to increase service and Dragon Air tipped to do likewise, while also allowing Virgin Atlantic to finally land In Australia in December, Mr Brown said.

The coming Northern Winter schedule would result in a nine percent increase in international capacity to Sydney, a 19 percent increase to Melbourne, an eight percent increase to Brisbane and a 30 percent increase to Cairns.

"There is no other tourism industry on earth as dependent upon its aviation partnership as us. TTF will continue to promote a policy agenda that opens up opportunities for foreign carriers into Australia, and also forges similar openings for Qantas and Pacific Blue offshore," Mr Brown said. - Travelpress travel news

Here are the photos of the top 3 airlines in AUS posted on HKADB :


Boeing 737-7Q8 (VH-VBV)
http://img.photobucket.com/albums/v395/thomashk/DSC03126.jpg

Boeing 737-8FE (VH-VOK)
http://img.photobucket.com/albums/v395/thomashk/DSC03155.jpg

Boeing 737-8BK (VH-VOS)
http://img.photobucket.com/albums/v395/thomashk/DSC03244.jpg

Boeing 737-8BK (VH-VOD) "Blue Moon"
http://img.photobucket.com/albums/v395/thomashk/DSC03247.jpg

Boeing 737-8Q8 (VH-VOU)
http://img.photobucket.com/albums/v395/thomashk/DSC03252.jpg

Boeing 737-8EF (VH-VOT)
http://img.photobucket.com/albums/v395/thomashk/DSC03256.jpg

Pacific Blue Boeing 737-8EF (VH-VOR)
http://img.photobucket.com/albums/v395/thomashk/DSC03135.jpg

Actually, I don't really like the colour of Pacific Blue... :oops:
http://img.photobucket.com/albums/v395/thomashk/DSC03136.jpg

The 717 will be replaced by those 320 soon.
http://img.photobucket.com/albums/v395/thomashk/DSC03164.jpg

747-400
(You can see the Jetstar A320 from this photo!!)
http://img.photobucket.com/albums/v395/thomashk/DSC03389.jpg

Boeing 737-838 (VH-VXI)
http://img.photobucket.com/albums/v395/thomashk/DSC03254.jpg

Boeing 767 (internation)
http://img.photobucket.com/albums/v395/thomashk/DSC03406.jpg

taxi
http://img.photobucket.com/albums/v395/thomashk/DSC03407.jpg

Thursday October 21, 1:21 PM
Sydney Airport Posts 12PCT Rise in Passenger Numbers

SYDNEY, Oct 21 Asia Pulse - Sydney Airport took off strongly in the start of the 2005 financial year, posting a 12 per cent jump in passenger numbers for the three months to September.

Continued recovery in the airline industry also helped the bottom line, according to the airport's owner.

Southern Cross, the Macquarie Airports (MAp) led consortium which owns the Sydney airport, reported a 15.9 per cent jump in earnings before interest, tax, depreciation and amortisation (EBITDA) to $A118.8 million ($US87.15 million) from the previous corresponding period.

MAp chief executive Kerrie Mather said Sydney Airport had now delivered over two years of double digit earnings growth to investors, largely due to a broad range of commercial initiatives and the comprehensive restructuring of the business.

She also said the quarterly result was reflected in a recovery in passenger numbers as well as the successful implementation of an airport marketing strategy over the past two years.

In the quarter, the airport reported a total increase in passengers of 11.5 per cent.

Total traffic for September alone was estimated to have jumped 10 per cent over the previous corresponding period, which included a 7.2 per cent improvement in international travellers.

MAp said the rise in overseas visitor numbers continued to be influenced by the strong recovery from the Iraq war and SARS last year.

A strengthening Australian dollar also had helped stimulate outbound traffic.

Ms Mather said since the acquisition of Sydney Airport in 2002, the airport's performance was a key factor in the successful renegotiation of its debt facilities during the quarter.

"This has enabled Sydney Airport to put in place a more flexible, efficient and comprehensive financial structure to support the growth of the business," she said.

MAp said all parts of its Sydney Airport's business including aeronautical, property, commercial and retail, contributed positively to overall revenue growth.

During the quarter, total revenues rose by 14 per cent from the previous corresponding period to $148.7 million.

Also commenting on the result, Sydney Airport Corporation Ltd chairman Max Moore-Wilton said a strengthening in the recovery of the aviation market combined with the airport's streamlined operations contributed to the good result.

"The result was pleasing and represented the ninth consecutive quarter of double digit EBITDA growth since privatisation," he said.

MAp also today reported growth in passenger traffic across three out of its four airports.

Sydney, Rome and Bristol airports all experienced an increase in traffic for September while Birmingham airport traffic declined 4.3 per cent.

ASIA PULSE

Skywest operations take off
Skywest says its business in regional Western Australia has grown sharply and could indicate a boom in regional tourism.

Skywest operates flights to most areas in the state, and the carrier says its passenger numbers have risen by 65 per cent this year.

While the main Skywest customers are government and business passengers, chief executive officer Scott Henderson says tourist demand is rising.

"Look, our core market throughout Western Australia is business and government travellers. Skywest has recently changed our strategy and we're really trying to grow the tourism market and to that end we had just on Tuesday a Skywest showcase in Perth," he said.

The airline has also announced plans to list on the stock exchange.

The company launched a prospectus yesterday offering shares in the airline, and Mr Henderson says the float should be ready by November.

Tuesday October 26, 9:51 AM
QANTAS to Spend US$3.7 BLN Replacing B747 Fleet: Report

SYDNEY, Oct 26 Asia Pulse - Qantas Airways plans to spend more than $A5 billion ($US3.73 billion) replacing its ageing fleet of 747 jumbo jets with new generation long-haul aircraft.

The carrier would spend at least $US4 billion ($A5.4 billion) on new aircraft which would allow it to make non-stop flights from Australia to Europe, the Middle East and the United States.

The move would reduce fuel costs and landing fees, The Financial Review said today, citing sources.

Among the planes being considered are the new generation Boeing 777 or Airbus A340.

The spending spree would be on top of the A$18 billion Qantas had already flagged it would spend modernising its remaining fleet, including the purchase of 12 Airbus A380s capable of carrying 550 passengers each.

Valuair in GSA deal with WAS
Singapore-based “mid frills” carrier Valuair has appointed World Aviation Systems as general sales agent in Australia and New Zealand in the lead-up to the launch of daily Perth-Singapore flights from December 1.

Perth will be the first Australian destination for the carrier which was launched in May this year and currently flies Airbus A320 twinjets to Bangkok, Hong Kong and Jakarta.

“Valuair will offer a range of “value for money” air fares between Perth and Singapore, and will announce details in the coming week,” World Aviation Systems general manager Melvyn Almeida said.

“Unlike most other low cost operators, Valuair will include light meals, coffee and tea, audio and video entertainment, allocated seating and a free baggage allowance of up to 20 kilograms per person.”

The single-class aircraft will also feature leather seats with a 34-inch seat pitch (compared with 32 inches on other airlines on the route).

Valuair flight VF101 will depart Perth at 11.55pm, arriving in Singapore at 5.30am.

The return service, flight VF102, will leave Singapore at 5.40pm and arrive in Perth at 11.05pm

http://www.valuair.com.sg/images/MastHead.jpg
Now there is a smarter way from Singapore to Perth & back.
SIN-PER from S$350 (excluding tax and surcharges of approx S$145)
PER-SIN from AUD399 (excluding tax and surcharge of approx AUD115)

Sales start on 31 Oct 2004.

From 1 December 2004, you can fly daily from Singapore to Perth and back on Valuair, Singapore's first smart value airline. On Valuair, you'll enjoy even more leg room compared to economy class seats on other airlines. That's not all. You'll also get to view a selection of in-flight entertainment programmes.

To celebrate our launch, the first 50 passengers to come to the Valuair Singapore ticket office to book on our first two flights to Perth will receive a S$50 Valuair voucher. Terms and conditions apply

Full fare tables will be available at www.valuair.com.sg from 31st Oct onwards.

SIN-PER (VF101) PER-SIN (VF102)

DEP SIN: 1740
ARR PER: 2305

DEP PER: 2355
ARR SIN: 0540

Oct 29, 2004

Round trip to Perth for $350

Valuair's daily flights to Perth from Dec 1 will cost about half of SIA and Qantas fares

By Karamjit Kaur
Transport Correspondent

THE stranglehold that Singapore Airlines and Qantas have had over the highly lucrative route to Perth will be broken on Dec 1 when Valuair starts daily flights to the Western Australian city.

The low-frills carrier, the first of the budget crowd to venture into Australia, will do so at round-trip fares that start at about half of what the big boys charge. It will cost just $350, for a round trip, for those who book at least a month in advance - excluding taxes and other surcharges. Travellers who book at least two weeks beforehand will have to pay $420.

Currently, SIA and Qantas fly to Perth 28 times a week, charging about $650 to $700 return. Valuair said its highest fare will be 25 to 30 per cent less than what they charge. It will also have special student fares.

The airline received the nod to fly to Perth from Singapore last month, and got the green light from Australia last week. Its daily flight will leave Changi Airport at 5.30pm and reach Perth at 11.05pm that day. Flights from Perth will take off at 11.55pm and arrive here at 5.35am the next day.

'It's a good time to arrive in Singapore because passengers can then connect to our other flights to Bangkok, Hong Kong or Jakarta,' Valuair chief executive officer Sim Kay Wee told The Straits Times. 'And this way, we also help to promote Changi Airport as a hub.'

Those taking the carrier will find they have more leg room than on many other full-service airlines, as Valuair will be soon be acquiring two more Airbus A320 aircraft for its Perth service. Said Mr Sim: 'Each aircraft will have 150 seats instead of the usual 162, which means passengers will have a seat pitch of 86cm for a more comfortable ride.' The standard for economy class seats is 81cm.

Unlike its first two aircraft, its latest planes will also have in-flight entertainment systems, so movies can be screened. Mr Sim explained: 'The flights we now do to Bangkok, Jakarta and Hong Kong are less than three hours. But it's about four to five hours to Perth, so it's important to provide entertainment.' Valuair, which started operating in May, also serves food and allocates seats, unlike budget carriers Tiger Airways and AirAsia.

To gear up for its new service, it is working with the Singapore Tourism Board on promotions in Australia from next month, including lucky draws with air tickets and holiday packages here as prizes.

Mr Sim expects the Singapore-Perth route to be highly popular, as 55,000 Singaporeans visited West Australia last year. This is expected to jump to 61,000 this year. They make up about 14 per cent of West Australia's international visitors and are the state's second biggest source of foreign arrivals.

Bookings for the Perth service start on Sunday.

Housewife Zahara Bibi, 47, said: 'I've a sister who lives there, so this will give me a chance to visit her more often.'

Qantas to increase capacity on regional services
Perth Airport welcomes the announcement by Qantas that the airline will introduce the Boeing 717 on a number of regional routes out of Perth.

This is good news for people travelling within Western Australia as the new aircraft will provide a boost in capacity on regional routes, Perth Airport CEO Graham Muir said.

Perth Airport has been experiencing record numbers of domestic passengers, with the September quarter 2004 showing growth of 16% on the same period last year.

The number of domestic passengers travelling through Perth Airport have been at monthly record levels for the last 24 months in a row. This reflects the effect of cheaper fares and increased capacity by Qantas, Virgin Blue and Skywest. Mr Muir said

Friday October 29, 3:41 PM
Qantas increases flights to Britain via Singapore and Hong Kong

SYDNEY, (AFP) - Qantas Airways said it will increase the number of flights from Australia to Britain with stopovers in Hong Kong and Singapore.

Qantas general manager John Borghetti said that from Sunday the airline would add an extra three flights a week on both the Perth-Singapore-London and Sydney-Hong Kong-London routes.

"These six new flights will increase the number of UK services offered by Qantas from 21 a week to 27 a week," Borghetti said. "This will mean nearly 2,300 more seats to London."

He said Qantas would add a fourth extra flight on the Sydney-Hong Kong-London route in 2005 and it had approval to operate a further three flights from April 2006.

"Hong Kong has been a popular Qantas destination in its own right for a long time and now it will also be available as a stopover destination to Europe," he said.

Qantas also announced a codeshare agreement with Air Frace which will see the Australian airline's customers connect with daily Air France flights in Singapore to reach Paris.

No worries, China

CLIVE DORMAN
30 October 2004
The Age

The long-predicted boom in air travel between Australia and China is finally happening. After a series of setbacks - from the Tiananmen Square massacre in Beijing in 1989 to the SARS epidemic in 2002 and economic crises in between - liberalisation by Australia and China of their air services agreement has tens of thousands of Chinese visitors coming to Australia.

Once there was only a twice-a-week Beijing-Guangzhou-Melbourne-Sydney milk run, operated only by the Chinese state-owned carrier Air China. Now there is fierce four-way competition between Beijing-based Air China, Guangzhou-based China Southern, Shanghai-based China Eastern and Qantas, which will soon resume flying the Sydney-Shanghai route three times a week after several interruptions caused by one or other of the region's crises.

Some travel industry officials believe that by next decade there will be as many Chinese visitors to Australia as there are from America and Europe.

About 80 per cent of the airline seats coming in from China are now filled by Chinese, but the number of Australians visiting China is also on the rise.

At the moment all services from Melbourne to China are via Sydney bu next month China Eastern will begin north bound non-stop flights from Melbourne to Shanghai. (Air China, China Southern and China Eastern all fly non-stop from either Guangzhou or Shanghai to Melbourne on the southbound journey.)

By the middle of next year there will be as many as 3000 new weekly seats between Melbourne and the Chinas (Hong Kong and the mainland) as a result of air treaty liberalisation.

Industry officials believe it's only a matter of time before the routing of flights from Melbourne to China via Sydney disappears as more and more go direct to their destinations.

It's ironic and disappointing that the airline that has grown to become China's biggest, China Southern, is the smallest player in the Australian market behind China Eastern and Air China.

It's disappointing because even when China Southern goes daily to Australia from December, Melbourne will continue to get only two services a week (with the northbound trip via Sydney).

Yet China Southern is the best-placed of all the local carriers to move traffic in and out of China, in the same way that United Airlines has the advantage at Los Angeles because of its vast US domestic network.

For a start, China Southern's hub in Guangzhou (the old Canton), just over the fence from Hong Kong, is amazing. The new $4 billion airport, 30 kilometres east of the city, is being ramped up to take up to 80 million passengers a year by the end of this decade, making it the third-biggest airport on the planet. (So it should be, as Guangdong province, of which Guangzhou is the capital, accounts for a quarter of China's annual economic output!)

It's also perfectly positioned geographically to take flights from Australia. Not only is it the closest landfall from Down Under, but China Southern's huge local network enables seamless connections to virtually every important destination in the country, from Beijing in the north, to Chengdu and Chongqing in the west and Sanya (China's emerging beach holiday getaway on Hainan Island) in the south. China Southern even flies to Lhasa, Tibet, in the Himalayas.

China Southern says the existing four services a week from Australia arrive in Guangzhou in time to make up to 100 daily domestic connecting flights.

Trying to do the same thing via Shanghai further north can add hours to the trip, if the connection is possible at all. And it's difficult via Hong Kong, which has only a small and relatively infrequent intra-China network operated by Cathay Pacific and the local carrier, Dragonair.

However, there's another task that all the Chinese carriers will be able to perform with increasing frequency and convenience in the next few years: flying Australian travellers on to Europe. China Southern, for example, already operates regular services from Guangzhou to Paris and Amsterdam.

>>>Qantas Now Fly 3 Times Weekly Perth - Hong Kong Using A330s - Every Seat Has A TV Screen

Virgin Atlantic eyes the superior seats

Scott Rochfort
28 October 2004
The Sydney Morning Herald

The biggest threat Virgin Atlantic faces when it lands
in Australia on December 8 won't be the Flying
Kangaroo but its sister airline, Virgin Blue.

It's not that both airlines will be competing, just
that Virgin Atlantic concedes it will have to overcome
the budget mantra now synonymous with the Virgin name
in Australia if it wants to lure passengers to its
Upper Class berths.

Given Virgin Atlantic's key objective is to snare some
of the 70 per cent of the Australia-London business
and first-class market "owned" by Qantas and British
Airways, the airline's Australian marketing manager,
Gia Acitelli, said: "Basically the campaign is to
differentiate us from Virgin Blue."

Ms Acitelli would not say how she planned to do this
but the other objective of her $1 million, five-month
campaign - to be launched next month - will be to
promote Virgin Atlantic's Upper Class bed, which it
believes is superior to that on Qantas flights.

Virgin says its Upper Class bed is 33 inches (84
centimetres) wide around the shoulder area, against
23.5 inches on Qantas First Class. Virgin Atlantic
even says Qantas scaled back its Skybed campaign in
August - when its I Still Call Australia Home ads were
re-launched - because it realised its business class
product was inferior to Virgin's.

"I notice now that their whole advertising spin has
changed since we came to the market," Ms Acitelli
said.

But Qantas marketing manager Martin McKinnon suggested
Virgin Atlantic executives should perhaps drive past
Sydney Airport. "There's a huge billboard, 60 foot
long promoting the Skybed."

He said Qantas planned to keep promoting its Skybed,
along with its I Still Call Australia Home ads.

Virgin challenged BA's long-held supremacy of the
trans-Atlantic business class market when it was the
first to introduce "truly flat bed" seats last year.

Advertising through print media, billboards and
internet, Virgin Atlantic is keen to spread the word
about its Upper Class bed and other services such as
on-board masseurs and chauffeur-driven journeys for
passengers from London's Heathrow Airport.

Given its small ad budget, the airline makes no secret
of how it will promote its product.

"We don't spend a lot of money on advertising, simply
because we have a terrific PR machine called Richard
Branson," Ms Acitelli said.

Sir Richard, the airline's founder, gained a few
headlines last year with his proposal to fly a
Concorde on Virgin's inaugural flight to Sydney. Then
there was his unreciprocated challenge to Qantas chief
executive Geoff Dixon to dress as a hostess if his
airline did not land in Sydney by next year.

Virgin Atlantic has no plans for TV ads but notes that
for "four or five days we'll be in the press" when Sir
Richard visits Australia this December.

At a conference planned for next week, Virgin Atlantic
will be the only airline to contest an Australian
Competition and Consumer Commission proposal to extend
Qantas's and BA's joint service agreement for five
more years. The agreement allows them to co-ordinate
schedules and fares on Australia-London flights.

http://www1.perthairport.com/images/banner_internal.jpg

DOMESTIC AIRLINES SERVING PERTH DOMESTIC
-Qantas
-Virgin Blue
-Skywest
coming soon:
jetstar

FLYING DIRECT TO
-Sydney
-Melbourne
-Adelaide
-Brisbane
-Gold Coast
-Cairns
-Canberra
-Darwin
-Alice Springs
-Ayres Rock
-Kunnanurra
http://www1.perthairport.com/uploads/PHOTOID_LARGE_199.jpg



INTERNATIONAL AIRLINES SERVING PERTH INTERNATIONAL
-Qantas
-Singapore Airlines
-Emeriates
-Malaysian Ailines
-Thai Airlines
-Garuda Indonesia
-Royal Brunei
-South African
-Air New Zealand
-Cathay Pacific
-Air Mauritius
-Air Paradise
-National Jet System
coming soon:
-ValuAir
-Australian

FLYING DIRECT TO
-Auckland
-Singapore
-Hong Kong
-Tokyo
-Dubai
-Jakarta
-Christmas Island
-Cocos Island
-Dempensa
-Kuching
-Bangkok
-Mauritius
-Jakarta
-Phuket
-Kuala Lumpa
-Brunei
-Johannesburb
http://www1.perthairport.com/uploads/PHOTOID_LARGE_199.jpg

http://www1.perthairport.net.au/uploads/PHOTOID_227.jpg
The kwest is on to develop a world class business and logistics precinct on land at Perth Airport.

Perth Airport is Western Australia's most unique property development site with some 700 hectares of land available.

The site is being developed by kwest, the property development division of Westralia Airports Corporation.

No other site comes close to offering the combined advantages of:
-proximity to the CBD
-unconstrained development and expansion potential
-highly competitive leasehold terms
-adjacency to primary arterial roadways
-high profile public exposure
-direct connection to international, domestic, regional and corporate air services

The Living Stream
Kwest is creating a new green gateway to Perth Airport. An ancient water course that once flowed from the hills to the Swan River will be revived forming a new parkland corridor. The Living Stream will provide an environment of campus style offices and high value developable land.

Four major precincts are being developed on the estate:
1. Kewlink Intermodal Business Park
An advanced logistics management precinct with on demand supply chains making central and shared warehousing a reality.
2. hkew Office Park Gateway Precinct
Premium grade office buildings located on the Living Stream.
3. onkew Logistics Park
State of the art logistics. The connectivity of air, rail, road, shipping and warehousing will create a world standard in logistics.
4. ikew International Business Park
A dynamic precinct featuring companies whose activities centre of Perth Airport.

The Master Plan outlines a framework for development of the airport's non-aeronautical property, which is defined as land surplus to passenger and airfield related and ancillary support requirements.

The purpose of the strategy is to provide strategic development direction that is guided by sound on-airport and off-airport planning principles.

The recommended land uses and development plan is meant to be used as a broad framework. Details are subject to change in the future as implementation of the development plan occurs over time.

Objectives
The non-aeronautical property strategy incorporates both planning and development objectives. The planning objectives intend to define land uses and a development plan which:
-integrates the airport's overall development strategy and aeronautical requirements
-accommodates planning constraints unique to airport property such as noise and height limitations
-is sensitive to natural heritage areas
-is consistent with regional and local planning principles
-fosters and support sustainable development using "best practise".
The development objectives
-structure sustainable development that enhances the airport's overall viability
-leverage the key strengths of the market and location
-design a development program that provides a strong and sustainable image for the commercial properties
-maximise the strategic value of airport land.

Development Opportunities
Competitive Advantage
Perth Airport is the gateway to Perth and the State of Western Australia, and is well situated geographically, politically and economically for dynamic opportunities into the next decade.

Key strengths include:
-proximity to the South-East Asia market
-strong resource industries
-good lifestyle
-attractive tourist destination
-above average population growth
-economic stability
-political freedom and stability
-high quality infrastructure; and
-educated and skilled workforce.
-Business Opportunities

Given the outstanding regional features of Perth Airport, the following business opportunities can be accommodated:
-industries that depend on good logistical support
-multinational corporations that need a regional base with a good image
-high technology industries that value just-in-time manufacturing and delivery
-air, road, and other transportation-based industries
-industries that process and produce time-sensitive products.

The advantages of the Perth region together with the advantages of developing on an international airport provides strategic business opportunities for commercial properties which could include:
-Australasian business centre
-regional corporate headquarters
-high technology research and development manufacturing complex;
-entertainment/recreational centre
-world-class logistics hub.

Development Strategy
The development strategy is based on seven precincts with allocated land use categories.

The precincts have been configured, sized, and located to achieve the following objectives:
-maximise their respective exposure to major existing and projected regional networks
-allow flexibility for future subdivision and internal roadway layouts
-accommodate existing physical boundaries such as major roadways
-compose land with high conservation and heritage priories into large contiguous areas.

Each precinct has been designed to support the planning and real estate value of surrounding precincts and further support the airport's image as a global transportation and logistics centre. Strategic opportunities have been assessed against the strengths and weaknesses of the seven precincts, which have resulted in eight-land use categories:
-high profile commercial uses
-airport aviation commercial uses
-general commercial uses
-short stay accommodation uses
-recreational uses
-light industrial uses
-warehouse/showroom uses
-conservation areas

Valuair gets go-ahead for Perth/Singapore services
Perth Airport congratulates Valuair on being granted its Australian Air Operators Certificate (AOC) and International Airline Licence allowing the budget airline to begin services to Perth on 1st December 2004.

Valuair is the first budget carrier to commence services on the Perth Singapore route. Tickets go on sale from 31st October and it is expected that the airline will prove popular with leisure travellers.

Perth Airport and the State Government worked closely with Valuair to deliver this service to the Western Australian public, Perth Airport CEO Graham Muir said.

It is great news for Western Australians travelling to Singapore and great for WA tourism with the airline likely to generate more leisure travellers from Singapore to the state Mr Muir said.

It also provides further opportunity for travellers to great deals on connecting air fares to and from Valuairs other destinations including Bangkok, Jakarta and Hong Kong he said.

Valuair will operate daily services departing Perth at 23:55 arriving in Singapore at 05.30 and departing Singapore at 17:40 arriving into Perth at 23:05.

The airline will operate an Airbus A320 aircraft with 150 seats.
http://www1.perthairport.com/content.aspx?ContentID=294

"australian carrier Qantas Airways said it will increase the number of flights from Australia to Britain with stop-overs in Singapore. The airline plans indeed to add 3 extra flights a week on the Perth-Singapore-London route"

Tuesday November 9, 7:58 AM
QANTAS Carries 11.3% More Passengers in Sept Yr-on-Yr

SYDNEY, Nov 9 Asia Pulse - Australia's biggest carrier Qantas Airways Ltd carried more international and domestic passengers in September compared to the same month a year ago, the airline's latest traffic figures show.

Total domestic passengers carried totaled 1.96 million, up 11.3 per cent, while international passengers carried rose 6.9 per cent to 771,000.

Overall, the number of passengers carried was up 10 per cent to 2.73 million in September, from September 2003.

Qantas said domestic traffic as measured by revenue passenger kilometres (RPKs) rose 10.4 per cent.

Capacity as measured by available seat kilometres (ASKs) was up 10.6 per cent.

"This resulted in a revenue seat factor of 80 per cent, 0.2 percentage points lower than for September 2003," it said.

International RPKs was up 8.4 per cent and ASKs by 18.7 per cent.

That resulted in revenue seat factor of 72.9 per cent, down 6.9 percentage points on September 2003.

September group RPKs rose 9.1 per cent, ASKs were up 16 per cent while the revenue seat factor was 75.2 per cent, down 4.8 percentage points.

In the year to September 30, group passenger number were up 11.2 per cent to 8.23 million.

RPKs increased by 11.3 per cent, while ASKs rose 17.4 per cent, resulting in a revenue seat factor of 76.2 per cent, down 4.2 per cent on the previous corresponding year.

Qantas' low cost airline Jetstar carried 334,000 passengers in September, up from 321,000 in August and 273,000 in July.

colourful qantas 747 jumbo made a visit to perth this week (to singapore)
http://www.imagestation.com/picture/sraid146/p171aef3c3d688d02becd77a84d38ea82/f64f084e.jpg

Perth Airport No.1
Perth Airport, the wholly owned subsidiary of Airstralia Development Group, has been voted Australian Major Airport of the Year for the second year running. The Australian Airports Association (AAA) presented the award to Perth Airport at the organisation’s award dinner held in Alice Springs.

AAA made their decision based on some outstanding achievements by Perth Airport including boosting its EBITDA by 25 per cent on the previous year by posting an operating profit of $2.34 million, on-time implementation of a $2.1 million business system upgrade, and completed construction of the $1.4 million driver training centre.

The airport also was able to erect the new 3,500 square metre AQIS building worth $5.6 million, and commence construction of a $25 million upgrade of the international terminal building that will include including an extra 14 check-in counters, additional floor space and a new baggage handling system.

Turnover for the airport in 2003/04 was comprised of 1.76 million international passengers and 4.27 million domestic passenger.

The Australian Infrastructure Fund run by Hastings Fund Management has a 26 per cent equity holding in the Airstralia Development Group.
http://www.financialstandard.com.au/index.php?id=5089

"australian carrier Qantas Airways said it will increase the number of flights from Australia to Britain with stop-overs in Singapore. The airline plans indeed to add 3 extra flights a week on the Perth-Singapore-London route"
Err? Where was that quoted from?

^ See post 26 - article about Qantas' expansion of European flights via Hong Kong and Singapore.

Perth Airport wins top accolade
11 November 2004
The West Australian

Perth Airport has been named Australia's premier airport for the second consecutive year.

The Australian Airports Association named Perth Airport as Australian major airport of the year in Alice Springs on Tuesday.

It was awarded the accolade for a number of achievements in the 2003-04 financial year including a first-ever profit of $2.34 million, an accident-free year and the completion of various construction projects.

http://www1.perthairport.com/images/banner_internal.jpg

International Terminal Project

http://www1.perthairport.com/uploads/PHOTOID_219.jpg

Project Overview
The project comprises the expansion of the International Terminal Building (ITB) to allow the provision of 38 new check-in counters and an automatic baggage handlng system incorporating checked bag screening (CBS). Fourteen additonal check-in counters will be provided within the main hall extension area along with expansion of the baggage make-up hall to accommodate the new baggage handling system and a new third make-up carousel. Estimated cost of the project is around $25m and will be completed by February 2005.

http://www1.perthairport.net.au/uploads/PHOTOID_223.jpg

Project Update
The Builder for the project - Cooper & Oxley has endeavoured to accelerate construction during the past 6 weeks with the major milestone of the pouring of the first floor prestressed slab being achieved on 30th August. The adjoining shot taken from the upper level scaffold shows the extent of the northern portion of the slab and commencement of the metal deck roof framing.

http://www1.perthairport.net.au/uploads/PHOTOID_224.jpg

Project Milestones
The first floor suspended slab was poured continuously and required the Airport Security Gate 1 to be closed for most of the day to allow access to over 90 concrete trucks onto the site. The photo below shows concrete placement at approximately the half way point of the pour. Quality and time performance targets for the day were achieved successfully.

Check-in Hall Progress
The main check-in hall area and overall form of the building is clearly evident from this photo. Services to the check-in area are progressing with the main external structural elements on the northern side being close to completion. End wall cladding is being installed and weather proofing of the terminal to this elevation will progress over the next 3 weeks.

Passenger numbers break records at Perth Airport
Perth Airport was buzzing in October with nearly 600,000 passengers travelling through the airport.

This is the highest number of international and domestic passengers that the airport has ever handled in a calendar month, Perth Airport CEO Graham Muir said.

This beats our last record month which was set in July this year with 562,000 passengers Mr Muir said.

Around 428,000 domestic passengers travelled through the airport in October, an all time record, up 14% on the same month last year and 6% higher than July, the last record month.

Domestic passengers through Perth Airport are now 30-40% higher than they were before the collapse of Ansett due to the fantastic travel deals offered by Qantas, Virgin Blue and Skywest Mr Muir said.

In response to the higher domestic passenger trends, Perth Airport is undertaking an upgrade of Terminal 3, the terminal where Virgin Blue and Skywest operate. There will also be a 22% increase in car parking capacity.

International passenger numbers are also climbing into the records with Perth Airport welcoming around 167,000 travellers in October 2004, a 10% increase on October 2003 figures.

This was a great outcome considering that the Rugby World Cup was held in October 2003 which caused thousands of international rugby fans to travel to Perth, said Mr Muir.

The record passenger numbers in October preceded a 17-18% growth in international seating capacity under the new Northern Winter Schedule, which commenced on 31st October. The new schedule includes two new Airlines servicing Perth, Valuair and Australian Airlines, which will commence operations in December this year.

Perth Airport was awarded the prestigious Australian Major Airport of the Year 2004 title by the Australian Airports Association at its national conference in Alice Springs this week. The second year in a row Perth Airport has received this award.
http://www1.perthairport.com/content.aspx?ContentID=296

These data from the Australian Government might be of much interest to aviation buffs in the Australian context. These are the latest data for the year 2003.

TABLE I: INTERNATIONAL PASSENGERS BY UPLIFT/DISCHARGE AND CITY PAIRS

This table shows the total number of passengers carried by all schedules airlines out of any Australian port to any international destination for the year 2003.

% Change
Foreign Australian Year ended % of 2003 over
Port Port December 2003 Total 2002
Auckland Sydney 1,137,536 6.9 16.9
Singapore Sydney 917,367 5.6 -3.2
Singapore Perth 665,063 4.0 -2.7
Singapore Melbourne 625,305 3.8 -5.5
Los Angeles Sydney 612,352 3.7 -8.2
Singapore Brisbane 552,094 3.4 22.5
Auckland Melbourne 536,031 3.3 6.6
Auckland Brisbane 530,866 3.2 19.8
Hong Kong Sydney 504,054 3.1 -14.3
Christchurch Sydney 444,022 2.7 13.6
Bangkok Sydney 443,639 2.7 -3.6
Tokyo Sydney 421,800 2.6 -4.1
London Sydney 387,448 2.4 10.8
Seoul Sydney 335,663 2.0 -0.4
Kuala Lumpur Sydney 293,310 1.8 -4.9
Los Angeles Melbourne 257,915 1.6 26.4
Hong Kong Melbourne 246,619 1.5 -11.1
Kuala Lumpur Melbourne 244,370 1.5 2.2
Tokyo Brisbane 238,368 1.4 -3.7
Tokyo Cairns 234,048 1.4 -7.7
Wellington Sydney 221,313 1.3 -0.7
Nadi Sydney 216,885 1.3 4.0
London Melbourne 198,085 1.2 15.8
Bangkok Melbourne 191,424 1.2 -7.0
Kuala Lumpur Perth 184,089 1.1 5.7
San Francisco Sydney 174,844 1.1 6.1
Christchurch Melbourne 158,996 1.0 3.1
Dubai Melbourne 146,885 0.9 1.9
Dubai Sydney 145,155 0.9 50.9
Christchurch Brisbane 144,281 0.9 -2.0
Denpasar Perth 139,071 0.8 -10.7
Nagoya Cairns 130,550 0.8 2.1
Osaka Sydney 128,693 0.8 -23.0
Johannesburg Sydney 126,198 0.8 8.8
Denpasar Sydney 123,390 0.8 -21.0
Dubai Perth 118,399 0.7 196.9
Honolulu Sydney 118,364 0.7 -9.1
Vienna Sydney 115,570 0.7 3.6
Osaka Brisbane 108,922 0.7 -20.1
Taipei Sydney 107,258 0.7 5.0
Singapore Adelaide 103,581 0.6 3.5
Manila Sydney 102,223 0.6 4.1
Wellington Melbourne 101,932 0.6 -4.0
Kuala Lumpur Brisbane 98,068 0.6 -5.2
Johannesburg Perth 95,752 0.6 -1.0
Hong Kong Brisbane 95,731 0.6 -28.2
Osaka Cairns 95,193 0.6 -2.2
Shanghai Sydney 94,515 0.6 3.3
Vancouver Sydney 93,082 0.6 19.9
Wellington Brisbane 89,045 0.5 -5.8
Denpasar Melbourne 82,245 0.5 -9.2
Frankfurt Sydney 81,362 0.5 43.4
Noumea Sydney 80,731 0.5 -1.3
Los Angeles Brisbane 79,417 0.5 26.0
Auckland Perth 77,067 0.5 -0.6
Nadi Melbourne 74,872 0.5 11.2
Tokyo Melbourne 73,708 0.4 8.7
Hong Kong Cairns 71,645 0.4 5.1
Jakarta Sydney 71,616 0.4 -20.3
Kuala Lumpur Adelaide 69,397 0.4 5.0
Nadi Brisbane 69,202 0.4 22.1
Hong Kong Perth 66,316 0.4 -28.2
Bangkok Perth 65,767 0.4 -12.4
Auckland Gold Coast/Coolangatta 64,445 0.4 4.6
Port Moresby Brisbane 59,229 0.4 -2.2
Bangkok Brisbane 56,578 0.3 8.2
Seoul Brisbane 56,050 0.3 11.8
Taipei Brisbane 55,472 0.3 -9.1
Guangzhou Sydney 52,797 0.3 -15.6
Tokyo Perth 51,713 0.3 4.3
Singapore Cairns 51,110 0.3 25.2
Bandar Seri Begawan Brisbane 46,876 0.3 -15.0
Vienna Melbourne 45,885 0.3 8.3
Beijing Sydney 45,698 0.3 -23.8
Port Moresby Cairns 45,671 0.3 -8.3
Auckland Cairns 44,665 0.3 0.6
Hamilton Brisbane 43,215 0.3 -11.4
Ho Chi Minh City Melbourne 39,855 0.2 -7.0
Singapore Darwin 39,099 0.2 56.8
New York Sydney 38,540 0.2 20.8
Santiago Sydney 38,080 0.2 107.7
Bandar Seri Begawan Perth 38,067 0.2 -10.2
Palmerston Brisbane 37,021 0.2 7.1
Denpasar Brisbane 35,869 0.2 -28.2
Port Vila Sydney 35,677 0.2 0.4
Fukuoka Cairns 35,609 0.2 557.5
Noumea Brisbane 33,874 0.2 -3.3
Dunedin Brisbane 31,296 0.2 -5.2
Buenos Aires Sydney 29,233 0.2 -21.0
Jakarta Perth 27,521 0.2 -17.4
Christchurch Gold Coast/Coolangatta 26,985 0.2 454.7
Denpasar Darwin 25,493 0.2 -41.0
Guam Cairns 25,193 0.2 14.7
Hamilton Melbourne 24,646 0.1 -0.4
Manila Melbourne 23,060 0.1 -8.1
Hamilton Sydney 22,916 0.1 -0.1
Port Moresby Sydney 22,231 0.1 0.1
Hong Kong Adelaide 22,163 0.1 -19.9
Guangzhou Melbourne 21,691 0.1 -31.9
Port Vila Brisbane 21,147 0.1 3.7
Dubai Brisbane 18,896 0.1 100
Suva Sydney 18,767 0.1 14.8
Honiara Brisbane 18,071 0.1 14.9
Dunedin Sydney 17,828 0.1 -6.2
Hamilton Gold Coast/Coolangatta 17,605 0.1 -8.4
Palmerston Sydney 17,526 0.1 -6.8
Palmerston Melbourne 17,068 0.1 0.6
Dunedin Melbourne 16,924 0.1 10.1
Paris Perth 16,476 0.1 95.5
Mauritius Melbourne 16,415 0.1 7.5
Phuket Perth 16,151 0.1 -31.0
Shanghai Melbourne 15,303 0.1 304.7
Auckland Norfolk Island 15,252 0.1 -4.0
Beijing Melbourne 14,617 0.1 -8.2
Queenstown Sydney 14,119 0.1 -24.8
Chicago Sydney 14,113 0.1 -3.8
Osaka Gold Coast/Coolangatta 13,032 0.1 280.8
Mauritius Perth 13,009 0.1 20.2
Bandar Seri Begawan Darwin 12,865 0.1 -5.8
Dunedin Gold Coast/Coolangatta 12,707 0.1 59.9
Taipei Cairns 12,354 0.1 289.0
Manila Brisbane 12,163 0.1 -3.7
Ho Chi Minh City Sydney 11,936 0.1 -57.7
Denpasar Adelaide 11,708 0.1 -44.5
Apia Sydney 11,162 0.1 29.7
Kuching Perth 9,997 0.1 14.9
Kota Kinabalu Sydney 9,098 0.1 100
Nagoya Sydney 9,007 0.1 -75.2
Nauru Brisbane 8,183 0.0 -17.7
Bahrain Sydney 7,892 0.0 9.3
Honolulu Melbourne 6,208 0.0 -73.3
Rome Melbourne 5,566 0.0 -81.6
Hanoi Melbourne 4,971 0.0 16.5
Queenstown Brisbane 4,883 0.0 -4.2
Rome Brisbane 4,607 0.0 -38.5
Chicago Melbourne 4,574 0.0 80.1
Tongatapu Sydney 4,365 0.0 6.3
Nagoya Gold Coast/Coolangatta 3,665 0.0 17.5
Nauru Melbourne 2,780 0.0 -5.1
Hanoi Sydney 2,153 0.0 -45.8
Rome Perth 2,119 0.0 -64.1
Rome Sydney 1,704 0.0 -94.3
Phuket Melbourne 1,140 0.0 100
Phuket Sydney 777 0.0 100
Kota Kinabalu Cairns 523 0.0 100
Fukuoka Gold Coast/Coolangatta 499 0.0 -65.2
New York Melbourne 444 0.0 -95.4
Papeete Sydney 380 0.0 -87.9
Bangkok Darwin 233 0.0 796.2
Paris Sydney 133 0.0 -99.6
Niue Sydney 96 0.0 700.0
London Perth 45 0.0 -99.9
London Brisbane 9 0.0 -100.0
New York Brisbane 9 0.0 -97.2
Honolulu Brisbane 2 0.0 -99.9
ALL CITY PAIRS 16,445,508 100.0 0.4
It will be interesting to see how the figures may change this year, especially given the SARS epidemic effecting aviation travel in the East Asian region.

http://www1.perthairport.com/images/comp_centre.jpg
http://www.imagestation.com/picture/sraid147/pebeaa5afc4c88cef87b0a203133db821/f63b30e0.jpg
http://www.imagestation.com/picture/sraid147/pbba4ccf2e30ca88191dac294fe087dcf/f63b30df.jpg
http://www.imagestation.com/picture/sraid147/p7b73e258ee05c5c1fc85080347a49e72/f63b30dc.jpg
http://www.imagestation.com/picture/sraid147/p83a20d9310573642906929b2156c507c/f63b30d9.jpg
http://www.imagestation.com/picture/sraid147/p28bc1c2e245398e791ddb4f67af2e74b/f63b30d8.jpg
http://www.imagestation.com/picture/sraid147/pfd61ef96dcceacaffba88626babb6afb/f63b30d5.jpg
http://www.imagestation.com/picture/sraid147/p1833fc4e2a6e365eac12396f1653e2ec/f63b30d4.jpg
http://www.imagestation.com/picture/sraid147/p0aa73789c43ba6b1dff1c5c453d44db4/f63b30d1.jpg
http://www.imagestation.com/picture/sraid147/p7a176ba7635f9fac765b0a93f212a847/f63b30cd.jpg
http://www.imagestation.com/picture/sraid147/p7a650a80931b4a1f243ef39c1236503b/f63b30cf.jpg
http://www.imagestation.com/picture/sraid147/p991339b1afba537a80c80c16e855b954/f63b30cb.jpg
http://www.imagestation.com/picture/sraid147/pbd9dfd69a45fcc0e14f833ce948760f7/f63b30c7.jpg
http://www.imagestation.com/picture/sraid147/p2fcdcc5f29ad31c96c185fb5ff7a5a06/f63b30c3.jpg
http://www.imagestation.com/picture/sraid147/p4820927e16ab37be71407e352805f2da/f63b30c1.jpg
http://www.imagestation.com/picture/sraid147/p8237ad913907d581d980ef82b3feaa77/f63b30c0.jpg
http://www.imagestation.com/picture/sraid147/pe19f31e4f439910f144207b6dc815f0c/f63b30be.jpg

Wednesday November 17, 1:53 PM
Virgin Blue interim profit falls amid uncertain outlook

SYDNEY (AFP) - Discount Australian airline Virgin Blue posted a 1.8 percent fall in first half net profit and said volatile fuel prices were making the outlook uncertain.

Virgin Blue said net profit for the six months to the end of September was 63 million dollars (48.8 million US), compared to 64.2 million dollars in the same period last year.

The company said yields were down 12 percent over the half year due to increased capacity.

"The outlook remains uncertain," the company said in a statement to the Australian Stock Exchange.

"Yield is expected to remain under pressure and below last year's levels. While fuel continues to be volatile and at record prices, Virgin Blue remains exposed to further increases in fuel prices that may not be recoverable through fare increases."

Virgin Blue, which listed in December last year, did not declare an interim dividend.

Shares in the airline fell six cents or 2.96 percent to 1.97 dollars shortly after the announcement after being up two percent before the figures were released. The overall market was up slightly.

Nov 18, 2004

SIA slashes fares to Perth by half to meet budget challenge

Move is seen as counter to Valuair's plans to fly there; price cuts also made for other sectors eyed by no-frills carriers

By Karamjit Kaur
Transport Correspondent

SINGAPORE Airlines (SIA) has more than halved its fares to Perth in an apparent move to undercut budget upstart Valuair, which is slated to begin flights to the Western Australian city next month.

For passengers travelling in pairs, SIA is quoting a fare of $328 each for round-trip tickets on selected flights, which is $22 below Valuair's minimum fare of $350 a ticket. However, for a single passenger, SIA is charging $660.

In a half-page advertisement in The Straits Times yesterday, the full-service airline also unveiled price cuts of up to 22 per cent for flights to Hanoi and Ho Chin Minh in Vietnam, destinations that budget carriers like Tiger Airways and Jetstar Asia - which starts operating next month - are said to be eyeing.

Round-trip tickets to Hanoi are going for $298 per head, if four people travel together, or $398 if two go together.

For Ho Chin Minh, it is $278 each for a group of four and $328 each for a pair.

SIA is also offering discounted fares to Hong Kong, Shenzhen and Guangzhou.

Its deals - all for selected flights and for a limited number of seats - were announced a day after Australian national carrier Qantas said it would offer discounts of up to 40 per cent on tickets to Perth and other destinations in Australia.

Passengers travelling in pairs can buy return tickets to Perth for $348 per head. When contacted, Qantas' spokesman here said the deals have nothing to do with Valuair flying to Perth, but are part of the airline's 84th birthday celebrations.

She said: 'Qantas has launched a massive birthday sale across the region... We are the world's second oldest airline and this is our way of thanking our customers for their loyal support.'

Bookings for the Qantas offer close at midnight today and tickets are valid for travel between Feb 9 and March 31.

SIA's promotion is valid for travel between Dec 24 and Jan 31, but tickets must be issued by Dec 3.

A spokesman for the airline's sales service said that 'as part of our periodic review of flights, we regularly offer promotions where there are opportunities'.

SIA and other carriers had also cut fares when Valuair and Tiger Airways started flying to Bangkok.

http://straitstimes.asia1.com.sg/mnt/media/image/launched/2004-11-18/h7.jpg
COMPETITION BENEFITS CONSUMERS, SAYS VALUAIR: 'SIA and Qantas are offering promotional fares to Perth for a limited period of time and for limited seats, but our fares are available throughout the year. At the end of the day, it is the consumer who benefits. It is interesting to note that Valuair had to enter the market before the big airlines decided to cut their fares.' -- MR SIM KAY WEE, Valuair's chief executive officer, saying the budget carrier is not worried that established airlines like SIA are cutting their prices

Nov 17, 2004
SIA's hopes brighten for Aussie-US flights

Canberra will consider granting the airline unlimited access to trans-Pacific routes

By Karamjit Kaur
Transport Correspondent

AFTER pushing for more than 10 years for the right to fly the lucrative Australia-United States route, there may finally be light at the end of the tunnel for Singapore Airlines (SIA).

In the most positive statement from the Australian government on the issue to date, Deputy Prime Minister and Transport Minister John Anderson was quoted by the Australian Financial Review on Monday as saying that his government will consider granting SIA unlimited access to trans-Pacific routes in the next 12 to 18 months.

But both the Australian government and SIA will first have to overcome the strong objections of Australian flag carrier Qantas.

The agreement sought by SIA will allow it to compete with Qantas on routes like the money-making Sydney-Los Angeles sector.

Mr Anderson's statement is an important development for SIA, which is a major player in both the Australian and US west coast markets but is unable to offer services connecting the two.

The airline operates 80 flights a week to Australia, making it the country's largest overseas-based carrier, SIA spokesman Stephen Forshaw told The Straits Times.

An agreement with Australia would allow SIA to make more use of the 'open skies' deal Singapore already has with the US, which imposes no restrictions on air capacity between the two countries.

Mr Forshaw said: 'Serving two markets where the SIA brand is very strong and where our customer base is very large would provide an opportunity for SIA's future growth.'

Qantas has for a long time been a vocal opponent of any plans to open up the market to SIA.

The direct trans-Pacific route - a duopoly controlled by Qantas and United Airlines - is Qantas' most lucrative, making up an estimated 10-15 per cent of its profits.

SIA claims it does not intend to 'squabble' with Qantas and United Airlines over market share.

'Our assessment is that there is unmet demand on the Australia-US route. There isn't enough capacity on the route to feed the demand, particularly from the US, with people wanting to visit Australia,' Mr Forshaw said.

'In addition, business travellers are always complaining that there aren't enough seats at key periods of the year.'

Less than a month ago, a spokesman for Mr Anderson said that the government was not 'prepared to revisit the issue of trans-Pacific rights' until there was 'greater stability in the global aviation environment'.

But this week, Mr Anderson told the Australian Financial Review: 'I believe that the global outlook has stabilised and improved and we gave the Singaporeans a commitment that when things had settled down, we would talk to them again.'

Qantas, however, was not quite so welcoming.

In the same article, its chief financial officer Peter Gregg was reported as saying through a spokesman: 'If Mr Anderson has said that he believes the global aviation industry has stabilised, we disagree with that view.'

For one thing, aviation fuel prices are still at historic highs, he said.

A spokesman for the Transport Ministry said the Singapore Government hopes the long-outstanding open skies agreement with Australia can be concluded soon.

'It will benefit our overall economies and our people and further catalyse the growth of trade, tourism, investment and people-to-people links between our two countries,' she said.

--------------------------------------------------------------------------------

Why now?

FOR some industry analysts, Deputy Prime Minister and Transport Minister John Anderson's statement represents a major shift in the Australian government's thinking. The change, they suspect, has to do with Australia wanting to secure a licence and air rights for Jetstar Asia, a budget airline 49 per cent owned by Qantas.

The airline, scheduled to begin operating here in December, has yet to be granted licence by the Civil Aviation Authority of Singapore.

Mr Peter Harbison of the Sydney-based Centre for Asia Pacific Aviation said: 'It seems a strange coincidence that the Australian government is now saying it will consider giving Singapore Airlines the right to fly the trans-Pacific routes just when Jetstar Asia is due to start operating.'

For many years, Singapore had no leverage over Qantas, which already enjoys unlimited rights to operate out of Changi.

Mr Kevin O'Connor, an aviation analyst at CLSA research house, said: 'Is it possible that Jetstar Asia was the quid pro quo in this case? Yes, I think it could have been.'

Friday November 19, 5:04 AM
AUSTRALIA PRESS: Qantas, Air France Work On Closer Ties

SYDNEY (Dow Jones)--Qantas Airways Ltd. (QAN.AU) is considering extending its cooperative relationship with Air France SA (3112.FR) into China, less than a month after the airlines began code-share flights between Singapore and Paris, the Australian reports Friday.

Qantas Chief Executive Officer Geoff Dixon made an overnight visit to Paris last week to discuss a co-pricing arrangement with Air France for some Asian destinations, the report says.

A deal with Air France, which flies daily to Shanghai, Guangzhou, Beijing and Canton, could allow Qantas to accelerate its exposure to the rapidly growing Chinese market.

Business Times - 19 Nov 2004

Virgin Blue seeks to expand overseas

(HONG KONG) Virgin Blue Holdings Ltd, Australia's second-biggest airline, is seeking to expand overseas as growth slows in its domestic market, where it plans to add just two aircraft this year, chief executive Brett Godfrey said.

'Growth is not just going to be harder to come by, but there's less opportunities to stimulate markets in the Australia-New Zealand region and so we will be looking at what else we can do,' Mr Godfrey said in a televised interview.

Virgin Blue, whose fleet expanded to 45 planes from two in its first 4 1/4 years, on Wednesday said first-half net income declined 1.8 per cent, partly because of increased competition from Qantas Airways Ltd. Mr Godfrey this year started flights to New Zealand and Fiji, and is in talks with Air Macau and Hong Kong-based Shun Tak Holdings Ltd to start a joint venture airline.

An announcement on the new airline is expected within weeks after China allowed Air Macau to increase its number of flights to the mainland by 90 per cent, the South China Morning Post reported yesterday, citing unidentified Macau officials. Qantas is setting up a Singapore-based discount carrier, to start flying next month, with a S$50 million investment.

Qantas will own 49.9 per cent of Jetstar Asia. Singapore investment company Temasek Holdings owns 19 per cent, and Singapore businessmen Tony Chew has 21.1 per cent and Wong Fong Fui 10 per cent.

Virgin Blue's domestic fleet flies 47 routes to 21 destinations. Larger rival Qantas has said it will seek to stop Virgin Blue taking more than the 35 per cent share of Australia's domestic air travel market it already has.

Mr Godfrey said there are opportunities to expand Virgin Blue's domestic business. 'I still believe we can grow greater than CPI or GDP,' Mr Godfrey said. 'There are some markets that can be stimulated.'

Virgin Blue plans to encourage more Australians to travel by air by lowering fares on some routes. Fares for business travellers and those travelling in peak times will rise to help the airline cover rising fuel costs, Mr Godfrey said. - Bloomberg

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Valuair serves up Aussie-style barbecue to promote Perth flights
SINGAPORE : Over a thousand participants had an alfresco meal at the Padang this weekend for a barbecue organised by no-frills airline, Valuair.

Serving up Aussie fare -- and we're not just talking about air-ticket giveaways and contests, but also 2,000 sausages, 1,500 steak fillets and plenty of booze and wine from Down Under.

It is all part of a ValuAir's blitz to get Singaporeans acquainted with the great Australian outdoors, as the airline starts flying to Perth next month.

For S$15, two persons could have a barbecue platter and a drink.

"The meat is lovely -- it's really well cooked; the beer is tasty, and it feels like an Australian barbecue here in Singapore. It's fantastic."

Even Australians are being targeted by Valuair.

Valuair CEO Sim Kay Wee said, "Australians who are normally taking a day off to fly off to Sydney and all that are now coming to Singapore. And we're now selling Singapore, as well Singapore plus Bangkok, Singapore plus Hong Kong for the Aussies."

And if the Singapore-Perth route takes off, travelling to other Australian cities could be cheaper too.

Said Australian High Commissioner Gary Quinlan, "There are other cities obviously which would want to benefit out of that opportunity. And once they see the numbers of tourists moving in both directions, I think the market will take care of that."

Sunday November 21, 12:35 PM
Expanding Emirates denies unfair advantage
ABC

The Dubai-based airline, Emirates Air, has rejected suggestions it holds an unfair advantage over other airlines, including Qantas.

Emirates Air is planning to double its flights by next October but says it never aims to carry traffic at the expense of any other airlines.

Emirates president Maurice Flanagan has told Channel Nine that the airline is not unfairly advantaged in Australia because of its ownership by the Government of Dubai.

"We were given $10 million to start the airline in '85 and told don't come back for any more," he said.

"Well, some more was put in, the shell of our training college was put in but all the expensive gear inside that simulates and so forth we put in, very little else."

Mr Flanagan also says the airline has been just as affected as any other airline by the surging price of oil.

Jet fuel prices have climbed above US$60 a barrel.

Mr Flanagan says being based in the oil-rich Middle East is no advantage.

"Well why should we?" he said.

"I mean there's very little oil produced in Dubai and it's got no refinery anyway so where do we get it from?

"We get our oil, we buy our oil from the oil companies like everybody else does."

Australia airline over-capacity to stay-Patrick

SYDNEY, Nov 21 (Reuters) - Airline capacity in Australia exceeds demand at current prices and there is no quick fix for the industry, the head of Patrick Corp. Ltd., a major share holder in budget airline Virgin Blue , said on Sunday.

"Clearly there is far stronger competition in there," Patrick Corp's , chief executive Chris Corrigan said on ABC television's Inside Business programme.

"We've got to levels where capacity probably exceeds the demand at current price levels. That's led to a softening in yields," he said.

British billionaire Richard Branson's Virgin Blue airline, 46 percent owned by Corrigan's Patrick Corp, last Wednesday announced a 2 percent fall in net profits to A$63 million ($49 million) for the six months to September 30 because of higher fuel costs and tough competition.

The new entrant to the Australian market has captured a third of the domestic market from its main competitor, Qantas Airways Ltd. . Qantas has fought back by launching its own no-frills carrier, Jetstar.

Patrick Corp., Australia's largest operator of container terminals, on Thursday announced a 25 percent rise in its own results for the year to September 30, before one-offs, to A$190.3 million.

Corrigan said Virgin was studying "18 different things", including the probable introduction of a new route from Sydney to Los Angeles.

"We'll wait to see that the outcome of that research is," he said, declining further details. ($1=A$1.28)

22 November 2004

Perth Airport taxis on to profit runway

CATHY BOLT

Westralia Airports Corporation, operator of Perth Airport, has signalled it expects strong profit growth into the future as continued robust growth in aviation activity coincides with further development of its vast land estate around the airport.

WAC chief executive Graham Muir said the company had now developed more than 120 hectares of the 700ha it had available for non-aviation commercial use via a mix of capital leases, standard site leases and its own property developments.

The capital leases - which match WAC's 50-year lease plus 49-year option on the airport precinct - include the $80 million, 65,000sqm Woolworths Regional Distribution Centre near the international terminal, which became operational last week.

Mr Muir also disclosed its property development division, which has been rebranded Kwest, expected to announce another major capital lease within a month, one likely to draw some attention because of its size and profile.

"If we can market (the area) properly and we are competitive, over time you would think we would develop most of it," he said.

WAC recently reported a $2.34 million profit for 2003-04, its first since it bought the airport in 1997 as part of the federal airport privatisation program.

The maiden profit was a welcome milestone for the company, which is 75 per cent owned by investment funds controlled by Mike Fitzpatrick's Hastings Funds Management.

The past seven years have included criticism its $639 million bid for the airport was too high, along with a series of crises which stunted airline traffic, including the collapse of Ansett, the September 11 terrorist attacks, the Bali bombing and the SARS outbreak in Asia.

But Mr Muir said it was now "a good time to be involved in airports" with passenger numbers through Perth in October at a record 600,000, more than 10 per cent higher than a year ago.

Extra services and higher capacity aircraft had recently been added to schedules or were about to start, including a daily service to Singapore from December 1 by budget airline Valuair and a service to Bali by Qantas' new budget carrier, Australian Airlines, from December 2. Talks were also underway with Chinese and Indian airlines.

Mr Muir said WAC's enterprise value was now about $1 billion and he expected the improvement in its financial performance would be sustained.

"We anticipate we will achieve ongoing strong profit growth, given the airport costs are largely fixed," he said. "Perth airport has substantial capacity to grow with only incremental capital investment required to meet that demand. The runway system at the moment is operating at around 85,000 movements per annum, and we estimate the capacity to be in excess of 200,000."

Mr Muir said it would seriously look at an investment in a $20 million to $30 million multi-storey carpark at the domestic terminals in a year or two, although it was likely the fees would have to rise a little to ensure it delivered an adequate return.

WAC is in the midst of a higher than normal $50 million capital expenditure program this financial year which includes a $25 million expansion of check-in and baggage handling facilities at the international terminal.

It also includes a soon to start upgrade on its secondary runway, another 22 per cent increase in parking capacity at the domestic terminal, which should be finished in the next couple of months, and an impending refurbishment of the domestic terminal which houses Virgin Blue and Skywest.

Perth Airport taxis on to profit runway
Westralia Airports Corporation, operator of Perth Airport, has signalled it expects strong profit growth into the future as continued robust growth in aviation activity coincides with further development of its vast land estate around the airport.

WAC chief executive Graham Muir said the company had now developed more than 120 hectares of the 700ha it had available for non-aviation commercial use via a mix of capital leases, standard site leases and its own property developments.

The capital leases - which match WAC's 50-year lease plus 49-year option on the airport precinct - include the $80 million, 65,000sqm Woolworths Regional Distribution Centre near the international terminal, which became operational last week.

Mr Muir also disclosed its property development division, which has been rebranded Kwest, expected to announce another major capital lease within a month, one likely to draw some attention because of its size and profile.

"If we can market (the area) properly and we are competitive, over time you would think we would develop most of it," he said.

WAC recently reported a $2.34 million profit for 2003-04, its first since it bought the airport in 1997 as part of the federal airport privatisation program.

The maiden profit was a welcome milestone for the company, which is 75 per cent owned by investment funds controlled by Mike Fitzpatrick's Hastings Funds Management.

The past seven years have included criticism its $639 million bid for the airport was too high, along with a series of crises which stunted airline traffic, including the collapse of Ansett, the September 11 terrorist attacks, the Bali bombing and the SARS outbreak in Asia.

But Mr Muir said it was now "a good time to be involved in airports" with passenger numbers through Perth in October at a record 600,000, more than 10 per cent higher than a year ago.

Extra services and higher capacity aircraft had recently been added to schedules or were about to start, including a daily service to Singapore from December 1 by budget airline Valuair and a service to Bali by Qantas' new budget carrier, Australian Airlines, from December 2. Talks were also underway with Chinese and Indian airlines.

Mr Muir said WAC's enterprise value was now about $1 billion and he expected the improvement in its financial performance would be sustained.

"We anticipate we will achieve ongoing strong profit growth, given the airport costs are largely fixed," he said. "Perth airport has substantial capacity to grow with only incremental capital investment required to meet that demand. The runway system at the moment is operating at around 85,000 movements per annum, and we estimate the capacity to be in excess of 200,000."

Mr Muir said it would seriously look at an investment in a $20 million to $30 million multi-storey carpark at the domestic terminals in a year or two, although it was likely the fees would have to rise a little to ensure it delivered an adequate return.

WAC is in the midst of a higher than normal $50 million capital expenditure program this financial year which includes a $25 million expansion of check-in and baggage handling facilities at the international terminal.

It also includes a soon to start upgrade on its secondary runway, another 22 per cent increase in parking capacity at the domestic terminal, which should be finished in the next couple of months, and an impending refurbishment of the domestic terminal which houses Virgin Blue and Skywest.
http://www.thewest.com.au/20041122/business/tw-business-home-sto129864.html

shit read thread first lol sorry guys

shit read thread first lol sorry guys
Hahaah...for once I found an article earlier then you? Not always there is one on Perth, but there you go. :D

Virgin Blue Wants Australian Govt to Curb Airport Charges

SYDNEY, Nov 23 Asia Pulse - Low cost carrier Virgin Blue (ASX:VBA) today asked the federal government to review the system put in place three years ago to regulate airport charges in Australia.

Virgin Blue chief executive officer Brett Godfrey said the company had written to the government asking it to intervene and review the processes which put the airports outside government regulation, subject to them acting reasonably.

Mr Godfrey said it was now costing the company US$150 million (US$117 million) more to use Australian airports than it was in 2001 and 15.1 per cent of the airline's costs currently attributed to airports, compared with five per cent three years ago.

"We sent a letter to (Federal Transport Minister) John Anderson this morning, requesting him to review airport pricing," Mr Godfrey told reporters in Sydney.

"We don't want them to absolve themselves from any review, all we want to know is 'what is the definition of a reasonable price increase?'.

"If reasonable is 80 to 110 per cent, I will fall off my perch."

Mr Godfrey said Virgin Blue had "happily concluded" commercial deals with several key airports, including Melbourne and Brisbane.

"But where we can't negotiate fair agreements ... we are saying if they are not prepared to negotiate and give us a fair long term deal then we have no other course of action except to pursue what we can through legal mechanisms and through the government," Mr Godfrey said.

"The government has as much power as the courts to do something about this."

Mr Godfrey said Virgin Blue was due to meet with the federal government "in the next couple of weeks".

"We are catching up with them shortly and I just wanted to pre-empt on what I thought should be on the agenda, and that is the top of the list."

Virgin Blue is currently applying in court to have airports brought back within the fold of the Australian Competition and Consumer Commission reviewing processes.

ASIA PULSE

Virgin Blue Posts 29% Jump in Oct Passenger Numbers

BRISBANE, Nov 30 Asia Pulse - Virgin Blue Holdings Ltd (ASX:VBA) today reported passenger numbers were up 29 per cent in October compared to the same month last year.

The discount carrier's preliminary operating statistics for October found Virgin Blue carried 1,166,757 passengers in October compared to 904,532 last year.

It also found traffic, measured by Revenue Passenger Kilometres (RPKs), increased by 32.5 per cent in the same period.

Capacity, measured by Available Seat Kilometres (ASKs) also increased by 38.3 per cent.

Revenue load factor decreased by 3.6 points to 80.1 per cent compared to the previous year.

The carrier's on time performance in October stood at 82 per cent of flights leaving within 15 minutes of scheduled departure time.

In a statement the company said for the seven months to October 2004 passenger numbers increased by 37.1 per cent from the previous year.

RPKs jumped 42.2 per cent, while ASKs increased by 54.5 per cent over the same period.

Revenue load factor decreased by 6.7 points to 77.3 per cent compared to the previous year.

On time performance stood at 87 per cent.

Australian plans to fly Perth-Bali
December 03, 2004
AUSTRALIAN Airlines is looking to take advantage of an upsurge in tourism to Bali to support direct flights from Perth to the holiday island two years after the terror attacks that devastated the tourist trade.

Counting on a continuing love affair between West Australians and Bali, chief executive Andrea Staines said the Qantas subsidiary was confident the market could sustain twice-weekly flights.

"The market has definitely returned to travelling internationally in general and definitely to Bali," Ms Staines said.

"Australians have got over the jitters ... we have a resilient culture and people are determined to live their lives the way they want."

Using its all-economy class Boeing 767-300s, Australian Airlines will offer a total of 542 seats each week from Perth to Bali - almost doubling the number of seats offered by the Qantas group on the route.

"It's competitive but Bali is a strong market and we're looking forward to participating," Ms Staines said.

"We're not looking to start a price war. We're entering the market with the current market pricing, which today is very competitive and offers great package prices for whatever budget."

The Bali route is the first service to be offered from Perth and will see Australian expand its operations between Australia and Bali to seven flights each week.

The new route would also ensure the airline had a national presence with travel agencies.

Ms Staines said the Thursday and Saturday flights were conveniently timed with afternoon departures from, and arrivals into, Perth.

"You will land in Bali able to access your hotel room and when you come home will have a half-day at your hotel before you head to the airport," she said.

Qantas will continue flying one flight a week from Perth until February 1 to cope with summer demand.

The new Perth-based service brings Australian Airlines' total operations to more than 100 flights per week to 14 destinations in six countries.

Ms Staines said that although Australian was all-economy, it offered full service to passengers.

"We are not no-frills. We offer all the frills passengers expect from a full-service airline, including complimentary meals and snacks, Australian wines, spirits and beer as well as in-flight duty-free shopping.

"Being a leisure airline, we want you to feel like you are on holidays from the moment you step on board, so we offer the latest in-flight movies, an in-flight magazine and audio programs."

The decision to enter the Perth market against Garuda Indonesia and Air Paradise was well researched by Qantas.

"We're now flying Sydney-Bali and Melbourne-Bali - we started that 18 months ago and we've seen a resurgence of Australians travelling to Bali. I'm sure that in Perth we'll see the same," Ms Staines said.

"The Qantas group is working on this in a co-ordinated manner."

Flight into rebel territory could land pilots in jail
Mark Forbes in Port Moresby
7 December 2004
The Sydney Morning Herald

Two Australian pilots face possible imprisonment, and their Queensland employer substantial fines, after being convicted of making an illegal and dangerous flight into territory controlled by the remnants of the Bougainville Revolutionary Army.

Tasman Airlines' $3million executive jet also remains impounded by Papua New Guinean authorities following the mysterious trip into the "no-go zone" around the once-rich Panguna mine at the invitation of the rebel leader Francis Ona.

Two passengers on the late-September flight, James Nessbit, a British businessman, and Jeff Richards, a Queenslander, are believed to still be on Bougainville.

The minister for Bougainville, Sir Peter Barter, said the flight was a potential threat to national security as it could undermine a fragile peace on the island.

About 18 Australian police are patrolling Bougainville under the Enhanced Co-operation Program, but are unable to venture into the no-go zone, which is guarded by heavily armed militants.

At a court hearing yesterday pilot Peter McGee and co-pilot Andrew Reid - who is also the airline's owner - were found guilty of undertaking a dangerous activity involving an aircraft and operating an aircraft in a careless manner.

The two men face up to two years in jail and fines of more than $20,000 each.

Tasman Airlines faces a penalty of up to $100,000 and the loss of its Cessna Citation jet.

Magistrate Ivo Cappo adjourned the hearing to consider sentencing applications on Friday.

He attacked the defendants for saying they had permission to fly into the region from the self-proclaimed royal government of Mekamui, where Mr Ona has proclaimed himself king.

"Bougainville is part of PNG and there is only one legitimate government here," Mr Cappo said. "This is not a legitimate authority and this amounts to an unapproved landing."

Mr Cappo said the plane deviated from its flight plan from Cairns to Buka Island to land at the decommissioned Aropa airport, on the edge of the no-go zone. In an affidavit, Reid said he wanted to inspect sites for three possible medical centres to be constructed by a US-based charity.

Prosecutors alleged that Reid, when interviewed by an Australian police officer on Bougainville, made dishonest and misleading statements about landing at Aropa and his reasons for doing so.

Skywest eyes Asian link
The future of airline services in regional WA now lies in the hands of a Singaporean company that has its eye on Asian destinations but needs to build some bridges in WA after one of the most bruising takeover fights in recent memory.

After eight months of bitter wrangling and recriminations, the Singapore-based CaptiveVision Capital this week obtained control of Skywest and its WA-raised chief executive Jeff Chatfield has even reached an agreement with the Skywest incumbent board for an orderly handover of power.

Word from both the incumbent Skywest camp and CaptiveVision Capital is that they are trying to ensure a smooth transition.

"We're not pursuing a scorched earth policy, we have worked too hard to build this airline up again," said one Skywest supporter instrumental in rescuing the regional operation from the wreckage of Ansett three years ago.

Yet there is concern in regional WA in light of Skywest changing hands again and falling under control of a Singapore-based company with eyes on expanding the regional operation into overseas destinations, such as Singapore and China.

The importance of airline services to regional WA was highlighted when Skywest was enmeshed in the collapse of Ansett in September 2001 and flights were suspended. One observer described Skywest's fall into administration as a "near-death experience for regional WA".

Esperance Shire president Ian Mickel said the regional airline was not a luxury. "It is really our linkage with the social and commercial heart of WA," he said.

With a new board coming into Skywest and the group under new control, new relationships would have to be built. "There is some anxiety but we look forward to having the same strong relationship in the past," he said.

In the heat of the takeover fight in June, a company headed by West Perth accountant Geoff Hick built a blocking stake in the airline.

Mr Hick said at the time he was representing a syndicate of business people from regional centres and with interests in regional development who wanted to preserve Skywest but he has refused to identify the mystery regional backers.

But less than a fortnight after Skywest's November 23 listing on the stock exchange to a lukewarm reception from the market and then a wave of selling through broker Patersons Securities, the Hick-led syndicate sold into the CVC takeover bid.

Mr Hick said members of his syndicate wanted to support the WA airline through to its float and they had hoped the airline's brokers would be able to attract institutional and stockbroker support after it hit the market. Skywest's disappointing performance had ensured CVC's success.

"We hope they will continue to act in the interests of regional WA," Mr Hick said. "We have our doubts."

The words in CVC's takeover documents should soothe patrons of Skywest, phrases such as continue the business of Skywest, preserve the operational management, continue with the air operations of the airline and support and enhance the aviation industry of WA.

But some of CVC's actions during the bid hardly covered it in glory, with it copping a pasting in the Takeovers Panel after Skywest cried foul about information sent to it by Skywest's chief information officer Craig Lovelady, a former director of CVC and a mate of Mr Chatfield's going back to their days at Hale School.

The panel found the suitor had breached takeover rules, misled the airline's shareholders and was "clearly and knowingly" in possession of sensitive financial information from Mr Lovelady. It described discussions between Mr Lovelady and CVC as "extremely unusual and aspects of it were inappropriate".

The panel said it would consider referring aspects of the saga to the Australian Securities & Investments Commission, which was also to be sent information about the conduct of CVC's adviser Stefan Saw over apparent breaches of the Corporations Act relating to phone calls to shareholders during takeovers.

It is believed ASIC is now investigating the leaked information affair, a probe that should stand or fall regardless of who is calling the shots at Skywest.

CVC has obtained, for less than $15 million, control of an airline group that has just one of six high capacity air operators certificates - accreditation that can costs millions of dollars and several years to build and which can be relatively easily upgraded to cover the larger aircraft used on overseas routes.

The future of Skywest now looks to be tied to the backers of CVC, with the Singapore-listed company aircraft sales and leaseback group A-Sonic Aerospace looking at establishing business collaboration arrangements with Skywest in maintenance, engineering and supply of aircraft systems.

CVC said in a supplementary bidder's statement released in September that the suitor would work closely with A-Sonic and another CVC backer China Xpress to "determine how best these parties may be able to assist and develop Skywest and its business".

"Such assistance could include further developing Skywest's charter and freight operations and providing regional routes throughout Asia and Australia," CVC said.

Mr Chatfield was this week reluctant to discuss future developments at Skywest pending the official handing over of power, but said he wanted to assure the travelling public that there were no "changes to any services or the scope of the business of the airline at this stage".

"The whole foreign bidder bit has been overplayed," Mr Chatfield said.

Mr Chatfield said yesterday he could not discuss the board composition before a public statement was made by the Skywest board, except to say the incumbents were in caretaker mode.

Skywest managing director Scott Henderson, who played a key role in mounting a bruising takeover defence, would not discuss his own future. "If there is a change, I will advise the market," he said.

"No one wants to do anything damaging at this point in time, no one wants to see it damaged."

Wednesday December 8, 4:50 PM
Branson launches Virgin Atlantic flights in Australia

AP - In a flurry of publicity Agimmicks that have become his trademark, British entrepreneur Richard Branson launched the first Virgin Atlantic flights from London to Sydney Wednesday, vowing to break the hold British Airways and Qantas Airways Ltd. have on the long-distance route.

Branson, chairman of Virgin Atlantic, disembarked from the inaugural flight from London, balancing on the aircraft's wing carrying a surfboard and flanked by models in bikinis. He later posed with a cardboard cutout of Geoff Dixon, poking fun at an earlier declaration by the Qantas chief executive officer that Virgin would never fly to Australia.

So far the airline's bookings for the Sydney-London flight with the stopover in Hong Kong were very good, Branson told reporters.

"January and February (bookings) look extremely good," Branson said, but added that the airline wouldn't post a profit for at least three years.

Branson said he wanted to break the "cozy duopoly" Qantas and British Airways have maintained for years in Australia. His company has already filed a complaint with the Australian competition watchdog, accusing the two airlines of colluding to set prices and hurting competition.

"They have 75 percent of the business class market. They are allowed to collude on fares. They are allowed to sit in dark rooms and work out how they can take the passenger for a ride. Imagine Coca Cola and Pepsi working together like that," Branson said.

He said the Australian Competition and Consumer Commission would rule on the London-based Virgin Atlantic's appeal next week.

Branson, who owns 25 percent of Virgin Atlantic, also said he had no plans to sell his 25 percent stake in Australian domestic budget carrier Virgin Blue Holdings Ltd.

Separately, Branson said the U.S. offshoot Virgin USA would start services "sometime" next year, but declined to give further details.

http://us.news2.yimg.com/us.yimg.com/p/ap/20041208/capt.syd10112081651.australia_virgin_atlantic_syd101.jpg
British entrepreneur Richard Branson, center, holds a surfboard as he stands on the wing of his Virgin Atlantic Airways plane with models after touching down on its inaugural flight into Australia at Sydney Airport, Wednesday, Dec. 8, 2004. Atlantic chairman Branson hopes to have up to 300,000 passengers a year flying on the new London-to-Sydney service. (AP Photo/Mark Baker)

http://us.news1.yimg.com/us.yimg.com/p/rids/20041208/i/r2776165397.jpg
British entrepreneur Richard Branson (L) holds a surfboard while Aboriginal dancers perform, after disembarking from his Virgin Atlantic plane in Sydney,
December 8, 2004. Branson is in Sydney to promote Virgin Atlantic's new arrangement for passengers travelling from Hong Kong to Sydney. Virgin
passenegers can now fly from London to Australia, where Branson also part-owns low cost domestic carrier Virgin Blue. REUTERS/David Gray

http://us.news2.yimg.com/us.yimg.com/p/ap/20041207/capt.hkg10212071542.hong_kong_virgin_hkg102.jpg
Virgin Chairman Richard Branson, flanked by Virgin Atlantic Airways flight attendants, holds up a Chinese hat as he poses on a sampan in Hong Kong, Tuesday, Dec. 7, 2004. Branson, who is visiting Hong Kong to launch Virgin Atlantic's new daily service between London and Sydney through Hong Kong, told reporters that his British conglomerate Virgin Group Ltd. is holding talks with a mainland Chinese telecommunications company to set up a joint venture to provide mobile services in China. (AP Photo/Anat Givon)

http://us.news1.yimg.com/us.yimg.com/p/rids/20041207/i/r1846758300.jpg

http://us.news1.yimg.com/us.yimg.com/p/rids/20041207/i/r1424453298.jpg

http://us.news1.yimg.com/us.yimg.com/p/rids/20041207/i/r3151465231.jpg
Richard Branson, chairman of Virgin Atlantic Airways, tours the city by tram in Hong Kong December 7, 2004. Branson is in Hong Kong to promote the daily non-stop scheduled Airbus 340-600 flight services between Hong Kong and Sydney. REUTERS/Kin Cheung

http://us.news1.yimg.com/us.yimg.com/p/rids/20041207/i/r3715583916.jpg
Richard Branson, Chairman of Virgin Atlantic Airways, poses with children in Hong Kong December 7, 2004. Branson is in Hong Kong to promote the daily non-stop scheduled Airbus 340-600 flight services between Hong Kong and Sydney. REUTERS/Kin Cheung

Fasten seatbelts for aviation shake-up
Steve Lewis, Chief political reporter
17 December 2004
The Australian

CONTROL of take-offs and landings at major airports including Sydney, Brisbane and Melbourne could be privatised under a radical aviation shake-up.

The Howard Government will also consider selling essential airport emergency rescue and fire services to private operators to introduce more competition.

The shake-up proposal came as Deputy Prime Minister John Anderson announced a far-reaching review of Airservices Australia.

This will consider whether the agency should be corporatised, although privatisation has been ruled out.

It will also examine whether significant elements of Airservice's operations could be better handled by the private sector or other international operators.

While the agency will retain its monopoly on guiding aircraft between domestic airports and on international routes, Canberra is keen to inject more competition into the industry.

The Government has already announced plans to strip all regulatory functions from the agency, which earns around $600million a year.

Australia would be one of the first countries to privatise its air traffic services. Britain partially privatised its national air traffic control services in 1998, earning valuable revenue for the Government but provoking cries from unions that it was "playing politics with air safety".

The Government has unsuccessfully tried to overhaul air traffic services in the past but was rebuffed by the Senate. But its ability to pass legislation largely unchallenged after July 2005 means a shake-up is inevitable.

Mr Anderson said the reforms were designed to "improve the responsiveness of Airservices Australia to the needs of the aviation industry and the challenges facing aviation".

But Labor last night suggested the Government was more interested in trying to cover up its decision to amend its national airspace reforms.

"The Deputy Prime Minister refuses to take responsibility for the failure of the National Airspace System, illustrated by its rollback last month," the Opposition's industry spokesman Stephen Smith said.

"He appears to be making Airservices Australia the scapegoat for this public policy fiasco."

Mr Smith called on the Government to allow an open and public review rather than the "closed departmental exercise" announced by Mr Anderson.

Mr Anderson also unveiled a new-look board for Airservices, including rural businessman Nick Burton Taylor as its new chairman. Mr Burton Taylor is chairman of the Australian Agricultural Company, which controls vast rural properties, and has also served as director of the Sydney Airport Corporation, Hazelton Airlines and the Federal Airports Corporation.

Speaking to The Australian, Mr Burton Taylor said he was positive about the organisation's future, describing its services as "professional and leading-edge".

New Zealand, Australia seek to boost air security

AUCKLAND, Dec 19 (AFP) - New Zealand and Australia signed Sunday a new information-exchange agreement designed to strengthen the security of air travel.

The agreement was signed by New Zealand Foreign Minister Phil Goff and his Australian counterpart Alexander Downer at the end of their regular six-monthly talks.

It sets out a framework for the exchange of information on passports and visas issued by the two countries, to improve the screening of incoming passengers.

"This arrangement gives New Zealand and Australia a level of cooperation on border security that is as advanced as any in the world," the ministers said in a joint statement.

"The sharing of information will allow us to improve the advance passenger processing systems that we already both have. This system allows the screening of passengers and their travel documents when they check-in overseas for flights to New Zealand and Australia."

The minister said the agreement would also allow more opportunity to pick up on the attempted use of lost, stolen and otherwise invalid travel documents.

Posted: 19 December 2004 1322 hrs

Hijack "joke" sparks international security alert on flight from Australia

CANBERRA : An Italian tourist aboard a Lauda Austrian Airlines flight from Sydney to Vienna sparked a major security alert when he text messaged his wife to tell her his plane had been hijacked by Islamic extremists.

A spokesman for Transport Minister John Anderson said the man sent the message to his wife as a joke after taking off on the flight from Sydney last Sunday.

The man, reported to be Antonio Casale, 35, claimed terrorists were in control of the aircraft and were taking the passengers to an unknown destination.

His distressed wife contacted Italian police, who immediately contacted the Italian embassy in Canberra, who in turn contacted Australian Federal Police, fearing a September 11 style attack.

Anderson's spokesman said authorities were able to quickly work out the identity of the man and discover the message was a hoax.

The captain was reportedly contacted in mid-flight by counter-terrorism negotiators, who found him oblivious to any hijacking attempt.

"The Italian police picked up on it, then the Italian embassy, the Australian Federal Police came in on it and it was quite a big operation," the spokesman added.

He said while the joke had been stupid, the incident had proved authorities were able to quickly deal with terrorist threats.

"This is effectively a text book operation from start to finish by our authorities," the spokesman said.

The Sunday Telegraph reported that Casale was taken aside by the captain and detained by police when the jet landed in Vienna. He was questioned by police and later released without charge.

- AFP

Jetstar aims for top in budget war
By Scott Rochfort, Sydney Morning Herald
December 20, 2004

Fourteen months after Qantas handed him the task of stemming Virgin Blue's burgeoning share of the domestic aviation market, Jetstar chief executive Alan Joyce says his airline will soon claim the crown as Australia's lowest-cost carrier.

With Jetstar poised to take delivery of its sixth Airbus 320 this week, Mr Joyce told the Herald the airline was on track to deliver its first profit as well as meet targets set by Qantas chief executive Geoff Dixon in December last year.

Mr Joyce said Jetstar had so far only chewed up $22 million of the $100 million originally set aside for its start-up. Of that, $15 million has been spent on advertising.

Where British Airways, KLM, Continental, Delta and Air Canada had failed in setting up low-cost subsidiaries before it, Mr Joyce reckons Qantas and Jetstar's success has been due to its drive to undermine Virgin Blue's cost base.

"If you go into it with these high cost levels you are going to run into trouble," he said.

Despite the rise in fuel costs, Mr Joyce said Jetstar was already well below the cost base of 8.25c per ASK (available seat kilometre) it set itself a year ago. He said Jetstar could even beat the 7.6c per ASK target set for when it has a sole model fleet of 23 Airbus 320s by mid-2006.

"We're going to beat that. Once we start bringing the A320s in that's our efficiency kick," Mr Joyce said. Last month Virgin Blue chief executive Brett Godfrey reported his airline had managed to cut its cost base by 17 per cent to 7.26c per ASK, or 12 per cent lower than Jetstar's.

But Mr Joyce contends Virgin's lower costs were helped by its average sector length being 20 per cent longer than Jetstar's. Jetstar believes this gap will close when it embarks on longer flights, such as its launch of services between Brisbane and Launceston today, expansion to Adelaide in February and a possible move to Perth later in the year.

With Jetstar's move to Perth largely predicated on the airline winning a contract to operate aircraft on behalf of QantasLink, Mr Joyce denied his airline was part of a wider Qantas play aimed at undermining its heavily unionised workforce.

Despite Qantas's sustainable future program aiming to cut $1.5 billion of costs over three years, with about 30 per cent coming from boosting labour "productivity", Mr Joyce said: "Most of the benefits that we've got are related to the fundamental ways the airline is operated.

"So, I'm not sure how people claim that this is a labour play."

As well as Jetstar's strong emphasis on turning around planes quickly - allowing it to use its aircraft more efficiently and with less fuel burned - Mr Joyce said Jetstar had managed to save costs by not using standby aircraft.

By building an airline out of the shell of the former Impulse Airlines that Qantas acquired in 2001, Mr Joyce also noted Jetstar's streamlined workforce at its Melbourne headquarters and the fact that is has far fewer full-time employees per airline than Qantas.

Jetstar noted it had "a bit over" 1000 employees for its fleet of 14 115-seat Boeing 717s and six 177-seat A320s. This compares to Virgin's 3582 employees at the end of November for its fleet of 50 177-seat and 180-seat Boeing 737s.

Mr Joyce reckons the advantages for Jetstar will increase as it builds its fleet.

But Mr Godfrey said he was sceptical of Mr Joyce's comments on becoming the cheapest run airline. "If he still believes in Santa he has a chance," he said.

Qantas wins union support for international crew base
Mark Skulley
21 December 2004
Australian Financial Review

Qantas has sealed a new enterprise agreement with its long-haul flight attendants, averting the threat of strike action over Christmas.

The Flight Attendants Association of Australia said about 72 per cent of nearly 4,000 eligible workers had voted on the deal, with 88 per cent in favour.

The secretary of the FAAA's international division, Michael Mijatov, said yesterday there was some lingering opposition over the plan to use international crew. "But we asked them [long-haul attendants] to look at the whole agreement and they've accepted this," he said .

The three-year agreement includes the standard Qantas pay offer of 3 per cent per year.

The airline is looking to save about $18 million a year by establishing a Qantas crew base in London for 400 international flight attendants.

Under the agreement, it will cap the number of international overseas-based flight attendants at 870, with about 370 such crew now based in Bangkok and Auckland.

Australia-based flight attendants will continue to have access to one flight per day to London.

About 400 members of the National Union of Workers, employed by Qantas in areas such as freight and catering, last week rejected a new enterprise agreement, even though a small number of Brisbane-based NUW workers endorsed a separate but similar agreement.

A NUW spokeswoman said the union was confident that agreement could still be reached.

The airline has also reached in-principle agreement with the Australian Services Union on a new three-year enterprise agreement offering 3 per cent a year.

OneWorld a hop away with e-ticket
Steve Creedy
21 December 2004
The Australian

QANTAS passengers can now use one e-ticket on all seven of the flying kangaroo's OneWorld alliance partners.

The airline finalised links last week with Cathay Pacific, allowing it to offer e-tickets to almost 600 destinations in the OneWorld network.

Other partners include Ireland's Aer Lingus, American Airlines, British Airways, Finnair, Spain's Iberia and Chile's LAN.

The International Air Transport Association has identified a move to e-tickets as a major cost-saving for airlines, estimating it will save the industry $US3 billion ($4 billion) worldwide.

The Australian carrier also praised the benefits to travellers of e-tickets, saying they could not be lost or stolen, they made check-in faster and it was easier to change bookings.

"It is an important achievement for Qantas and the OneWorld alliance," said Qantas head of sales and distribution Rob Gurney.

Qantas had also signed an $18 million deal with international electronic and systems group Thales to upgrade seven full-flight simulators.

Thales will upgrade two Boeing 747-400 simulators to the highest internationally recognised level of flight simulation.

A Boeing 767-300 machine will be upgraded to the same architecture as three recently delivered machines.

The six simulators and a third-party 747-400 facility will also have a state-of-the-art visual system fitted, a spokesman said.

Sydney Airport, Virgin Blue Enjoy Rise in Nov Passenger Traffic

SYDNEY, Dec 21 Asia Pulse - Total passenger traffic at Sydney Airport hit a record high in November, as airline capacity increased and more Australians headed overseas.

Airport manager Macquarie Airports Management Ltd said total traffic rose by 4.8 per cent compared to November 2003, when passengers numbers were boosted by the Rugby World Cup and the Jehovahs Witness World Congress.

"November was a record month for Sydney Airport in terms of both international and domestic passenger numbers with total traffic increasing," said Macquarie Airports chief executive Kerrie Mather.

Traffic was rose to 2.37 million, from 2.25 million in November 2003.

Some 1.57 million domestic passengers passed through the airport, a gain of 5.3 per cent on the same period last year.

International passenger numbers were up 3.7 per cent to 762,000.

"Australians travelling overseas in November continued to grow strongly ... primarily driven by the strong Australian dollar," Ms Mather said.

On a moving annual total basis, passenger numbers were up 11.4 per cent to 27.43 million.

Macquarie Airports, which owns 56 per cent of Sydney Airport, also holds owns 34 per cent of Aeroporti di Roma Airport in Italy and 31 per cent of Bristol and 15 per cent of Birmingham airports in the UK.

It said airport expansion had lifted total passenger traffic at Aeroporti di Roma Airport by five per cent to 2.34 million in November compared to the same month last year, while traffic at Bristol climbed 18.8 per cent to 312,000.

But Birmingham recorded a 9.5 per cent fall to 531,000 as both domestic and international passenger numbers dropped off.

Meanwhile, Virgin Blue Holdings Ltd (ASX:VBA) said the number of passengers it carried rose by 14.9 per cent in November over the same month last year.

Actual passenger traffic, as measured by revenue passenger kilometres, gained 18.4 per cent to 1.25 million.

But Virgin Blue's revenue load factor, which measures passenger kilometres against available seats, declined 6.3 points in the month to 74.9 per cent.

The airline's on-time performance was lower.

Some 88 per cent of flights departed within 15 minutes of the scheduled departure time, down from 90 per cent in November last year.

Virgin Blue shares closed up three cents to $1.89 and Macquarie Airports securities gained five cents to $3.23.

Australia's Brisbane Airport Forecasts 20% Jump in Passengers

BRISBANE, Dec 22 Asia Pulse - More than 15 million people have used Brisbane Airport's domestic and international terminals so far this year, Brisbane Airport Corporation (BAC) said today.

BAC corporate relations manager Jim Carden said unprecedented numbers of Christmas travellers in December also look set to smash the record for the busiest month ever.

He said BAC was forecasting a 20 per cent increase in passengers through Brisbane Airport this year compared to 2003.

"More planes carrying more people to and from more places have delivered a sensational Christmas present to the Queensland tourism industry," Mr Carden said.

"Brisbane Airport has never been this busy - even the taxis are struggling to keep up with demand.

"Christmas is always busy, but this year is unprecedented.

"Indicative figures show December 2004 is likely to easily be the Airports biggest month, eclipsing the record set in July this year."

During July 2004 monthly domestic figures peaked at 1.042 million, while international travellers soared to 313,892.

Austrian Airlines Sees Growth in Australian Market

SYDNEY, Dec 23 Asia Pulse - The growing numbers of eastern European business travellers are being beckoned to Australia by Austrian Airlines, keen to ramp up its service between the two regions.

The Austria-Australia route was launched by former racing car driver Niki Lauda's Lauda Air in 1985 with one flight a week.

Lauda Air remains part of the Austrian Airlines group.

Earlier this year flights between Vienna and Australia's eastern capitals of Sydney and Melbourne went to nine services per week.

"Our first (criterion) must be to satisfy this capacity," Austrian Airlines chief executive Vagn Sorensen told AAP after the recent meeting of Star Alliance airline chief executives in Bangkok.

He said the airline's Australian traffic capacity to and from Europe was being filled at around 80 per cent.

"If it continues that way and especially if our condition is met - that is to improve the yield somehow - and we can get more business class, we can gradually improve that situation," Mr Sorensen said.

He said Austrian Airlines was open to expanding the route.

"Operating such a long route nine times a week occupies 2.5 aircraft. To step up the traffic requires another aircraft but we are willing to do it," he added.

Mr Sorensen said this was why Austrian was targeting corporate customers to make the route better known.

At this point in time only two European carriers, British Airways and Austrian Airlines, offer direct online bookings from Australia to Europe.

"Australia is a big job for us and we have increased capacity (by) 50 per cent and we have more or less the same load factors so you could not be disappointed."

He said the growth would likely come from the European end, particularly from eastern Europe where the family connections to Australia are strong and travel abroad is growing.

"I think it will come from Europe. Our market penetration is better in Australia now than in Europe," Mr Sorensen said.

"It is not big but it is rapidly growing and we are well placed to capture it and there is also a large ethnic traffic from those countries ... Vienna is well placed for that."

"All we ask for is a reciprocation of opportunities.

"We would like to have the chance to serve the travelling public between Australia and America. We think we can help grow that market.

"That's what we'd like to see.

"We also believe the less the government tries to control the product the better."

Passengers like our airports: survey
24 December 2004
The Australian

PASSENGERS rate Australia's international airport terminals highly, but the airlines are less enthusiastic, a new report shows.

The latest annual Australian Competition & Consumer Commission quality of service report on mainland capital city airports found passengers by and large ranked the facilities at very good to excellent.

Brisbane, Perth and Sydney airports were the top scorers, closely followed by Melbourne. Adelaide was ranked satisfactory to good.

"Adelaide airport's ratings were slightly lower than the other airports, but it is currently constructing new terminal facilities," ACCC commissioner John Martin said.

Brisbane was the top rated airport by airlines, at good, followed by Melbourne (satisfactory to good), then Sydney and Perth. Canberra and Darwin ranked as satisfactory.

The airlines marked down airports for lack of check-in availability, gates, ground services and management responsiveness, but ticked the boxes for runway availability and taxiways.

Passengers were less impressed with the availability of baggage trolleys and immigration waiting times than they were by baggage reclaim and check-in waiting times.

Mr Martin said that overall, Brisbane and Melbourne airports performed strongly across the range of quality of service indicators examined, while Sydney -- the nation's busiest airport -- achieved reasonable ratings.

While Brisbane was the star performer, by a nose, Australian Customs Services rated its facilities as the worst.

The ACS marked the airport down for crowding in inspection and baggage areas and said management's approach to its concerns was poor.

"The ACS noted that growing passenger numbers was leading to crowding in the customs inspection areas, and while facilities are rated as poor, the ACS acknowledged the airport operator is making some attempt to resolve the issues," the report says.

Sydney was ACS's favourite, with a "good" rating.

The report noted that the overall results for the years since the ACCC began monitoring airports were relatively stable, with no obvious trends.

The report on pricing and costs at Australia's major airports will be released in early 2005.

Posted: 30 January 2005 1739 hrs

Virgin rejects takeover bid by Patrick Group as too low

SYDNEY : British tycoon Richard Branson rejected a takeover offer by ports and rail operator Patrick Corp. Ltd. for Virgin Blue, the discount Australian airline he founded, as being too low.

Patrick Corp, which already holds 46 per cent of Virgin Blue, launched a surprise 1.90-dollars a share bid Friday for the remainder of the airline's shares, valuing it at 1.99 billion dollars (1.54 billion US).

Branson's Virgin Group said its Swiss subsidiary, investment vehicle Cricket SA, had acquired 5.1 million more Virgin Blue shares on-market on Friday at an average price of 2.04 dollars, paying 10.1 million dollars and now held a 25.1 percent stake.

"As a 25.1 per cent shareholder, it is Virgin Group's view that Virgin Blue Holdings has much greater value than that indicated in the price being offered by Patrick Corp," the Virgin Group said in a statement.

"The airline has been a remarkable success in the Australian market, building a strong reputation for outstanding customer service at a competitive price, whilst maintaining low operational costs."

Virgin Group said it continued to support Virgin Blue, its growth prospects and future expansion plans.

"I am extremely proud of the Virgin Blue business and the great team of people who have brought real competition, genuine value and friendly air travel to the Australian people," Branson said.

Patrick Corp said Friday that its off-market offer, which is being made through its wholly-owned subsidiary, Plzen Pty Ltd, represented a 13 percent premium to Virgin Blue's January 24 closing price of 1.68 dollars and "full" value for Virgin Blue shares.

Patrick chief executive Chris Corrigan said the offer was important to Patrick shareholders because it would allow the company to take a clear majority stake in Virgin Blue.

Virgin Blue shares soared 15.56 percent on Friday to close 28 cents higher at 2.08 dollars while Patrick shares were one cent higher at 6.15 dollars.

The bid came after Virgin Blue saw its share price tumble on January 19 to a low of 1.60 after it warned its net profit for the year to March 31 would be 10-15 percent down on the previous year.

- AFP

Qantas looks abroad for staff
Steve Creedy, Aviation writer
17 January 2005
The Australian

QANTAS is planning to shift more jobs and services overseas as chief executive Geoff Dixon claims the national flag carrier can no longer afford to be an "all-Australian" business.

In a blunt warning to staff and the Australian public, Mr Dixon told The Australian the airline had no choice but to source more of its people, services and products overseas in order to remain competitive.

"We can't sit here and be all-Australian," Mr Dixon said in foreshadowing renewed confrontation with unions over cost controls and job relocation.

About 94 per cent of Qantas's 35,000 staff are Australian-based, a figure the airline claims is the highest of any global international carrier.

Based on international benchmarks, Mr Dixon's determination to improve competitiveness would result in more than 7000 jobs moving overseas. He said the airline industry was changing dramatically, with competing carriers Singapore Airlines and Cathay Pacific lowering costs by consistently sourcing about 30 per cent of products and services such as engineering and in-flight services from other countries.

Mr Dixon's comments come only two months after Qantas won a battle to save more than $18million a year in hotel bills and allowances by increasing the number of its London-based flight attendants from 370 to 870.

During the dispute over relocation, Qantas was accused of training 37 strike-breaking flight attendants after unions threatened to disrupt Christmas flights.

Eventually, as part of a three-year enterprise agreement, the Flight Attendants Association of Australia accepted the new 870 cap, which will result in 22 per cent of Qantas's long-haul flight attendants being based overseas. In response to Mr Dixon's latest comments, the FAAA international division secretary Michael Mijatov said Qantas was one of the world's most profitable airlines and he believed jobs should be kept in Australia.

"I'll be buggered, come the next three years, whether they're going to have any increased numbers," he said. "That's it as far as we're concerned. It has become stale and tired, this constant rhetoric about doom and gloom, while at the same time (Qantas executives) pad their pockets like there's no tomorrow."

But Mr Dixon said Qantas, which made a record profit of $648million in 2003-2004 -- making it second only to Singapore Airlines as the world's most successful airline -- had no choice but to continue to look at opportunities offshore. He said carriers restructuring in the US under Chapter 11 bankruptcy protection -- abandoning pension funds and making massive unilateral cuts to wages and conditions -- would emerge leaner and meaner.

At the same time, governments in Asia were supporting airlines, and carriers were being allowed to merge in the European Union.

"To compete with that we're going to have get the lowest cost structure we can and that will mean sourcing things more and more from overseas," he said.

"It doesn't mean we'll be any less Australian and it certainly doesn't mean mass redundancies or anything like that."

The Qantas boss took aim at unions, saying a failure to negotiate on productivity improvements could restrict investment in any of the airline's business units that fell behind international benchmarks.

International flight attendants at Australian airlines have again threatened strike action over efforts to introduce new pay scales and a new roster system.

Virgin Blue - Branson challenges Corrigan
1 February 2005
Daily Telegraph

UK millionaire Richard Branson has challenged Patrick Corp to lift or scrap its bid for low cost carrier Virgin Blue, after buying shares in the market 5 per cent above the offer price.

Virgin Blue yesterday said the purchase of 5.1 million shares by Sir Richard's Switzerland-based company Cricket SA for $2.04 and $2.06 per share could make Patrick's $1.90 per share offer defunct under Australian corporations law.

Patrick went to the Australian Securities and Investments Commission, seeking clarification.

"Patrick Corp believes that the section under the law referred to should not apply and is seeking confirmation as to its view from ASIC," a Patrick spokesman said yesterday.

Section 621 (30) of the Corporations Act requires that a bid be made at a price no less than the highest price paid in the four months before the offer is posted to shareholders.

This means that because Cricket bought shares for as high as $2.06 last Friday, Patrick could have to match or better the offer.

The issue pits Patrick chief executive Chris Corrigan against Sir Richard in a tug of war for the airline's shareholders.

Sir Richard, head of Virgin Group in the UK, was not informed of Patrick's intention to make the offer.

ASIC today declined to comment but would not need to do anything as there would be no breach of the law until the bid is dispatched to shareholders in about 10 days' time.

your dedicated, ill give u that. lol.

Just out of interest, why does a person from Hong Kong (i think?) care about Aust aviation?

I do enjoy reading them when i get in tho

your dedicated, ill give u that. lol.

Just out of interest, why does a person from Hong Kong (i think?) care about Aust aviation?

I do enjoy reading them when i get in tho
He "cares" so long that it fuels his innate sence of insecurity and immaturity. :lol:

Actually, I like to look at aviation patterns around the world. For example, the kangaroo route is very popular and highly competitive, yet there are also high legal risks, such as economy class syndrome. At the same time, airlines are looking for new stopover routes and perhaps the next generation of aircraft won't even require a stopover anymore.

Australia is an interesting case where it benefits from the boom periods of the northern and southern hemisphere summers. Looking at the summer boom period, Americans visit Australia in the southern winter, while Australians head abroad in their southern summer (European / North American winter)? So is that 2 booms instead of a typical 1?
Originally Posted by huaiwei
He "cares" so long that it fuels his innate sence of insecurity and immaturity.

Obviously, some people who are not capable of contributing will feel a sense of insecurity and immaturity!

Actually, I like to look at aviation patterns around the world. For example, the kangaroo route is very popular and highly competitive, yet there are also high legal risks, such as economy class syndrome. At the same time, airlines are looking for new stopover routes and perhaps the next generation of aircraft won't even require a stopover anymore.

Australia is an interesting case where it benefits from the boom periods of the northern and southern hemisphere summers. Looking at the summer boom period, Americans visit Australia in the southern winter, while Australians head abroad in their southern summer (European / North American winter)? So is that 2 booms instead of a typical 1?


Obviously, some people who are not capable of contributing will feel a sense of insecurity and immaturity!
Actually, hkskyline is your perfect example of an insecure foreigner stuck somewhere in the bitter cold of North America, who spend their time reading and forming their opinions of the world based on media articles alone. Nothing particularly wrong with that, until his lopsided views clashes with those who happen to be from where he is criticising against.

That he is supposedly interested in aviation is actually part of his serious case of homesickness. Trying to sell his home city as a transport mecca has consumed so much of his psyche, that he goes hot under the collar everytime people from a certain city happens to demonstrate quite well that his beloved city isnt exactly quite alone up there in this regard!

So...all he could do is spam this forums with a torrent of news articles just so that he could push Singapore-related threads to the end of the 20th page in every section. Yeah...amazingly childish, but this guy has been doing this for more than 2 years...long before I was even in this forums! :eek:

If you guys dont believe me, just watch how he posts every single minute he is online. And if you think he is really "interested" in aviation, try being in a position of actually discussing with him about serious aviation topics beyond what can be gleaned from newspaper articles. You will be amazed with his level of mastery in this topic, as I had in very recent incidents! :D

Seriously, why would I have problems contributing? All it takes is go to any search engine, and post every single article related to aviation over here, preferable one thread per article too, so that it helps to create a whole bunch of threads nobody replies to, but at least they do push down the threads which somehow become the subject of "hate"....now seriously, why should I bother about that lame sentence? :lol:

You know, some people are interested in what's happening outside their backyard. We live in a global economy. People who don't realize this and are not willing to step out their black box should feel insecure and hence lash out at those who have made their step, because their unconscious knows they're behind.

Virgin Blue battle still up in the air
ELIZABETH KNIGHT
2 February 2005
The Sydney Morning Herald

It's easy to understand why Virgin Blue shareholders are a particularly confused subset of the Australian investment community. And who could blame them? Their shares are being bid for by one of the toughest, most astute but least generous operators in the market, Patrick Corp's Chris Corrigan, who has taken on possibly the world's greatest spin doctor, Richard Branson.

Truth has to be the first casualty in this battle.

To make matters worse there is a legal cloud over whether the offer price is $1.90 (which is what Patrick is saying) or $2.06 (which is what Branson is saying).

Branson has about 25 per cent of Virgin and Corrigan's Patrick has 45 per cent, and both are capable of doing over minority shareholders.

Despite the fact that these two are battling over Virgin, in a legal sense they are associates. And thanks to this wrinkle in the Corporations Law, Branson reckons whatever price he pays for Virgin Blue shares has to be matched by Corrigan's bid price.

Given Corrigan is bidding for all Virgin shares he doesn't own - including Branson's - this would effectively allow Branson to set the price Corrigan bids for his shares. In other words, Branson can pick up a couple of Virgin Blue shares for $3 and Corrigan has to pay that price to all Virgin shareholders.

It's crazy, and will ultimately have to be sorted out by some authority - logic would suggest in favour of Patrick.

The Australian Securities and Investments Commission is looking at whether Patrick can get a waiver. If not, the whole mess will be laid at the feet of the Takeovers Panel, which was set up to deal with just this sort of strange anomaly.

But let's forget the confusion over price for a minute - the fact is that Corrigan doesn't even need to make a takeover bid in order to buy out Branson's stake.

Because under the law they are considered associates, Corrigan can make an attempt to just buy any or all of Branson's stock without making the same offer to other shareholders.

Given Branson's dismissive response to Patrick's $1.90-a-share offer, it's not drawing such a long bow to assume that Patrick is after only a portion of the Virgin Blue stock - just enough to gain a bit more control.

But there is the even stranger part: Patrick could buy shares on-market, using the creep provisions, to take its stake to more than 50 per cent in a year. No need to make a bid.

In addition, if the stated objective of the offer is to get more control, this begs the question of how much more control could Corrigan exercise with 50 per cent than he already has with 45 per cent.

Patrick argues it could get more directors on the board. But all Corrigan needs to do is call a shareholder meeting and it would have the votes to do this without buying another share.

Corrigan has no real need to do any of this for operational reasons. He can take a firmer control of the management or change it if he wants.

And Corrigan rarely makes mistakes.

If you believe the spin from the Patrick camp, Corrigan has launched this bid to allow all shareholders to cash out their stock if they want to. A kind of egalitarian gesture.

The truth is Patrick is not in the business of doing favours for other companies' shareholders - and nor should it be.

Patrick and its boss Corrigan are out to take advantage of weakness in Virgin's share price to pick up as much stock as it can at a bargain price.

If Branson loses his nerve and sells out at $1.90 then this would be a bonus.

But Corrigan knows that the UK spin doctor won't take the bait at that price - which is exactly why he didn't negotiate with him to buy his stake.

And if you really want the opportunistic icing on the cake, one need look no further than the timing of the bid - right in the wake of a profit warning.

Corrigan wants to take advantage of all those people that think that Virgin has had its day and will see its financial performance continue to slide under additional competition from Jetstar.

I had long suspected that Virgin would hit the wall when Geoff Dixon ultimately drew a line in the sand with the launch of Jetstar and the dumping of capacity onto the local market.

Until then Virgin had experienced an unfettered dream run. But it's still a low-cost airline in a duopoly and it will ultimately make a reasonable return once the two airlines start to be sensible about capacity.

And to the extent that one would have doubts about Virgin's ability to make a return, the very fact that Corrigan is buying is the best evidence yet that the price/earnings multiple of 15 times implied by the bid is probably not as expensive as it sounds.

You know, some people are interested in what's happening outside their backyard. We live in a global economy. People who don't realize this and are not willing to step out their black box should feel insecure and hence lash out at those who have made their step, because their unconscious knows they're behind.
I agree. As far as I know, your knowledge of the world is seriously retarded despite your travels! :lol:

I am interested in some topics, especially those pertaining to the Australian aviation market, because it is intrinsically linked to the Singaporean aviation market. Notice almost every major movement in the Australian aviation landscape will trigger talk related to Singapore's aviation scene? It is fun trying to predict what will be their next move! :D

Feb 1, 2005
Patrick Corp may settle for control of Virgin Blue

SYDNEY - PATRICK Corporation, Australia's biggest port handler, may settle for a controlling stake of Virgin Blue Holdings, amid expectations Sir Richard Branson's Virgin Group will thwart a full takeover of the discount carrier.

Sydney-based Patrick, with 45 per cent of Virgin Blue, last week offered A$1.90 a share, or A$1.1 billion (S$1.4 million) for the remaining stock. London-based Virgin Group responded by buying about 0.5 per cent of the airline, raising its stake to 25.1 per cent and prompting shareholders including Deutsche Asset Management's Mr Andrew Fay to speculate a full takeover may fail.

Patrick 'would like to have operational control' of Virgin Blue, said Mr Fay, who helps manage A$28.5 billion at Deutsche. 'They've been somewhat frustrated with some of the decisions that have been made.'

Patrick's chief executive Chris Corrigan made his Jan 28 offer about a week after Virgin Blue said rivalry from Qantas Airways would cut profit, sending the company's stock to its biggest slump in more than five months.

Mr Corrigan may want to gain control to shift the airline's focus to earnings maintenance from slashing prices in a price war with Qantas.

Patrick may have to increase its offer to A$2.06 a share to match the highest price paid for Virgin Blue shares by Virgin Group on Friday, Brisbane-based Virgin Blue said in a statement to the Australian Stock Exchange (ASE) yesterday.

Under Australia's Corporations Act, takeover offers are required 'to be at a price which equals or exceeds the maximum consideration that the bidder or an associate of the bidder provided or agreed to provide in the four months before the date of the bid', Virgin Blue said.

Patrick disputed the contention that it may have to raise its bid and told Virgin Blue it was seeking a ruling from Australia's Takeover Panel and the Australian Securities & Investment Commission, Virgin Blue said.

Patrick, Virgin Blue's biggest shareholder, said in its bidder's statement last week that it intended to retain the airline's senior managers. The airline would no longer trade on the ASE if Patrick acquired all its shares, the statement said.

Virgin Blue, Australia's second-largest carrier, advised its shareholders 'to do nothing at this stage'. -- BLOOMBERG NEWS

SIA not interested in acquiring stake

SINGAPORE Airlines (SIA) said yesterday it had no interest in acquiring a stake in Australian budget carrier Virgin Blue, with its main focus Down Under being to secure a route to the United States.

'In the last few days, there have been some media reports concerning the bid by Patrick Corporation to increase its stake in Virgin Blue. Some reports have mentioned Singapore Airlines,' SIA said in a statement to the Singapore Exchange.

'Singapore Airlines has not had any discussions with Patrick Corporation about the bid ... SIA is not in the market for, nor considering, any investment in Virgin Blue.'

SIA said its interest in Australia 'is very much focused on seeking the right to provide competition to benefit the travelling public between Australia and the US'.

SIA and Singapore are lobbying the Australian government to allow full competition on the lucrative Australia-US routes. -- AGENCE FRANCE-PRESSE

I agree. As far as I know, your knowledge of the world is seriously retarded despite your travels! :lol:

Obviously a person with a lack of travelling experience and open mind is too incompetent to judge.

Jetstar begins new flights to Adelaide
1 February 2005
Australian Associated Press Financial News Wire

JETSTAR SYDNEY - Qantas Airways Ltd's low cost carrier Jetstar today began flying to Adelaide.

The airline will initially operate 42 flights a week to and from the South Australian capital from the Gold Coast, Hobart and Melbourne Avalon airports using 125 seat Boeing 717s aircraft.

The airline also said it planned to begin flying from Adelaide to Cairns from June 2, using 177 seat Airbus A320 planes.

It will be the first time an airline has operated a direct Adelaide-Cairns service.

Jetstar chief executive Alan Joyce said the route will allow the Qantas Group to offer access to South Australia to an increasing number of international tourists now arriving in Australia via Cairns.

Qantas currently operates six return international services to Cairns per week, while Australian Airlines operates 18 weekly return services.

"The launch of a new four times weekly direct Adelaide-Cairns service ... keeps Jetstar at the forefront in continuing to pioneer new point to point domestic flights," Mr Joyce said.

Qantas shares were steady on $3.56 at 1120 AEDT.

Let's see what more is happening outside my backyard :

Qantas CEO says Virgin Blue is a good operation
1 February 2005
Australian Associated Press Financial News Wire

QANTAS SYDNEY - Qantas Airways Ltd chief executive Geoff Dixon believes low cost carrier and domestic market rival Virgin Blue is a "good operation".

In an interview published in this week's The Bulletin magazine, Mr Dixon agreed that Virgin Blue was a solid business.

"I don't want to be giving a plug to my competitors but they've a pretty good operation," he said.

"They've had their ups and downs, but they're a solid business."

Virgin Blue is currently the target of a takeover offer by its 45 per cent owner Patrick Corp Ltd.

The offer is in doubt until the Australian Investments and Securities Commission resolves whether Patrick can be exempted from a section of the corporations law.

The section stipulates that a bid be made at a price no less than the highest price paid in the four months before the offer is posted to shareholders.

Thursday February 3, 4:06 PM
Virgin Blue suitor says Australia air price war cannot continue

SYDNEY (AFP) - Virgin Blue suitor Chris Corrigan said he wanted an end to aggressive fare price discounting in Australia, signalling a move away from the strategy British tycoon Richard Branson used to build up the discount airline.

Patrick Corp boss Corrigan also accused Virgin Blue of failing to respond adequately to the launch of a rival discount airline by Qantas even though he was chairman of the airline until last week when his offer was launched.

Corrigan, whose 1.99 billion dollar (1.54 billion US) or 1.90 a share offer was rejected as too low by Branson, said the airline needed to adapt to Australia's changing domestic aviation market.

He said the airline had been wrongfooted by Qantas's launch of no-frills rival Jetstar last year.

"We need to adapt this model to the Australian environment," he told reporters at Patrick's annual general meeting. "We underestimated the impact of Qantas."

Corrigan said the price war with Qantas was unsustainable, singling out super cheap fares offered by Virgin Blue for as little as one dollar

"They can't keep going down at the catastrophic rate that they have been," he said. "(Virgin Blue) recently quoted fares at one dollar -- I don't think anybody here would expect that we make a lot of money out of a dollar."

Corrigan's Patrick bought into Virgin Blue on Branson's invitation in 2002. He is a conservative, suit-wearing businessman, whose style often appeared at odds with Branson's flamboyant style.

Corrigan told shareholders that Patrick, which already holds 45 percent of Virgin Blue, wanted to take greater control of the airline.

"We do have some ideas about key strategic decisions," he said.

He denied trying to force out Branson, who founded the airline just over three years ago.

"We are satisfied with a controlling stake ... I welcome him to stay on as a shareholder," he said.

Corrigan also criticised the airline for expanding capacity too quickly in the face of limited demand and said Virgin Blue's profit in the six months to September and a profit warning issued last month were both disappointing.

"Profitability hasn't been as good as hoped," Corrigan said. "Since Jetstar, the operating environment has been much more competitive."

Virgin Blue shares closed steady at 2.12 dollars in a firmer overall market.

The Australian
February 3, 2005
Qantas management shuffle
SOURCE: MATP
Steve Creedy, Aviation writer

QANTAS chief executive Geoff Dixon has boosted the responsibilities of his potential successors as part of a management restructuring aimed at fine-tuning the airline's operations.

Chief financial officer Peter Gregg and Qantas Airlines executive general manager John Borghetti will take responsibility for fleet and network issues, tasks previously handled by alliances general manager Paul Edwards.

"I have decided to make changes to the Qantas management structure to better enable the company to meet the ever-changing needs of the aviation industry and, in particular, the competitive pressures," Mr Dixon said in a memo sent to staff last month.

The two executives have long been seen as potential successors to Mr Dixon, with Mr Gregg -- a board member -- considered the stronger bet.

Mr Dixon's contract was extended last year to mid-2007.

Mr Gregg takes responsibility for fleet and long-term network development while Mr Borghetti assumes network management, including scheduling.

Mr Borghetti will also continue to chair a group that co-ordinates Qantas, Qantaslink, Jetstar and Australian Airlines.

Mr Edwards maintains responsibility for long-term alliance relationships and takes on a new role overseeing Qantas investments in other airlines such as Jetstar Asia and Air Pacific.

Mr Dixon's memo reiterated earlier comments about the need to introduce further efficiencies and tighten integration across the group.

He cited this as a reason for requiring Fiona Balfour -- the executive general manager of business services and the chief information officer -- to report to Mr Gregg instead of directly to Mr Dixon.

UPDATE 1-Australian regulator confirms Qantas/BA alliance

SYDNEY/LONDON, Feb 8 (Reuters) - Australia's antitrust regulator said it would allow an alliance between Qantas Airways Ltd. and British Airways Plc on the 'Kangaroo Route' between Sydney and London to continue for another five years.

Between them, Qantas and BA carry 40 percent of passengers flying between Australia and Europe and 30 percent of passengers travelling from Australia to Southeast Asia.

The alliance between the two airlines has been in place since 1995 and is set to continue despite BA selling its 18.25 percent stake in Qantas last September.

Richard Branson's Virgin Atlantic and its discount sister airline Virgin Blue Ltd. had sent submissions to the regulator claiming the way Qantas and BA cooperated on the routes was anti-competitive.

A Virgin spokeswoman said the group had not yet decided whether to appeal the decision.

"Virgin Atlantic is very disappointed with this decision and we cannot understand why the ACCC would have reached this decision," the spokeswoman said.

The Australian Competition and Consumer Commission (ACCC) ruling confirms its draft decision last August that the Joint Services Agreement (JSA), under which Qantas and BA coordinate their operations, could continue.

"It is clear from submissions made to the ACCC that there has been strong price competition on the Kangaroo Route, particularly for leisure travellers, over recent years, and the ACCC is satisfied that this price competition will continue," it said.

The ACCC said that while the alliance did lessen competition for business travellers on Australia/UK routes, this was outweighed by cost savings, the availability of discount seats and schedule connections.

BA welcomed the decision which it said followed a 21-month investigation.

"The JSA on the kangaroo routes has been in place for 10 years and we have always said it is pro-consumer and pro-choice," Roger Maynard, BA's director of investments and alliances, said in a statement.

Qantas shares closed up 1.1 percent at A$3.73 in a weaker overall market on Tuesday, while British Airways had added 1.6 percent to 275 pence at 1140 GMT.

No. of Plane Crash Deaths in Australia Declines in 2004: Report

CANBERRA, Feb 9 Asia Pulse - There were 13 fewer deaths in aircraft crashes in Australia last year than in 2003, a new report shows.

In 2004, 21 people died in aircraft crashes, while 34 people were killed the year before, the Australian Transport Safety Bureau (ATSB) said.

There were 133 crashes in 2004, one less than in 2003.

Victoria recorded the most deaths of any state, with 11.

It was also the scene of one of the worst crashes last year, when a Piper Cheyenne aircraft flying from Sydney to Benalla, 200km north-east of Melbourne, crashed in rugged terrain.

All six people aboard were killed.

Melbourne Airport Set for Major Expansion

MELBOURNE, Feb 10 Asia Pulse - Melbourne Airport plans to expand its international terminal to cater for growing passenger numbers.

It is the second major project announced by the airport in the past month, after it unveiled plans to widen its north-south runway for the new double-decker Airbus A380.

The terminal expansion project is part of a $A220 million ($US169.4 million) development program to accommodate an increase in international passengers and the new Airbus.

L U Simon has won the contract for the work, which will add 5,000 square metres of floor space to the terminal.

Airport acting chief executive Kirby Clark said Melbourne's international passenger traffic had grown 7.2 per cent, twice the Australian average, over the past seven years.

Construction is expected to start at the end of February and completed within a year, in time for the Commonwealth Games in March 2006.

Associated Press
Singapore Airlines Accused of Interference
02.09.2005, 05:57 PM

Singapore Airlines Ltd.'s invitation to Australian lawmakers to fly as its guests to its city-nation base provoked accusations of undue political interference Thursday.

The debate is over whether the airline should be allowed to compete on the U.S.-Australian route or not.

Singapore's Transport Minister Yeo Cheow Tong will meet his Australian counterpart John Anderson in the Australian capital Canberra next week to seek rights for his country's national carrier to fly onward to the United States from Australia.

The visit comes as 10 members of a parliamentary transport committee consider an invitation to fly to Singapore at the airline's expense to examine its operations.

Opposition Labor Party transport spokesman Martin Ferguson urged the lawmakers to refuse the invitation.

"I'm astounded that in the year in which Singapore Airlines is lobbying the Australian government hard to open up the trans-Pacific route to their advantage that they are trying to, in essence, unduly influence politicians by offering all-expenses-paid trips to Singapore," Ferguson told Australian Broadcasting Corp. radio Thursday.

Ferguson said Singapore Airlines was entitled to have its bid to compete on the trans-Pacific route considered on its merits.

"I simply say that their offer at this point of the policy consideration of the issue is unnecessary and, frankly, just plain wrong," Ferguson said.

Committee chairman Paul Neville said committee members wanted to accept the invitation but were awaiting approvals from their government.

"If we were to receive those approvals, we would carry out our activities in a very open and transparent way," Neville told ABC. "Singapore Airlines have made these opportunities available in the past and people haven't been heavied on those delegations."

"We wouldn't do anything that was not in Australia's interest," he added.

Neville described Singapore as the world's best transport hub and the trip promised a unique opportunity to study transport infrastructure and talk to Singapore lawmakers.

Australian government protocol dictates that the government pay for the lawmakers' airfare and accommodation if they are on official committee business.

However if the trip was not approved, they could travel at Singapore's expense in an unofficial capacity.

Qantas plans Airbus base - Maintenance won't go offshore
Steve Creedy
11 February 2005
The Australian

QANTAS is to establish a maintenance base for its new Airbus A320 aircraft in Australia, quelling fears that the work might go offshore.

The group's low-cost unit, Jetstar, is expected to announce today that the maintenance work will go to Newcastle. The NSW regional centre was among a number of options being canvassed by Qantas that included sending the work to New Zealand or awarding it to the former Ansett maintenance facility in Melbourne.

Asia was also touted as an offshore possibility, but New Zealand was considered more likely because of its proximity and the fact Air New Zealand already operates an A320 heavy maintenance base.

The decision to keep the work in Australia comes despite recent warnings by Qantas chief executive Geoff Dixon that Qantas could no longer afford to be an "all-Australian business".

Mr Dixon told The Australian last month the airline had no choice but to source more of its people, services and products overseas.

Jetstar already has a maintenance facility in Newcastle servicing the 14 Boeing 717s inherited when Qantas swallowed Impulse Airlines.

But Jetstar is progressively replacing the 717s with the bigger, 177-seat A320s and plans to operate an all-Airbus fleet of 23 A320s by the middle of next year. The A320 program is believed to be bedding down well with two more aircraft due to arrive from Jetstar Asia next month.

It was not clear yesterday how many additional maintenance jobs the bigger A320 fleet would ultimately bring to Newcastle, but sources estimated it would be in the order of 50 to 60 above current staffing levels.

They said the figure could be slightly more if Jetstar won a contract to maintain eight Boeing 717s due to be transferred to Qantas regional subsidiary Qantaslink for deployment in Western Australia, the Northern Territory and Queensland. Jetstar has been vying with Adelaide-based National Jet Systems for a contract to maintain and operate the Qantaslink 717s. A decision on the competition could be announced as early as today.

Some expect a split decision, with NJS retaining the flying and Jetstar keeping the maintenance.

Qantaslink proposes to replace eight 65-76 seat BAe-146 aircraft now flown by NJS with 717s reconfigured to 115 seats and a 32-inch seat pitch.

It will deploy the bigger planes to Western Australia, the Northern Territory and Queensland.

Routes include Perth to Broome, Kalgoorlie and the Pilbara, and Alice Springs to Uluru, Broome, Cairns, Darwin and Perth.

Qantaslink says the changes and a $200-million plan to buy seven Bombardier Q400 aircraft will lead to more discount fares for regional communities.

The faster, 72-seat Q400s will replace 50-seat Dash 8-Q300s on some routes. The displaced aircraft will in turn replace 36-seat Dash 8-100s and 200s on other routes.

Posted: 11 February 2005 1436 hrs

Singapore Airlines rejects Australian Labour Party allegations

SINGAPORE : Singapore Airlines (SIA) strongly rejected allegations by Australia's opposition Labour Party it had offered free flights to Australian lawmakers as part of lobbying efforts to gain access to lucrative Australia-US routes.

SIA spokesman Stephen Forshaw said the carrier had invited members of the Australian Parliament's transport committee to visit Singapore but only to be briefed on the airline's operations and scale of its investments in Australia.

He said Singapore-Australia talks for an open-skies agreement agreement were being held at a government-to-government level which did not involve the transport committee members.

Australian Labor Party tourism spokesman Martin Ferguson yesterday criticised SIA for offering an all expenses paid four-day trip to Singapore to the 10 members of the House of Representatives' transport and regional affairs committee.

Speaking on national radio, Ferguson linked the offer to SIA's efforts to convince the Australian government to give it access to the lucrative Australia-US routes now dominated by Australian flag carrier Qantas.

The exchanges come ahead of a trip by Australian transport minister, Deputy Prime Minister John Anderson, to Singapore next week for talks with his counterpart on the issue.

"We reject absolutely any suggestion from Martin Ferguson that the visit is linked to the ongoing air services talks," SIA spokesman Forshaw said in a statement.

He noted that that air negotiations are being held between the Australian and Singaporean governments and that the parliamentary committee is neither involved in the discussions nor does it negotiate Australia's air rights.

"SIA is a major player in the Australian market. We fly over 4,300 flights a year into Australia and carry almost two million passengers a year into and out of Australia.

"We invest hundreds of millions of dollars a year in the Australian economy, train all our pilots in Australia and are the largest overseas airline flying to and from Australia by passenger numbers," Forshaw said.

"It is just a natural part of our place in the Australian market to ensure that politicians and the wider community understand our business, the size and scale of our operations in Australia and the issues we face."

He described Ferguson's remarks as "part of what has become a very bitter campaign being waged against SIA by those who seek to maintain protection of Qantas on the US route, which is unquestionably one of the most protected air routes in the world."

SIA remains "resolutely focused" on providing travellers on Australia-US routes a wider choice, he said.

Last month, SIA chief executive Chew Choon Seng said the Australia-US routes are a market "crying out for additional supply of capacity and (more) competition."

Singapore Transport Minister Yeo Cheow Tong said earlier this week the city-state is aiming for a full open-skies agreement with Australia within two years. - AFP

Feb 11, 2005
Hopeful signs for S'pore-Australian aviation talks
Real chance of deal giving SIA greater access to Australian market

By Roger Maynard
Australia Correspondent

TALKS aimed at persuading the Australian government to authorise an open-skies agreement allowing Singapore Airlines (SIA) to fly its planes on the lucrative North American route in direct competition to Qantas will get under way here on Monday.

Singapore's Transport Minister Yeo Cheow Tong will meet Australia's Transport Minister John Anderson in the hope of making headway in the campaign to win greater access for SIA in the Australian aviation market.

While both sides are some way from agreement, sources believe that there is now a very real chance of reaching a deal later this year.

That could mean a phased introduction of services, possibly involving Brisbane or Melbourne in the early stages, rather than Sydney.

'It certainly won't happen overnight,' an SIA spokesman in Sydney said.

The main stumbling block to an agreement is Qantas, which argues that an open-skies policy would be to its distinct disadvantage.

Chief executive Geoff Dixon has made his position clear, pointing out that such a deal would not deliver reciprocal opportunities for Australian carriers due to restrictions in Australia's bilateral agreements with third countries.

For instance, Qantas does not have the rights to match SIA on routes to North America via Taipei, Tokyo, Hong Kong or Seoul. It would like greater access to some European cities as well. Canberra has to resolve these issues if it gives the go-ahead to Singapore's demands. The Australia-United States route Qantas' most profitable route.

Further competition across the Pacific, which provides about 15 per cent of the airline's profits, would clearly have an impact on its earnings.

Equally, Singapore is so keen to secure an agreement that Mr Yeo has offered Qantas 'whatever they want' in return.

Canberra first rejected the idea of an open-skies policy in 2003 on the grounds that the aviation industry was still suffering from the financial impact of the Sept 11 attacks on the US and the Sars epidemic.

It postponed further talks on the matter until the aviation market had recovered.

SIA chief executive Chew Choon Seng believes that point has now been reached. Last month he said in an Australian newspaper interview that 'the time has come'.

'The (record) results from Qantas have been promising. Demand for travel on the (North American) route is as stable as it can get. By all measures stability has returned.'

Qantas has not been slow to recognise the improvement in the market either, announcing the launch of Jetstar Asia, which has been backed by the Singapore Government.

Aviation industry observers believe the Australian government will find it extremely difficult to resist Singapore's call for an open-skies policy for much longer.

Given that Qantas is keen to get a slice of the action in Asia through Jetstar, it can hardly complain about Singapore wanting a foothold in the Australian market, an industry source said.

February 10, 2005
Virgin slams ACCC
The Australian
SOURCE: MATP
Steve Creedy

VIRGIN Atlantic has launched a stinging attack on the competition watchdog for allowing Qantas and British Airways to continue a price-fixing agreement, saying the deal would be deemed illegal in other jurisdictions.

The Australian Competition and Consumer Commission on Tuesday approved the BA-Qantas joint services agreement (JSA) for a further five years after ruling it delivered an overall benefit for consumers. The deal allows the airlines to co-ordinate scheduling, marketing, sales, freight and customer service on the kangaroo route to Europe.

But Virgin Atlantic head of Asia-Pacific Mackenzie Grant yesterday labelled the agreement anti-competitive and said he could not believe the ACCC had renewed it without at least imposing conditions and limits.

He said the reasons for originally forming the alliance a decade ago no longer existed and the deal was pushing up prices in the business travel market.

"What they're actually doing is giving Qantas and British Airways immunity from prosecution for doing something that would be illegal in other aviation markets," he said.

"Certainly in Europe and the US, this would not be allowed -- two carriers who have a dominant position being able to fix prices. It doesn't make any sense."

Virgin Atlantic began flying to Australia via Hong Kong in December and objected to the JSA because it thought the deal gave Qantas-BA an unfair advantage.

Mr Grant said he believed Virgin Atlantic had been the only airline to object to the agreement because it and Austrian Airlines were the only carriers still flying to Australia from Europe.

"All the other European carriers have long since stopped serving Australia and I believe the reason for that is partly due to the joint services agreement," he said.

Despite the unwelcome news, the Virgin executive said the airline's new Sydney route was going "quite well".

Virgin is flying two-class A340-600s on the route and has been pitching its generous sleeper beds, limousine service and in-flight bar to business customers.

"We're slightly ahead of where we'd thought we'd be at this point," he said.

"Two months into a new route is not a long way and usually we like to give the route six months to settle down before we comment, but certainly I can say it's going in the right direction.

"We've had a lot of support from the travel agent community in general in Australia and we also had some good consumer support. We're pretty pleased with the outcome."

Lion Air expands Feb 8
Lion Air started flights between Jakarta and Seoul via Denpasar and Manila on Sunday and between Jakarta and Phusan - also via Denpasar and Manila. Flights are to operate 5x a week. The airline is also planning to inaugurate service from Jakarta to Perth in June

Just curious, I wonder how SIA would react if QF inaugurated SYD-SIN-JFK service if they ever got their hands on a few A350's?

Just curious, I wonder how SIA would react if QF inaugurated SYD-SIN-JFK service if they ever got their hands on a few A350's?
Just scream louder...if anyone hears them? :D Sometimes, even the CAAS dosent care!

With many staff not calling Australia home, morale at Qantas isn't soaring
Robert Wainwright
15 February 2005
The Sydney Morning Herald

The Flying Kangaroo may be one of our most famous marketing images, but it appears Qantas staff are not as warm and fuzzy about the airline as the public.

A six-month survey of more than 8000 staff has thrown up mixed results about their "engagement" with the company and its future. Though senior managers will not confirm the figures, staff briefed in a series of forums in Singapore last month say they have been told the results, which - in some areas - are among the lowest recorded by the international human resources company, Hewitt Associates.

While about three quarters of the staff employed by companies such as Hewlett Packard, Virgin Blue and Australian Airlines were engaged in their work, Qantas domestic or short-haul staff rated just 53 per cent, and international or long haul 22 per cent.

It comes as the company pursues controversial plans to move as many as 7000 jobs offshore while preparing, next week, to announce a record interim profit result on the back of improved international operations and cost-cutting.

Kevin Brown, Qantas's executive general manager of people, would not discuss specific results except to say the company had been rated as "stable" overall and that there was a range of results.

"This is the first time we have done this type of survey, which is quite appropriate considering the changes the company has been going through," he said.

"It was not a satisfaction survey. We have asked a sample group of staff about how they feel about the changes and if they are willing to play a role. I suppose, like any other company, you are going to find a range of opinions among a staff of 38,000."

"The overall result was that Qantas sits in a stable zone. That's to be fully expected."

But one Qantas employee said the message to staff at overseas forums in January had been much starker. "We were told the 22 per cent rating was among the lowest of any survey done by Hewitts ... The bottom line was that people went to work and did their best [but] many didn't care about the company because they felt the company didn't care about them.

"The managers said they were devising a five-year plan to turn around staff attitudes. They wanted ideas."

Mr Brown rejected the criticism: "It was no surprise that there is a range of views out there, but it is not true that this means there are large numbers of people who hate each other and the company.

"It means that on balance, and compared to other companies, our staff are prepared to participate ... We are actually going out and asking staff what they think it means. I think customers would be pleased that we are talking to our staff."

I didn't even know Virgin Atlantic flew to Australia.

Virgin Atlantic just recently started flying to Australia via Hong Kong. This route became possible after Hong Kong struck bilateral air services agreements with Britain and Australia.

$300m to expand Canberra airport - Approval expected today
By John Thistleton
16 February 2005
Canberra Times

Federal Government approval today of the Canberra Airport's master plan will open the way for a $300million five-year expansion, including a new terminal and runway extensions, and direct flights to New Zealand, Asia and the Middle East. Deputy Prime Minister and Transport Minister John Anderson is expected to decide today on the 20-year master plan after a 90-day public-consultation period. Approval will mean confirmation of a 24-hour, curfew-free status for a freight hub, direct flights to Wellington and Auckland this year, to Singapore in three to five years, and bypassing Sydney airport with flights to the United States via New Zealand. The major components of the expansion, the runway extension and new terminal, capable of handling twice as many passengers and accommodating five million passengers by 2024, are expected to cost $150million. Four carriers have been talking to Canberra Airport about its plans to make Canberra a globally linked national capital.

An Air New Zealand spokeswoman said last night that if the opportunity arose the carrier would naturally consider flying out of Canberra direct, but had not made a commitment at this stage. Canberra Airport's managing director, Stephen Byron, said Air Pacific, Qantas, Air New Zealand and Jet Connect (New Zealand), had been approached about direct flights from Canberra. He expected either Qantas or Singapore Airlines to offer direct flights to Singapore within three to five years, making the trip to Europe more efficient. Flying to Auckland would give passengers the opportunity to continue on to the US west coast. ''It is much more efficient than going through Sydney, we haven't achieved that yet,'' he said. ''Canberra Airport is covered by the Federal Government's open-skies policy for major secondary international ports, and we would welcome the opportunity for Singapore Airlines to fly from here now, or any other airline. It's a question of us building the infrastructure to get the capability and doing the deals with the airlines so we can connect the cities.'' Domestic passenger numbers had grown by 20 per cent over the past 12 months and direct international flights to the Pacific, New Zealand and Asia would attract about 250,000 passengers within the life of the master plan. Direct services to Asian and

Middle East hubs - Singapore, Bangkok and Dubai - would follow within five to 10 years. The master plan includes developing Fairbairn and a proposal to have Air Services Australia's national fire-fighting training moved to Fairbairn from Brisbane. This would create 150 jobs in the short term and 250 over the next five years. Approving the master plan would allow the airport to transform into Australia's most modern and efficient transport hub. International flights would mean more engineering support services and prestige for Canberra, and a freight hub would provide a huge economic boost to the region, from the logistics of freight on and off airlines to distribution and road infrastructure.Keeping rural corridors north and south of the main runway free of residential development would mean that increased flights would not impinge on 99.5 per cent of the Canberra and Queanbeyan communities.

Mr Byron said the airport would work with the ACT, NSW and Federal Governments to have the question of whether a residential development at Tralee should go ahead resolved by June. ''This issue must be put to bed. I think the community is sick of it,'' he said. ''I think the community knows what they want. They don't want to be living under flight paths. I think the planners are acknowledging we can grow to 800,000 across Canberra and Queanbeyan and we can both grow in harmony and not have one new house under a flight path.'' Deputy Chief Minister and Minister for Business, Economic Development and Tourism Ted Quinlan said Canberra and Queanbeyan were fortunate to have a high-noise corridor which did not impinge on existing residential areas and that should not change. Building houses under or near flight paths defied logic. The Government had already expressed concern regarding uncontrolled commercial development at the airport and said it had to be planned in the context of the whole city. Village Building Company chief executive Bob Winnell, whose company is planning the Tralee development, said last night he would wait to hear Mr Anderson's views before making any comment on the master plan. Queanbeyan City Mayor Frank Pangallo said the council did not believe the plan would affect its future developments but said of 24-hour airport operations that ''[flight noise] in the middle of the night would be devastating''. The council was waiting on a commission of inquiry into the Tralee development before making a decision on the proposal. This was expected in the middle of the year. The council had to abide by Australia-wide standards for its developments. ''We've always said, and will continue to say, we will abide by those restraints,'' he said.

Business Times - 17 Feb 2005

Qantas steps up opposition to SIA flying Aussie-US route

SYDNEY - Qantas stepped up its push to stop Singapore Airlines (SIA) gaining access to the lucrative Australia-US market on Thursday after Singapore officials said SIA could be flying the route within a year.

Singapore Transport Minister Yeo Cheow Tong told reporters on his return home on Wednesday that he had put forward the 12-month timeframe during 'positive and friendly' negotiations this week with his Australian counterpart John Anderson in Canberra.

Qantas reacted strongly to the prospect of SIA competing on the route where it earns about 10 per cent of its overall profits, renewing calls for Mr Anderson to delay SIA's entry because of ongoing 'mayhem' in international aviation markets.

Qantas chief executive Geoff Dixon challenged claims that SIA's entry would lead to cheaper trans-Pacific flights and said there was already intense competition on the Sydney to Los Angeles route.

'Lower fares are a little bit unlikely,' he told a media briefing. 'They (SIA) are not known around the world as a low fare airline.

'There is an abundance of seats and an abundance of cheap fares.'

He said Qantas was struggling to compete because it did not get the government backing enjoyed by many of its rivals, including SIA.

'Singapore Airlines should not be granted access to the trans-Pacific route at this time,' he said.

Mr Dixon denied his case was undermined by the fact that he was unveiling a record interim profit when he made the remarks, saying he merely wanted to ensure Qantas was not unfairly disadvantaged.

'The situation with Singapore Airlines is that we do not have the same rights out of Singapore,' he said.

Singapore and Australia signed a partial 'open skies' agreement in 2003 which gave Qantas unrestricted rights to fly into Singapore's Changi airport and onwards, providing greater access to Europe.

However, Qantas successfully lobbied for trans-Pacific routes to be excluded because of an international travel slump caused by the Sept 11, 2001 terrorist attacks on the United States and then the severe acute respiratory syndrome (Sars) crisis and the war in Iraq.

Officials said then the issue would be revisited when the market stabilised and Canberra has indicated in recent months that it will be difficult to justify SIA's continued exclusion.

Mr Yeo said Mr Anderson 'appreciated the fact that there was a commitment made in September 2003 that we will proceed onto this last issue when the aviation industry has stabilised.

'And indeed he recognised the fact that it has not just stabilised but the airlines concerned are actually doing very well,' he added.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Australia's Macquarie Airports: Jan Sydney Traffic +6.6%
17 February 2005

SYDNEY (Dow Jones)--Australia's Macquarie Airports (MAP.AU) Friday reported a 6.6% increase in passengers through its Sydney Airport in January, part of a trend that saw increased traffic at all but one of its airports.

A total of just over 2.5 million passengers went through Sydney airport in January, compared with 2.4 million in the same month a year ago.

This included record international traffic, with 65,000 more international passengers than in the previous highest month.

"January 2005 was a strong month for traffic growth across all major airports in MAp's portfolio, including MAp's Brussels Airport," Macquarie Airports Chief Executive Kerrie Mather said. [ 17-02-05 2242GMT ]

Passenger traffic at Brussels rose 7.1% on the year ago period to 987,000 in January.

Macquarie Airports, a listed fund managed by Australia's Macquarie Bank Ltd. (MBL.AU), holds a 52.0% stake in Brussels Airport and a 55.5% stake in Sydney Airport.

In addition, it owns smaller stakes in airport holding companies in Rome, Birmingham and Bristol in the U.K., and as of earlier this week, Copenhagen.

January traffic rose 10.8% at Rome's airport system and 13.2% at Bristol Airport, to 2.13 million and 298,000 respectively, Macquarie Airports said.

The only year-on-year decrease came at Birmingham where traffic slumped 2.2% to 533,000 passengers, it said.

-By Nicholas Sinclair, Dow Jones Newswires;

Qantas / Australian finds route around foreign crews cap
Scott Rochfort
21 February 2005
The Sydney Morning Herald

Qantas is looking to bypass an agreement that caps the number of cabin crew based overseas by hiring lower-paid Asian crews to work for its low-cost international subsidiary, Australian Airlines.

Just three months after Qantas avoided widespread industrial action by its 4000 international flight attendants over plans to establish a London crew base, Australian Airlines has told the Flight Attendants Association it wants unrestricted access to foreign labour.

Michael Mijatov, the secretary of the union's international division, said: "What they are saying to us is that they don't want any restriction at all."

Pay negotiations between the Qantas subsidiary and the union broke down last month.

The move represents the latest low in relations between Qantas and the union since the airline secretly trained hundreds of flight attendants as potential strike-breakers last year.

Relations appeared to be on the mend after the union agreed to Qantas's plans for the London base by lifting the cap on foreign-based crews from 370 to 870 overall last November.

Qantas expects to save $18 million a year - mainly from reduced hotel and meal bills - when it sets up the 400-strong London crew base next week.

Australian Airlines is not bound by the cap because it is considered a separate airline from Qantas.

When asked about the airline's plans to source flight attendants in Asia, a Qantas spokesman said: "There are no immediate plans to change the way Australian Airlines operates. However, to ensure the long-term viability of Australian Airlines, there cannot be restrictions placed on the airline's growth."

Australian Airlines has not specified in which countries it wants to establish crew bases.

The Flight Attendants Association is also resisting moves by the airline to force its flight crews to fly longer sectors without a substantial pay rise.

The union says Australian Airlines crews are already paid 40 per cent less an hour than their Qantas counterparts.

Qantas says the airline has a 25 to 30 per cent lower cost base overall.

Fears among unions of more Qantas jobs going overseas were fuelled last week when the carrier's chief executive, Geoff Dixon, said it needed to find "more efficiencies by putting more jobs offshore".

Despite Qantas cementing its reputation as the world's most profitable airline by reporting a 28 per cent lift in half-year profits to $458.4 million, Mr Dixon said the airline was competitively constrained by having 95 per cent of its heavily unionised 35,000 employees based in Australia.

Mr Dixon will meet unions this morning in Sydney, where he is expected to face intense questioning over the airline's plans to move jobs offshore.

While Mr Dixon played down reports last week that Qantas wanted to move about 7000 jobs offshore, he said: "If we want to be like more of our competitors, they probably have 70 per cent of their people in their home countries."

As part of its three-year program to cut $1.5 billion from its cost base, Qantas is looking to save $486 million from improved "labour productivity" by the middle of 2006.

Virgin eyes Qantas Pacific route
20 February 2005
Sunday Age

QANTAS could face a second assault on its most profitable international route, with discount airline Virgin Blue weighing whether it will seek to offer flights from Australia to the US.

Singapore Airlines has mounted an aggressive campaign to win Federal Government approval to provide daily flights to Los Angeles, and cabinet is due to consider its bid in the next few months.

As Deputy Prime Minister John Anderson today begins a week-long trip to Europe to argue for greater access for Australian airlines, Virgin Blue chief Brett Godfrey said his company was paying "close attention" to the Pacific route, although no decision had been made.

The airline is believed to be considering several international routes in the Asia-Pacific region.

"I would classify trans-Pacific flights as being in our region and it is certainly an opportunity worthy of close attention," Mr Godfrey said.

"It would be remiss of us if we didn't look at all potential opportunities."

But with Virgin the subject of a takeover bid by major shareholder Patrick Corp, Mr Godfrey is also playing down expectations of a quick decision.

"At this point long haul is probably a long shot," he said. "Virgin Blue is obviously not going to openly discuss any of its strategic options until such time as absolutely necessary."

Only Qantas and United Airlines provide a regular non-stop service from Australia to the US.

A report by investment bank JPMorgan said Qantas' most profitable route earned 15 per cent of the company's overall profit, and 41 per cent of the profit from its international operations despite accounting for 27 per cent of its international capacity.

The report, by transport analysts Simon Mitchell and David Wilson, predicted that if Singapore Airlines won its bid to operate a daily service from Sydney to Los Angeles, it could slash $44 million from Qantas' pre-tax profit.

A random search by The Sunday Age of Qantas online ticket prices for flights from Melbourne to London and Los Angeles found that it was generally 33 per cent more expensive to fly to America, even though the trip was up to nine hours shorter.

There is more competition on the "Kangaroo" route to London.

The price of a standard flexible economy ticket for a 23-hour flight to London started from $2328 while the same class of ticket for a 14 to 16-hour flight to Los Angeles started from $3116 - a difference of $788.

Qantas was asking $9855 for a business-class flight to London and $13,068 for a business-class flight to Los Angeles - a difference of $3213.

Qantas rejected claims there was insufficient competition on the US route. It is offering some economy fares from $1700, although the flight availability is limited and there are restrictions on the tickets.

Airlines and analysts were not prepared to predict the size of price falls if Qantas faced greater competition. Respected aviation analyst Peter Harbison from the Centre for Asia-Pacific Aviation said business travel would be "sensitive" and a target for a company such as Singapore Airlines. "I would expect there would be lower fares," he said.

In London this week, Mr Anderson will meet Richard Branson, who owns 25 per cent of Virgin Blue, and the Australian-born chief of British Airways, Rod Eddington. He will lobby British and European authorities to give Qantas greater landing rights in London and at other key European airports.

Some Government MPs see this as being a crucial trade-off in return for Singapore Airlines being given greater access. Qantas chairwoman Margaret Jackson and chief executive Geoff Dixon have been using their influence in Canberra to try to stop Singapore's claim.

Despite last week announcing a record half-year net profit of $458 million, up 28 per cent, Qantas has told the Government it faces several disadvantages compared with international competitors, such as higher rates of company tax.

"We don't subsidise air travel in Australia and that gives Qantas a real disadvantage," one minister said. "There have got to be other opportunities for Qantas. We've got to see how we can free up the Pacific route without terminally damaging Qantas, and that's always been the quandary."

The Government is considering staggered approval for flights by Singapore and not letting it fly the new A380 Airbus to Australia until Qantas has the aircraft.

Phillip Hudson owns Qantas shares.

Mystery illness grounds Virgin - Melbourne
Tansy Harcourt with AAP
22 February 2005
Australian Financial Review

Virgin Blue has been left reeling by the effects of a mystery illness that overwhelmed staff at Melbourne Airport yesterday, hospitalising 52 people and forcing the airline to cancel 62 of its flights.

The crisis follows a string of bad publicity for the airline, which has issued two profit downgrades in five months and faced criticism of its management strategy from its own shareholder and takeover suitor, Patrick Corp.

Melbourne Airport was forced to evacuate about 700 people from its southern terminal, which houses Virgin Blue and regional airline Rex, just after 10am after about 50 people complained of nausea, vomiting or loss of breath.

The incident caused delays across the country's air routes.

The was no indication last night of the cause of the incident.

The Melbourne Fire Brigade late yesterday was working on the theory that the problem might relate to a gas leak at the terminal, although extensive testing failed to reveal an abnormality.

"There is no contaminant or product. It might have been a volatile chemical that evaporated very quickly," the acting assistant chief fire officer on the scene, Peter Holmes, said.

The terminal was reopened last night after being given the all clear.

Virgin Blue's handling of the crisis was criticised by disgruntled passengers, who said they should have been offered vouchers to fly on another airline or had their tickets refunded.

Virgin Blue spokeswoman Amanda Bolger said company policy was to give credit vouchers of the same value as the ticket.

"We offer people credit shells or later flights if possible," she said.

Despite the chaos, marketing experts said the incident was unlikely to cause any long-term damage to the Virgin Blue brand.

"It depends whether the punter understands it was out of Virgin Blue's control," Interbrand CEO Sam Osborn said.

"They have a good track record on customer relations, so I don't think it will impact on the brand."

The crisis did not affect Qantas's terminal, but the airline reacted by putting on bigger aircraft and offering Virgin Blue passengers discounted tickets when available.

Virgin declined to comment on the financial impact.

OzJet - Formula One business airline to take off this year
22 February 2005
The Advertiser

FORMULA One team boss Paul Stoddart's new airline will take off in Australia this year, and be based in Adelaide.

OzJet will carry only business-class passengers and its first route is likely to be to Melbourne.

The Minardi team chief will fly into Australia today from England on board the carrier's first aircraft - a Boeing 737-200 taken from his European Aviation charter fleet.

The OzJet planes will carry the company's distinctive black and blue livery, incorporating a motor-racing chequered flag.

Fares are expected to cost about $200 one-way.

Today's announcement will also confirm that OzJet will use Melbourne Airport at Tullamarine, rather than Moorabbin airport.

The Advertiser revealed in November 2003 Mr Stoddart's plans for an Australian cut-price carrier but plans for a low-fare model were scrapped because of a crowded domestic market.

Instead, the airline will target the business market, which has fewer seats since the demise of Ansett and the conversion of many Qantas flights to one class. OzJet planes will have two seats each side of the aisle.

Civil Aviation Safety Authority spokesman Peter Gibson said the airline had not yet applied for its Air Operator's Certificate.

But he confirmed preliminary discussions between the authority and OzJet had taken place and a certificate could be approved within a few months.

The South Australian Government is believed to have provided incentives for OzJet to be based in Adelaide.

Virgin offers refunds but wants gas leak answers
Daniel Hoare, Steve Creedy
MATP
23 February 2005
The Australian

THE mysterious gas leak at Melbourne airport is expected to cost Virgin Blue more than $2million, after it offered cash refunds and free flights yesterday to furious passengers left stranded this week.

Investigators hope to identify by the end of the week the chemical substance that put 47 people in hospital and threw the travel plans of nearly 20,000 Virgin Blue and Regional Express passengers into turmoil.

Thousands of passengers converged on Virgin's south terminal at Melbourne airport early yesterday in a bid to fly out of the city, following delays forced by the terminal's closure on Monday for eight hours when 57 people experienced dizziness, nausea and shortness of breath. Virgin cancelled 82 flights on Monday and a further 20 yesterday as it struggled to cope with massive disruption to its network caused by the closure and its aftermath. Rex cancelled at least 16 services.

About 75 per cent of the airline's flights were back on schedule early last night. The other 25 per cent were running late but airline officials said everyone booked yesterday would get to their destination.

Virgin also announced it was offering a full cash refund or a flight credit coupon for all people who had switched to another airline, as well as a free flight for all passengers delayed for more than four hours.

Angry Virgin officials now want answers about the cause of the biggest daily disruption to services in the airline's history.

Air Services Australia, which co-ordinated the emergency response to the situation, originally suspected a food poising outbreak, but it later became clear that the outbreak was the result of an unidentified substance in the air.

Extensive testing by Metropolitan Fire Brigade investigators has failed to establish the nature or location of the substance. But airport spokesman Geoffrey Conaghan said he was confident it could be determined by the end of a two-day debriefing on the incident beginning tomorrow.

Victorian Premier Steve Bracks announced yesterday that Emergency Services Commissioner Bruce Esplin would conduct an inquiry into the incident, in which 47 people were taken to the nearby Northern Hospital for dehydration treatment and blood tests.

"We need to determine how the emergency response system operated," he said.

Angry passengers play the waiting game
SELMA MILOVANOVIC
23 February 2005
The Age

THEY had been waiting to fly out of Melbourne since Monday morning but even 24 hours later hundreds of Virgin Blue passengers were not going anywhere.

Travellers filed into the airline's check-in area at Melbourne Airport yesterday, only to face more frustration.

The airline was unable to deal with the backlog of people trying to leave Melbourne. Some frustrated Virgin Blue customers turned to Qantas for help.

By 8am, the queue of tired travellers waiting for flights snaked into the adjoining international terminal check-in area.

Perth couple Ralph and Sarah Longhorn and their sons Harry 3, and Charlie, 2, were relieved to finally check in their luggage around 10am yesterday for a 12.20pm flight to Perth with a three-hour stop in Adelaide.

Their return from Launceston, where Dr Longhorn had been working, began on Monday morning and the family were scheduled to be back in Perth a staggering 36 hours later.

Virgin Blue told the Longhorns about the Melbourne Airport gas leak before they left Launceston on Monday. The family stayed in a Launceston hotel overnight and arrived in Melbourne about 8am yesterday.

The Longhorns blamed poor communication from the airline for missing an earlier, direct flight to Perth at 10.10am yesterday. They said passengers had to repeatedly call the airline if they were to learn of flight changes.

"They (Virgin Blue) told a lot of lies. We got told yesterday that passengers flying out of Launceston could fly only to Melbourne, not Sydney. That's not true."

"We've had to pay for our hotel, a hire car and we've lost work for the day - we've probably lost about $1000 altogether," Mr Longhorn said.

He said Virgin Blue should have used other airports around Australia as a transit point for non-Melbourne connecting flights.

Sydney businessman Graham Patton was trying to organise a Qantas flight despite having paid $350 each way for his Virgin Blue Launceston-to-Sydney ticket.

"We've been told we can fly out (with Virgin Blue) at 9pm. That's just not on," he said.

Mr Patton, who flew in from Launceston with two colleagues yesterday morning, said the group spent the night in Launceston after they heard about the fumes incident in Melbourne.

"They (Virgin Blue) could have made a few announcements . . . people from each cancelled flight could have gone to separate queues. (Now) it's just a big, enormous queue with no breaks."

Brisbane resident Lisa Smart had been expecting delays when she arrived in Melbourne from her holiday in Launceston about 8.30am yesterday. Two hours later, Ms Smart, who had paid $300 for the round trip, was still sitting on the floor, where Virgin Blue staff had told her to wait, hoping to get a flight home.

"They told me my (connecting) flight had already gone and . . . they have designated employees to find us flights on Jetstar or Qantas," she said.

"I guess they are just going to have to find me a flight where I don't have to pay any additional money because I am not going to tolerate paying for a full flight to Brisbane," Ms Smart said.

Steffen and Marie Schuetze were preparing to spend a day in the city, having already paid for an overnight stay in Melbourne.

The Schuetzes said the Virgin Blue ground crew were reasonably helpful but it was impossible to get information from the airline on the phone or the internet.

State's tax trade-off enough to woo OzJet
Andrew McGarry, Steve Creedy, Additional reporting: Michael Bachelard
MATP
23 February 2005
The Australian

SOUTH Australia has won the battle to become the headquarters of OzJet, the nation's fourth domestic airline, by offering tax concessions worth less than $6million.

The economy-priced business class carrier will begin operations before August31, once it gains a licence to fly commercially.

Owner and Minardi Formula One boss Paul Stoddart said he hoped to lure full-fare-paying economy-class passengers and avoid a price war with other carriers after deploying up to six aircraft equipped with 60 spacious business-class seats.

Mr Stoddart -- who was listed by BRW magazine last year as having a net worth of $173million -- said $70million would be needed to set up the airline.

Premier Mike Rann enticed OzJet to Adelaide with a series of tax concessions said to be worth less than the $6million package offered in a failed attempt to lure Qantas's budget airline, Jetstar.

The Government will tie the package to a series of performance criteria, including jobs created within set time limits. The assistance would not be based on cash, but rather in kind.

"Rather than going down the approach of handouts, what we're offering is some payroll tax concessions ... that are actually very modest," Mr Rann said yesterday, adding that OzJet's decision would create about 300 jobs in Adelaide. The same number of new jobs would also be created in Victoria.

The airline would have a large call centre in Melbourne, and maintenance would be done in the former Ansett maintenance hangar.

Initially, OzJet will fly from Adelaide to Melbourne, Canberra and Sydney, as well as Melbourne-Canberra and Melbourne-Sydney, with up to eight flights a day between capital cities. It plans to begin services with six aircraft but hopes to expand to 10 by next year as it branches out to cities such as Perth and Brisbane.

Mr Stoddart said he did not believe the product would threaten Qantas's business-class market and that OzJet would take only a single-digit market share, even at full capacity.

Macquarie Airports Flags Rising Traffic In 2005
By Nicholas Sinclair
23 February 2005

SYDNEY (Dow Jones)--Emboldened by a strong showing in 2004, Australia's Macquarie Airports (MAP.AU) said Wednesday it expects continued growth in 2005, predicting airlines will keep adding seats.

"We expect traffic will continue to grow at all our airports, assuming no external shocks," Chief Executive Kerrie Mather said, after announcing a net profit for 2004 that more than doubled from 2003.

"This growth will be driven by increased airline capacity across all sectors and extensive airline marketing initiatives undertaken at the airports," she added.

The airports operator, an offshoot of Macquarie Bank Ltd. (MBL.AU), owns majority stakes in the Sydney and Brussels airports, with smaller positions in the Birmingham and Bristol airports in the U.K and in the corporation that controls Rome's two airports.

In addition, it recently announced the purchase of 11.3% of Copenhagen Airports (KBHL.KO).

Earlier Wednesday, Macquarie Airports reported a net profit of A$864.6 million for 2004, up from A$340.4 million in 2003. It declared a dividend of 12 cents per share, 4 cents above the previous year's dividend.

The profit result beat expectations, although the difference was partly driven by non-cash revaluations, Credit Suisse First Boston analyst Peter Meany said in a note to clients.

Nonetheless, both Meany and John Veldhuizen, from Australian brokerage BBY, agreed the outlook for Macquarie Airports remains positive. Both think the listed investment vehicle will soon boost its 2005 distribution guidance from the current 17 cent per share forecast.

"We'd be very surprised if the dividend (forecast) wasn't increased," Veldhuizen said, adding BBY is more bullish than most brokerages with its prediction that the 2005 distribution will be 20 cents per share.

Despite the positive outlook, Mather suggested Macquarie Airports is unlikely to make any further acquisitions in Europe in the near future.

"There's nothing actually out there in the market at the moment, there are no privatization processes underway," she said, explaining that the airport fund is currently focused on integrating last year's Brussels acquisition.

While Mather added that she would keep an eye on potential longer term opportunities in Europe, citing eastern Europe and regional France, for now Macquarie Airports looks set to consolidate its existing investments as it reaps the benefits of an evolving aviation sector.

While many airlines around the world continue to record staggering losses, analysts say trends favor continued growth in air travel.

"The economy is strong, and we know when the economy is strong, air traffic is very good," Veldhuizen noted.

He added that the industry is also witnessing "quite a revolution" with the emergence of low-cost carriers resulting in a growing number of passengers passing through the world's airports.

Those factors "point to continuing buoyant conditions" for Macquarie Airports, said Veldhuizen, who has a 'Buy' rating and values it at A$4.19 per share.

Macquarie Airports closed up 2.2% at A$3.24, while Australia's benchmark S&P/ASX 200 ended down 0.8%.

-By Nicholas Sinclair

Planes miss with only 40m to spare over Western Australia
19 February 2005
The Australian

TWO passenger aircraft came within a whisker of colliding when they passed each other travelling at a combined converging speed of 650km/h or more above the clouds in Western Australia last year.

Just 40m separated the 30-seater Brasilia and the six-seater Partenavia flying near Kununurra, in Western Australia's far northeast, in mid-July.

The incident occurred because the Partenavia pilot had not used the right radio frequency to communicate with other pilots in the area, an Australian Transport Safety Bureau (ATSB) investigation has found.

The Brasilia was descending towards Kununurra airport from Darwin at 9500ft when the Partenavia passed it travelling in the opposite direction.

Despite good visibility, the speed of the pass was such that the Partenavia pilot did not even see the Brasilia.

The aircraft were in uncontrolled airspace -- where pilots must communicate with each other and no third party is directing traffic -- when the incident occurred.

The Brasilia's pilot had put out a message on the local radio frequency broadcasting its position and flight path, but the Partenavia was communicating on a different frequency and neither heard the other's dispatch.

The ATSB described the incident as "serious".

"The ATSB investigation found that, had the Partenavia pilot selected the appropriate area frequency for the Kununurra region, he may have been alerted to the inbound Brasilia," the ATSB said in its report.

The Opposition has accused federal Transport Minister John Anderson of having the wrong priorities when it comes to air safety.

Australia's Virgin Blue Filled 77.7% Of Seats In Jan
23 February 2005

SYDNEY (Dow Jones)--Australian discount carrier Virgin Blue Holdings Ltd. (VBA.AU) Thursday said it filled 77.7% of seats in January, compared with 84.8% a year earlier.

The company said its load factor in the first 10 months of its current fiscal year ending March 31 is 76.6%, down from 83.3% a year earlier.

The company, which is subject to a hostile A$1.90 a share takeover bid from major shareholder Patrick Corp. (PRK.AU), said it had 49 aircraft in its fleet last month, compared with 40 in January 2004.

It also said the number of passengers carried rose 15% to 1.12 million in January this year, compared with 975,000 a year earlier.

Virgin Blue shares were flat at A$2.03 in early afternoon trading.

Bad food may be cause of airport chaos
24 February 2005
Daily Telegraph

FOOD contamination has been investigated as a possible cause of the mysterious outbreak of illness at Melbourne airport this week which disrupted Virgin Blue flights and stranded 15,000 people around Australia.

Health Department officers yesterday checked an airport cafe at the request of police.

Police originally believed a gas or chemical leak was most likely responsible for the chaos.

But Melbourne airport CEO Chris Barlow said emergency services investigators spent 10 hours combing the terminal building.

"And surprise, surprise, they found nothing, because we think there is nothing," he said.

"There's no gas leak, no chemical leak."

About 60 people were treated for dizziness, nausea, breathing problems and vomiting and admitted to hospital for observation on Monday. Many Virgin Blue flights were effectively grounded.

The airline said services had returned to normal yesterday and it was helping passengers affected.

Billboard beards the Virgin sky
Julian Lee
26 February 2005
The Sydney Morning Herald

Virgin Blue has beaten rival Jetstar to become the first Australian airline to convert the fuselage of one of its planes into a flying billboard.

Yesterday Virgin Blue unveiled one of its Boeing 737s in the livery of shaving giant Gillette, which branded the fuselage in the black and green of its new battery-powered razor, the M3 Power.

Last year the Herald revealed Jetstar was touting its Boeing 717 planes for $1 million apiece to advertisers but to date no deal has been signed.

"We're also looking at aircraft logo advertisement," said Jetstar CEO Alan Joyce. "ACP [its media partner] are currently marketing the concept but we'll only work with a partner that fits with the Jetstar brand."

Neither Virgin Blue nor Gillette revealed the financial terms of the initial three-month deal but Virgin wants to offer its remaining 48 planes to other advertisers that are a "good fit" with its brand.

Virgin Blue chief commercial officer Stefan Pichler is willing to work with any category, beer included, as long as an advertiser is compatible with the Virgin brand.

"We're looking at this as a separate revenue source," he said. "It's all about the brand - we will assess any potential partner to see if it fits with the Virgin brand."

The company says it has knocked back approaches from several potential advertisers.

Although the flying billboard is an untried and untested medium in Australia, the shaving giant likes to strike a mould-breaking pose when launching a new product. Two years ago it paid tolls for Melbourne and Sydney drivers for the launch of another razor.

Gillette's advertising agency, Clemenger BBDO Melbourne, put the idea to Gillette executives last June and approached Virgin two months later. Both say it was a marriage made in marketing heaven. "We went straight to Virgin and no one else," said Gillette regional manager John Bower. "We like to see ourselves as innovative, much like Virgin."

The deal capped a bad week for Virgin Blue; a gas leak at Melbourne airport on Monday led to the closure of the airport and the cancellation of 82 of its flights.

Mr Pichler would not comment directly on what impact the debacle would have on the company financially but said: "Anything that disrupts our customers has an impact on us."

Monday February 28, 12:58 AM
Independent directors of Australia's Virgin Blue reject Patrick Corp bid

SYDNEY (AFP) - Independent directors of Australian airline Virgin Blue recommended that shareholders not accept a 1.90 dollars (1.49 US dollars) a share cash offer for the discount carrier from its largest shareholder, Patrick Corp Ltd.

Patrick Corp, which already holds 45.4 percent of Virgin Blue, made a surprise bid a month ago for the remainder of the shares, valuing the company at 1.99 billion dollars (1.56 billion US dollars).

In a statement headlined "Don't Do It", the directors said an independent expert's report has assessed Virgin Blue's shares to be worth 2.43 dollars to 2.90 dollars, representing a premium of 27.9-52.6 percent to Patrick's offer.

The directors said the independent valuation represented the full, underlying value of Virgin Blue's shares and also included a premium for control.

Patrick made its bid after Virgin Blue issued a profit warning because of lower than expected passenger numbers.

The warning triggered slide in the value of Virgin Blue's shares which were at 1.80 dollars when Patrick made its offer on January 28.

The independent directors said Patrick's offer was timed to take advantage of the current share price weakness and enable it to acquire Virgin Blue without adequately compensating shareholders for foregoing the potential of their investment in the company.

Virgin Blue's other big shareholder, British entrepreneur Richard Branson's Virgin Group, increased its stake in the company to 25.1 percent from 24.1 percent immediately after Patrick launched its offer, paying an average price of 2.04 dollars a share.

Virgin Blue, which was launched by Branson just before the 2000 Sydney Olympics, was listed on the Australian Stock Exchange in December 2003 after an initial public offering of its shares at 2.25 dollars each.

Virgin Blue shares were trading up three cents at 2.07 dollars shortly after the stock market open higher here Monday.

Qantas plans to axe 3000 jobs
Tansy Harcourt
1 March 2005
Australian Financial Review

* Competition forces cost cutting * Catering, holidays may be floated

Qantas plans to axe as many as 3000 jobs in the next two years following a sweeping review of its operations designed to slash costs and boost productivity as the airline braces for a sharp increase in competition.

Senior executives have started work on the review, dubbed "Simplifying the Business", which could lead to Qantas axing about 10 per cent of its 30,000-plus workforce as part of a new cost-cutting drive.

The airline will also reconsider whether individual businesses such as Qantas Holidays and Qantas Catering should be spun off through sharemarket listings, and whether certain maintenance and IT divisions should be closed or sold.

But news of the review is likely to further anger unions, which have already criticised the company's move to seek cost savings by relocating flight attendants offshore.

Qantas is battling high oil prices and soaring competition in the international aviation market as US airlines emerge from bankruptcy with lower cost structures and other rivals push for regulatory changes to allow them to fly routes that are dominated by Australia's flagship carrier.

The federal government is considering granting Qantas's arch rival, Singapore Airlines, the right to fly on the lucrative route between Australia and the US, which represents 10 per cent of Qantas's profits.

Intense competition on its trans-Tasman operations has also seen Qantas go from reporting a profit to a loss on the route between New Zealand and Australia.

In the domestic market, Qantas is bracing for a renewed assault from discount carrier Virgin Blue if Chris Corrigan's Patrick Corporation is successful in its $1.1 billion takeover bid for the airline.

Chief executive Geoff Dixon said earlier this month that Qantas's 28.1 per cent increase in interim net profit was not good enough and warned it was still failing to return its cost of capital and needed to be run as "a normal industrial company" to meet investor expectations.

If Qantas slashes as many as 3000 jobs, it may result in the airline having to take a one-off charge of about $100 million for redundancy payments.

It is understood the findings of the review will be delivered to the Qantas board of directors at the airline's annual strategic planning meeting in May.

Cost savings targeted in the new "Simplifying the Business" review are on top of cuts announced in 2003 in the "Sustainable Future" program. That initiative was designed to reduce operating expenses by $1.5 billion over three years, one of the biggest cost-cutting drives by an Australian company.

That review coincided with about 3000 jobs being cut. About a third of the employees were retrenched, and the rest were lost through attrition and a shift between full-time and part-time work. It is likely the next round of job cuts will be achieved in a similar manner.

The "Sustainable Future" program's cost savings are on track, with the final $500 million to be achieved this financial year.

While the program delivered $245 million in savings during the first half, the airline revealed a 5.5 per cent increase in staff costs, a figure that disappointed some investors even though it was accompanied by an 11 per cent increase in revenue and a 4 per cent drop in unit costs.

The new review is determining where expenses can be lowered through either better processes or outsourcing to meet the airline's new target of a 10 to 15 per cent drop in unit costs over the next two years.

Mr Dixon and Qantas chief financial officer Peter Gregg have held meetings with staff and union officials over the past fortnight to warn that "further efficiencies" needed to be found.

Neither was available for comment yesterday.

Qantas last week reported net earnings of $458.4 million for the six months to December 31 and is forecast to deliver its highest full-year profit of about $740 million.

In the domestic market, the introduction of budget carrier Jetstar last May has halted the march of Virgin Blue and lowered the airline's domestic operating costs.

Jetstar produced higher than expected earnings before interest and tax of $19 million in the first half, while Qantas's mainline domestic carrier also increased yields because it no longer operates on the low-margin leisure routes and can focus on the business market.

But in the international market, the Singapore government is mounting a major push for its flagship carrier, Singapore Airlines, to gain access to the lucrative route, ending 10 years of negotiations.

Qantas has estimated that its pre-tax earnings might fall by $44 million should Singapore Airlines be allowed to fly between Australia and the US.

Even if the federal government does decide to retain its ban on allowing Singapore Airlines' entry to the Australia-US market, then it is likely that Virgin Blue will start a joint-venture airline, perhaps with Singapore Airlines, to fly the route itself in the next few years.

Qantas is spending at least $US4 billion replacing its ageing core fleet of 747s with new long-range aircraft to improve efficiencies on its international routes and counter competition from major rivals. The cost of the new planes will be on top of the $18 billion Qantas has foreshadowed it will spend to modernise its remaining fleet.

Qantas staff cuts inevitable despite $458m profit
Scott Rochfort and Nick O'Malley
02 March 2005
The Sydney Morning Herald

Just two weeks after posting a record half-year profit, Qantas says further cost cutting and restructuring across its operations is inevitable and "could involve some redundancies".

Following reports up to 3000 of its 35,000 Australian workforce might face the sack within the next two years, Qantas would not give a number of potential job losses, noting it only started a three-month review of its operations.

"We're only two weeks into the three months so it's obviously too early to say what the outcomes of that review will be," a Qantas spokesman, Michael Sharp said.

Qantas last month repeated the need to become more efficient and competitive when the chief executive, Geoff Dixon, said the airline would "conduct a review of processes and activities with a focus on processes that can be removed or redesigned". At that time Mr Dixon said the 28 per cent increase in Qantas's first half net profits to $458.4 million was "not good enough for a normal industrial company".

In a statement yesterday, Mr Dixon said the review could result in "new jobs and greater opportunities in other areas".

With Qantas pushing to base more employees abroad, unions have reacted angrily to the fresh reports of potential job losses. The Australian Services Union's assistant national secretary, Linda White, said the airline was instilling fear into its workforce.

An industrial officer for the Australian Council of Trade Unions, Richard Watts, said Australian staff "would do whatever is necessary to save their jobs", but industrial action was not on the cards yet.

"We hope we can settle this through discussions," he said.

But he said there was no justification for overseas outsourcing while Qantas's wages increased by less than the average of 3.5 per cent a year, lower than executive pay.

Lightning strands flights at airport
Nadia Jamal and Alex Smith with Gerard Noonan
4 March 2005
The Sydney Morning Herald

Thousands of passengers were stuck in planes at Sydney Airport last night because ground staff do not work on the tarmac when there is lightning.

The airport said about a dozen domestic and international flights were caught in the delay, but Qantas said almost 40 of its planes were affected.

It is understood that some passengers were forced to stay in the planes for more than an hour. There were also big queues of frustrated passengers at check-in counters.

A spokeswoman for the airport, Shannon Kliendienst, said that airlines had a policy that no ground staff would work outside when lightning threatened.

A weather warning was issued at 6pm yesterday and lifted at 7.30pm after a series of electrical storms swept through the city.

"There's not much you can do about the weather," Ms Kliendienst said. "When there's bad weather, people are quite used to the fact that they can't do anything about it."

One passenger whose plane was stranded on the tarmac for more than hour said that the captain had announced that there were lightning strikes within a five-kilometre radius of the airport. This meant that no staff would handle ground equipment for flights either landing or taking off.

Qantas said that 33 domestic flights could not park or take off, while six of its international flights were stranded. Failing electricity infrastructure in NSW has led to a sharp rise in the length of blackouts, according to government data obtained under freedom of information laws.

Twelve substation failures last year blacked out up to 3 million people for a total of 30 hours across the state. In 2003 blackouts lasted a total of 13 hours, and in 2002 households and industry were blacked out for a total of 8.9 hours.

The Opposition energy spokesman, Brad Hazzard, who obtained the data, said substation failures had seen the length of blackouts increase over the period. He called on the Government to speed investment in electricity infrastructure and stop gouging dividends from the power industry.

A spokeswoman for the Energy Minister, Frank Sartor, said the figures did not represent blackouts because electricity suppliers were often able to route power around a failed substation.

But his office conceded that the average length of substation outages rose from 72 minutes in 2002 to 86 minutes last year.

Storms ahead as city goes troppo
Alexandra Smith - Transport Reporter
5 March 2005
The Sydney Morning Herald

At some airports fog is to blame, at others it is snow but in storm-prone Sydney, it is electrical storms and lightning strikes that are likely to delay your flight and leave you stranded on the tarmac.

Airlines - including Qantas, Jetstar and Virgin Blue - refuse to allow their ground staff to handle baggage, refuel aircraft or work outside during an electrical storm.

And with changing weather patterns, Sydney can expect more storms and more delays, with a Bureau of Meteorology thunder map showing that NSW, and particularly Sydney, is regularly struck by storms.

The northern tips of Australia are hit by about 80 storms a year, the map shows, but Sydney is as prone to storms as Cairns, Port Hedland and Alice Springs, experiencing about 25 storms a year, or two a month.

A spokesman for Qantas, Simon Rushton, said the long-standing lightning policy was to ensure the safety of all ground staff and was applied to all airports in Australia.

Thousands of passengers were stuck in planes on the tarmac or were unable to board their flights at Sydney Airport on Thursday night after a major thunderstorm caused workers to down tools.

More than 40 Qantas domestic and international flights and several Virgin Blue flights were delayed because of the storm.

An airport organiser from the Transport Workers Union, Glenn Nightingale, said he supported the airlines' policy because electrical storms were potentially fatal for outdoor workers.

"This is not a union thing, it is a WorkCover and Occupational Health and Safety Act 2000 issue, as well as just commonsense," he said.

"But I support the airlines because you can just imagine what could happen if someone was out there refuelling or loading baggage in a big electrical storm."

Shannon Kliendienst, Sydney Airport's media manager, said it was up to individual airlines to enforce this policy, while a spokeswoman for Melbourne Airport, Brooke Lord, said ground staff left the tarmac as soon as a storm was detected within a nine-kilometre radius of the airport.

A bureau meteorologist, Julie Evans, said NSW experienced as many storms as some of the tropical areas of Australia, such as far north Queensland.

Ms Evans said lightning was an electrical feature of all thunderstorms, caused by powerful currents of air in thunderstorm clouds that lead to a separation of electrical charge.

The differences in electrical charge in the cloud, and between the atmosphere and ground, can be so large that lightning flashes in an attempt to even out the charge difference, Ms Evans said.

The bureau follows American safety guidelines, which suggest heading indoors when the first clap of thunder is heard and staying there until 30 minutes after the last one is heard.

Virgin breaks one-class mould in business push
Clive Mathieson, Business editor
7 March 2005
The Australian

VIRGIN Blue, famed for its one-class discount fare model, will launch its first business class service today as it seeks to wrest more corporate travellers from arch-rival Qantas.

Virgin Blue's new Blue Plus service will not be called business class, but will offer travellers a range of additional services on full-fare trips.

These include seats at the front of the cabin, where there is already up to 5cm more legroom than at the rear, extra luggage allowances and priority check-in.

Virgin Blue customers flying on the new top-rate "fully flexible" fares will also be offered full refunds on cancellations, less a $30 administration charge. Until now, customers who cancelled have been offered a replacement flight within 12 months.

However, Virgin Blue is still holding out on the introduction of a frequent-flyer program to rival Qantas and its low-cost offshoot Jetstar, which said last week that customers on its fully flexible fares could earn Qantas points.

Blue Plus travellers will have to pay for their own food and drink, like Virgin's other passengers.

The new class of ticket breaks with the one-class discount model Virgin has championed since its launch in 2000.

Chief executive Brett Godfrey said the changes were in response to feedback from business travellers, with Virgin now claiming more than 1000 corporate travel accounts.

"We expect Blue Plus to attract new Virgin Blue flyers and we will continue to lobby for an increasing share of business from Australian corporations and government organisations," Mr Godfrey said.

The changes come as Virgin Blue faces increasing competition from Jetstar and a slowdown in its business that caused a heavy profit downgrade in January. The subsequent slump in share price prompted a $2 billion takeover bid from Chris Corrigan's Patrick Corp, which already owns 46 per cent.

The bid has been rejected by Virgin Blue and Richard Branson's Virgin Group, which holds 25 per cent.

The Virgin Blue business push also comes as Paul Stoddart, the Australian-born entrepreneur who runs the Minardi Formula One racing team, prepares to launch his OzJet service later this year. OzJet, which is aiming for a single-digit market share, will offer only business-class services.

Flights are likely to cost the same as fully flexible economy fares on other airlines -- about $320 each way on the key Sydney-Melbourne route.

A Qantas spokesman said the airline could not comment on the Virgin Blue business offer without seeing details, but said Qantas offered "the most comprehensive range of flights and services for business travellers in Australia, including frequent two-class services between major destinations".

Safer cheaper system than radar
8 March 2005
Hobart Mercury

A NEW radar-like surveillance system being progressively established across Australia will improve air safety.

Twenty-eight of the Automatic Defendance Surveillance Broadcast systems were being established over the next 18 months.

The Royal Federation of Aero Clubs of Australia's annual flying training conference in Hobart yesterday was told the new system to cover Tasmania would be installed in November at Mt Barrow east of Launceston.

Each system costs $200,000 to $300,000, depending on site conditions, compared to $6 to $10 million for a radar system.

Airservices Australia (the National Air Traffic Control Corporation) acting CEO Hisham El-Ansary said the system received signals from an aircraft via satellite to provide positional information to an air traffic controller.

The systems would provide surveillance across the whole Australian continent above 30,000 feet, which had not been possible before.

He believed Australia would be the first country to introduce this type of technology on this scale.

Virgin Blue worries hit shares
Scott Rochfort
11 March 2005
The Sydney Morning Herald

Fears of another Virgin Blue profit downgrade were heightened yesterday after the budget airline said it could not "quantify reliably" its profit outlook beyond March 31.

Putting a further dent in the airline's campaign to fend off Patrick Corp's $1.90 a share takeover bid, Virgin Blue's interim chairman David Ryan warned in a statement that "difficult market conditions, including high fuel prices and excess capacity may persist".

That, compounded with signs the Australian economy - and passenger demand - could be headed for a sharp downturn, sent the airline's shares down to $1.92 - their lowest since Patrick launched its late January takeover bid - before closing 4c lower at $1.94.

In the wake of two profit downgrades in recent months, the supplementary target statement by the airline yesterday did little to appease concerns about Virgin Blue's future.

On Wednesday, Macquarie Equities analyst Paul Huxford issued a note warning that his profit forecasts for Virgin Blue were under review.

On signs that the domestic market was already struggling to absorb Virgin, Qantas and Jetstar's recent rapid fleet expansions, Mr Huxford said his forecast of Virgin posting a $165 million net profit in the 12 months "could easily" be cut to $140 million.

The release of an independent expert's report last Monday valuing Virgin Blue at $2.43 to $2.90 has failed to fire up the carrier's share price.

The only investor appearing upbeat about the airline's future yesterday was Sir Richard Branson, who already lifted his stake in late January in order to frustrate Patrick's bid.

Sir Richard's Virgin Group confirmed last night that it had lifted its stake to 25.6 per cent after snapping up an additional 5 million shares at $1.95 each.

A Virgin Group spokesman said: "We see the long-term value of the company as much higher."

But Virgin's case was not helped by the resignation on Wednesday night of Virgin Blue co-founder and deputy chief executive Rob Sherrard.

It had been rumoured publicity-shy Mr Sherrard had been looking to quit since the airline appointed the former general manager of Air New Zealand's Pacific operations, Andrew David, as chief operating officer last October.

"It's certainly not a shock resignation," the airline's manager for public affairs, Heather Jeffery, said.

"There's nothing Machiavellian about the timing," she said.

Mr Sherrard was not available to comment on whether he planned to sell his stake in the airline, which according to the 2004 annual report was 7 million shares, or 0.7 per cent.

Mr Sherrard will also leave behind his fat salary package, which last fiscal year totalled $6.2 million - including $5.8 million worth of options.

The timing of Mr Sherrard's departure has not been interpreted as a major vote of confidence in the airline's future and its campaign to resist Patrick head Chris Corrigan's bid to lift his 46 per cent shareholding above 50 per cent so he can gain outright management control.

Legend has it Mr Sherrard and Virgin Blue's chief executive Brett Godfrey drunkenly conceived their plans to establish the airline on the back of a beer coaster in a London pub during the 1993 Ashes Test series. Mr Godfrey started his aviation career as an accountant for National Jet, an air charter business Mr Sherrard founded in 1984.

DHL Opens US$15 MLN Cargo Facility at Sydney Airport

SYDNEY, March 14 Asia Pulse - Logistics company DHL today opened a $A20 million ($US15.85 million) export facility at Sydney Airport, as it anticipates further free trade agreements between Australia and its trading partners.

The air express cargo facility, dubbed Oceania Hub, is the largest of its kind in the Asia Pacific region, with the capacity to move over 90,000 kilograms of freight each day.

DHL said it was hoping to benefit from increased international trade following Australia's free trade agreement with the US, as well an expected deal with the Association of South-East Asian Nations (ASEAN).

"Recognising the potential for further growth, DHL has implemented a business strategy that has focused on capacity building," DHL Express regional director Gary Edstein said.

"Given the scope of recently adopted free trade agreements and ongoing negotiations between ASEAN nations for trade liberalisation, both these facilities are great news for Australian organisations looking to further their business through overseas trade."

Trade Minister Mark Vaile, who opened the new building, said the Australian export industry hinged on private sector infrastructure investment.

"This is crucial to maintain our competitive advantage against other competitors in the international marketplace," he said.

"This is a fantastic instalment to continue to erode away the disadvantage of the tyranny of distance from some of our markets."

DHL is also expecting to inaugurate new hubs in Perth and Darwin over the coming months.

Patrick Corp extends Virgin Blue offer to March 22

SYDNEY, March 15 (Reuters) - Australian transport group Patrick Corp. Ltd. (PRK.AX) said on Tuesday it has extended its proposed A$1.1 billion ($866 million) takeover offer for discount airline Virgin Blue Holdings Ltd. another week.

Patrick said a wholly owned subsidiary, Plzen, "has today extended the offer period in relation to its bid for the shares in Virgin Blue Holding Ltd. to 7 p.m. Sydney time (0800 GMT) on 22 March, 2005".

Patrick made its offer in January, nine days after Virgin Blue warned its annual profit would fall as much as 15 percent due to sluggish demand and a price war with Jetstar, the no-frills offshoot of Qantas Airways Ltd. (QAN.AX).

On Feb. 28, the independent directors of Virgin Blue said shareholders should reject the offer, citing an independent expert's report it commissioned that valued Virgin Blue shares at A$2.43 to A$2.90 - at least 28 percent above the A$1.90 a share Patrick offered for the 54.6 percent of Virgin Blue it does not already own.

Patrick has said analysts subsequently valued Virgin at A$1.51 to A$2.20 a share, averaging A$1.84 per share.

Virgin shares closed down 1.6 percent at A$1.90, before the Patrick announcement.

($1=A$1.27).

Ozjet chief rules out price war
Kevin Andrusiak
MATP
16 March 2005
The Australian

AUSTRALIAN-born airline entrepreneur Paul Stoddart flew into Sydney yesterday on his new Ozjet service, promising not to start a price war with Qantas and Virgin Blue in the corporate traveller market.

Mr Stoddart, also known for his ownership of Formula One team Minardi, plans to introduce Ozjet in August, capturing a niche market of business travellers intent on extra legroom and up-market service.

He has spent $30 million to get the airline to this stage.

Ticket details released yesterday showed a Sydney-Melbourne return flight would cost $598 in a specially fitted but ageing Boeing 737-200. Mr Stoddart said that at 50 per cent full, an Ozjet flight would still be profitable.

"We are offering something that I don't think is a threat to our competitors," Mr Stoddart said. "We don't have ambitions to take on the big boys. We are just someone looking to take a modest market share. No one wins in a price war."

The proposed Ozjet price compares with full-fare prices on Virgin Blue and Qantas of between $460 and $660 for a return Sydney-Melbourne flight. Business class seats on Qantas can cost more than $1000 return.

Ozjet still needs approval in a number of areas from the Civil Aviation and Safety Authority, including ticketing, before a planned August start on routes between its base in Adelaide and Melbourne and Sydney.

Ozjet will aim for a 10 per cent market share in the corporate traveller sector by March next year, when it introduces routes to Perth, Brisbane and Hobart. But a price war is exactly what Ozjet could find itself in come August.

Earlier this month Virgin Blue, famed for its discount fares, launched a pseudo-business class service aimed at the corporate traveller, offering fully refundable tickets and seats at the front of the plane where there is extra legroom.

Qantas will also be keen to shore up its stake. Executive general manager John Borghetti said his company would work very hard to protect its interests. "We are busy running our own company but we are very competitive (in the business flyer market)," Mr Borghetti said.

Qantas Airways Adds Fourth Sydney-London Flight via Hong Kong

March 16 (Bloomberg) -- Qantas Airways Ltd., Australia's biggest airline, added a fourth weekly service flight from Sydney to London with a stopover in Hong Kong.

The extra flight will begin Nov. 13 and takes the number of Qantas flights between Australia and the U.K. to 28 a week, Executive General Manager John Borghetti said in a statement faxed to Bloomberg News.

Sydney-based Qantas has approval to fly a further three flights to the U.K. through Hong Kong from April 2006, which would allow for daily services on the route, the company said.

Qantas shares rose 1 cent to A$3.59 at 2:22 p.m. in Sydney.

Qantas boosts capacity to UK

(The Australian)
March 16, 2005
QANTAS today said it would increase capacity on the so-called kangaroo route between Australian and the United Kingdom by adding a fourth weekly service.

The extra flight from Sydney to London via Hong Kong will begin November 13.

It will bring the total number of Qantas services between Australia and the UK each week to 28.

Qantas Executive General Manager John Borghetti said it was the second time since in four months that capacity had been added to the Sydney/London route.

"A key part of the Qantas group strategy is to increase capacity to key markets, including the UK, and we have been very pleased with the performance of these new services," he said.

Qantas had added nearly 2,300 seats each week between Australia and the UK and Europe since last November.

"This new service will add another 380 seats and further establish Hong Kong as a great stopover option for Australian travellers alongside Singapore and Bangkok," Mr Borghetti said.

Qantas also has approval to operate a further three services to the UK via Hong Kong from April 2006, enabling the airline to offer daily flights on the route.

The new QF29 service will depart Sydney on Sundays and be operated by three-class Boeing 747-400 aircraft which feature the award winning Skybed sleeper seat.

The three existing QF29 services operate on Tuesdays, Thursdays and Saturdays.

Having a laugh? It'll cost you
Jokes about a 'bomb in the luggage' are now a criminal offence at airports
Greg Ansley Australia correspondent
15 March 2005
New Zealand Herald

CANBERRA - Security officials at Australia's airports are now required by law to have no sense of humour.

Under tough new aviation security legislation the check-in warnings, saying airline staff take jokes about bombs seriously, will be replaced by criminal charges that could see fines of up to A$5500 ($5884) for even the most offhand one-liner.

Quips such as "it's only a machine gun" when asked if you are carrying any dangerous goods will not be tolerated.

The new laws do not permit officials to distinguish between humour and real threats.

"These sorts of jokes distress passengers and staff," Transport Minister John Anderson said.

"They are expensive to deal with and cause delays, because we have to take them seriously and carry out searches just in case they are not in fact jokes.

"If you are stupid enough to make joke threats about aviation security, you won't just miss your flight - you could end up with a A$5500 fine and a criminal record."

The dour approach to misplaced levity is part of a new package of laws to tighten even further the security that has steadily increased at Australian airports since the September 11 terror attacks.

Measures include hardened cockpit doors on airliners, armed air marshals on many flights and special funding to boost security for 144 airports and more than 100 air service operators.

All airlines are now required to train flight and cabin crews in self- defence and the use of "non-lethal protective devices".

Close screening of passengers and luggage now extends into the small services for rural and regional Australia. Airportswithout full screening equipment must train staff to use hand-held screening wands. All staff at airports handling regular passenger flights must undergo security screening.

Qantas tells cabin crew to sit down as talks hit turbulence
Scott Rochfort
16 March 2005
The Sydney Morning Herald

Relations between Qantas and its cabin crews have deteriorated sharply after the carrier's Australian Airlines subsidiary sidelined the Flight Attendants Association of Australia over enterprise agreement negotiations.

With Australian Airlines having recently trained a team of non-unionised strike-breaking crews, it now faces an increased threat of industrial action from its 300 Cairns-based flight attendants after cutting off discussions with the union.

Qantas's executive general manager of people, Kevin Brown, said yesterday the airline was now evaluating several alternatives to negotiating with the FAAA.

He declined to say whether this meant putting Australian Airlines' flight attendants on non-union workplace agreements.

"We're still hopeful we can reach an agreement with our employees," he said. "We have withdrawn our offer. We told them [the union] that this was going to be the case on Friday."

The offer included permitting Australian Airlines access to lower-paid foreign flight attendants and the removal of restrictions that bar the airline's crews from working in business class and on aircraft other than 767s.

Following comments by the Qantas chief executive, Geoff Dixon, last month over the FAAA's poor skills in representing its members, Mr Brown said: "The last month has only reinforced our views about that group."

Mr Brown said the sidelining of the union was mainly a result of the FAAA's poor communication skills, noting that after last Friday's deadline the airline "had heard zip" from the union until yesterday afternoon when a fax was received.

When asked about the strikebreakers Australian Airlines trained in Melbourne and Sydney last month, Mr Brown said the airline had "contingencies in place" so its 50-odd weekly flights were not disrupted.

The head of the FAAA's international division, Michael Mijatov, said the Australian Airlines offer was a "dud deal", noting that the airline's cabin crew got 40 per cent less pay than their Qantas counterparts. He said the talks broke down due to Australian Airlines giving the union an ultimatum - without negotiating.

"We're not threatening any industrial action yet. We just want to talk to them," Mr Mijatov said

"We have to wait and see their next move. We're not going to sign off on this deal and our membership have told us not to sign off on it."

The union says it is concerned the rights of Qantas's 4000 long-haul flight attendants could be seriously eroded in the next round of enterprise bargaining talks in 2007 if it gives in to all of Australian Airlines' demands. Mr Mijatov said Australian Airlines' move to excommunicate the union displayed its "utter contempt for their cabin crew".

Business Times - 16 Mar 2005

Qantas joins SIA in fare slashing

By VEN SREENIVASAN

(SINGAPORE) A day after Singapore Airlines announced $98 return fares to several regional destinations, rival Qantas jumped on the bandwagon with its own $98 return fare to Perth.

The Australian carrier is offering the cut-rate tickets until 5 pm tomorrow. The price doesn't include airport taxes, service fees, insurance and fuel surcharges. And the tickets are only valid on flights QF72 (departs Singapore 9.20 am) and QF77 (departs Perth 11.35 am). Passengers must depart Singapore during the March 28 to April 14 period and must spend between three and 30 days in Perth. Bookings can be made through the Qantas website.

On Monday, SIA announced $98 return fares to seven destinations, including Bangkok, Hong Kong, Jakarta and Perth. But passengers have to book online for the promotional fares, which are valid for bookings till this Thursday and are subject to two people travelling together between March 27 and April 14.

Will more network carriers join the party? Cathay Pacific's Singapore country manager Olivia Wong said her airline won't follow suit. 'We already offer buy-one-get-one-free deals at just $350 to Hong Kong and are working on a similarly attractive package to Sri Lanka,' she said. 'But no $98 deals. Still, I think the SIA and Qantas deals are great for consumers. It's always nice to see people do crazy things.'

Industry insiders say the cut-price flights apply during the traditional 'slow' period. 'It's all about yield management and cost recovery,' said an airline source. 'If you're operating daily scheduled flights it's better to fill all seats, even at cut-rate prices, rather than fly half-empty.'

But others aren't so sanguine. 'This smacks of predatory pricing, no matter what they claim,' said Valuair chief executive Sim Kay Wee. 'If not, then it's clearly an indication of a desperate attempt by these premium carriers to offload distressed inventory.

'Whatever the case, at the end of the day they're under-selling themselves, and if I were a shareholder I wouldn't be very happy. This is like a real Rolex trying to sell itself in the bazaar at fake Rolex prices.'

Mr Sim insisted that Valuair won't be drawn into a 'kneejerk' price war. 'We know our product and our customers,' he said.

As for Qantas, all its Singapore-based regional general manager Steve Limbrick would say is: 'It's Qantas policy to remain competitive at all times and we have responded to fares that are currently available in the market place.'

Man, this makes me SOOOOOOOOOOOOOOOOOO angry!!! You guys up there in Singapore get the cheap tickets while we down in Perth have to pay normal rip-off fares. It is ALWAYS (and has alway been) cheaper for people to fly to Perth, but for us, we have to pay through the nose!

Man, this makes me SOOOOOOOOOOOOOOOOOO angry!!! You guys up there in Singapore get the cheap tickets while we down in Perth have to pay normal rip-off fares. It is ALWAYS (and has alway been) cheaper for people to fly to Perth, but for us, we have to pay through the nose!
Hmmm....but those are one-off limited-quantify publicity deals I would say....how about Valuair's tickets out of Perth? They should be cheaper than those inflated prices I hope?

It's funny you should mention that, Huaiwei. If you check out Valuair's website, the fares quoted for passengers originating in Singapore are waaaaaaaaaaaaaay cheaper than the prices charged to those originating in Perth. I tell you, the Australian government is ripping us poor Perthites off!

You guys are so lucky to have so many budget carriers based in Singapore. The world is your oyster for just a few bucks. I even saw somewhere that Jetstar Asia were giving away FREE tickets to Bangkok!

It's funny you should mention that, Huaiwei. If you check out Valuair's website, the fares quoted for passengers originating in Singapore are waaaaaaaaaaaaaay cheaper than the prices charged to those originating in Perth. I tell you, the Australian government is ripping us poor Perthites off!

You guys are so lucky to have so many budget carriers based in Singapore. The world is your oyster for just a few bucks. I even saw somewhere that Jetstar Asia were giving away FREE tickets to Bangkok!

Emm...well.....thats the beauty of competition.......:D

Our bigger airports set to take wing
Kate Castellari
18 March 2005
The Australian

New giant aircraft will mean more travellers, and both Sydney and Melbourne are gearing for the influx, writes Kate Castellari

AUSTRALIAN airports have experienced significant growth in both domestic and international passenger numbers.

In the second half of 2004, Sydney's growth in domestic and international passengers was 8.4 per cent, and Melbourne's grew by 12 per cent.

The trend is set to continue as larger aircraft are introduced and, consequently, more business travellers arrive.

Sydney Airport chairman and chief executive officer Max Moore-Wilton says major structural changes at the airport will go ahead in time for the expected arrival of the first Airbus A380 in mid-2006.

"The aircraft is significantly larger, carrying 500 passengers, rather than 360 on the 747, so we have to widen taxiways and pavements, strengthen the tunnel over General Holmes Drive and modify and introduce three airbridges," Moore-Wilton says.

The new aircraft will be a full double-decker and unloading will require new dual gates.

The introduction of these super craft will also mean new lounges to cater for more than 100 million people who, Moore-Wilton says, will pass through the airport this and next year.

The business travel market is changing rapidly, he says.

"Business travellers currently account for 20 per cent of regular passengers and they are generally highly discriminating," he says.

"They are technologically literate and want wi-fi (wireless internet) in terminals and, while we have it already, we are moving to next-generation technology to give them good processing equipment for work."

Also on the horizon for Sydney Airport are express check-ins, self-service kiosks and baggage checks. New processing techniques, such as biometrics to assist processing with smart-gate facial recognition, are also being trialed.

"Very rapidly over the next two to three years, the regular business traveller will be processed very quickly," Moore-Wilton says.

"We are planning new long-term and short-term parking in the airport and we have upgraded food and beverage facilities so business travellers can choose to work and sleep on the aircraft, and then eat in the terminal.

"It is all about making the terminal more user-friendly while expanding general shopping and duty-free shopping with more choice and in a more conducive atmosphere."

Most international airlines use Sydney as a hub and a terminating airport, according to Moore-Wilton.

While most carriers have premium lounges, the airport is building new ones for Emirates, Qantas and Singapore Airlines.

Melbourne Airport has also embarked on significant upgrades of its tarmacs, gates and lounges to accommodate the larger aircraft and more passengers.

The international terminal there will be expanded by over 5000sqm, as part of a $220 million development program.

Melbourne Airport acting CEO Kirby Clark said extra capacity was needed to accommodate its growing passenger traffic.

"With Melbourne's international passenger traffic growing at twice the Australian average over the past seven years, the terminal expansion project will provide valuable extra capacity in the gate-lounge areas and ensure Melbourne Airport continues to provide world-class service to our passengers as we grow," Clark says.

The project will see Melbourne Airport's existing international terminal expanded 20m to the north, a new third level added to the international terminal and two dual-aerobridges installed to accommodate the new double-decker A380.

Construction will begin this month and be completed by the end of next February.

The 20m by 80m expansion of the arrivals and departures level of the international terminal will add over 3000sqm to the public gate-lounge areas, more than doubling the space currently available for seating. "The larger gate-lounges will provide plenty of space for passengers travelling overseas, both on the new A380 aircraft and on other services," Clark says.

The project also involves the construction of a 2000sqm third level above the terminal extension, earmarked for use as premium "penthouse" airline lounges.

"The new third level will create an opportunity for interested airlines to provide their passengers with access to some of the best lounge space available at any airport in Australia or the world," he says. "These penthouse lounges will offer passengers superb views of Mount Macedon, the runways and the newly developed A380 aircraft gates."

Patrick poised to take reins at Virgin Blue
By VIRGINIA MARSH
17 March 2005
Financial Times

Patrick, the Australian transport group, is poised to win control of Virgin Blue, the discount carrier set up by Sir Richard Branson five years ago, despite a lukewarm response to its hostile bid, which valued the airline at ADollars 1.99bn (Dollars 1.58bn).

The Sydney-based group, run by Chris Corrigan, a prominent Australian business leader, said yesterday it had increased its holding to 49.03 per cent, just short of the minimum 50.1 per cent it is targeting.

But analysts believe it will pass the 50 per cent mark before its offer, extended this week, closes next Tuesday. If not, Patrick has the right to acquire up to 3 per cent in the market under so-called "creep provisions" in the coming six months.

When Patrick launched its surprise ADollars 1.90-a-share cash bid in January, it was already by far the Brisbane-based airline's largest shareholder, with a stake of 45.4 per cent.

Mr Corrigan pounced just days after Virgin, Australia's second largest domestic carrier, issued its second profits warning. The warning pushed its shares to ADollars 1.73, well below their listing price of ADollars 2.25 in December 2003.

Hopes that Sir Richard - who opposes the Patrick offer - might step in and an independent valuation that said the group was worth ADollars 2.43-ADollars 2.90 a share helped the shares recover to ADollars 2.15.

Sir Richard still holds a stake of about 26 per cent. The carrier accounts for one-third of the domestic market.

The bid comes as Paul Stoddart, another prominent local entrepreneur, is planning to launch a new domestic carrier. Mr Stoddart, owner of the Minardi Formula 1 racing team, is investing ADollars 70m in a new business-orientated carrier he says could break even if it fills 49 per cent of its seats. OzJet will initially target the Melbourne, Sydney, Adelaide and Canberra markets.

Australian man arrested after text message threat to bomb plane

SYDNEY, March 19 (AFP) - An Australian man was arrested after making a hoax aircraft bomb threat in a text message sent from his own mobile phone, police said Saturday.

Police said the 35-year-old man from Cairns, in northern Queensland state, sent the message to another mobile phone late Friday saying there was a bomb on board an Air New Zealand flight departing Cairns for Auckland.

Police simply tracked the man through his mobile phone number and arrested him shortly after the message was sent.

He was charged with using a carriage service for a hoax threat and making threats and false statements. He will appear in Cairns Magistrates Court on April 4.

Patrick seizes control of Virgin Blue
Tansy Harcourt
19 March 2005
Australian Financial Review

Chris Corrigan's Patrick Corporation has seized control of Virgin Blue, extending its shareholding in the budget airline to 50.26 per cent through its hostile $1.1 billion takeover bid in a move likely to ease the airfare discounting war with Qantas.

The Patrick takeover is expected to trigger a management shake-up at Virgin Blue including the expected departure of co-founder and chief executive Brett Godfrey and coincides with a slowdown in the aggressive growth strategy pursued by the company in recent months.

Mr Corrigan has openly criticised Virgin Blue's strategy of increasing capacity by 60 per cent and selling tickets for as little as $1.

Patrick said late on Friday it now owned more than half the shares in Virgin Blue, after receiving acceptances for 4.86 per cent through its takeover offer on top of the 45.4 per cent it held before the bid.

It is unclear whether Virgin Blue seed investor and "life president" Sir Richard Branson will sell all or part of his 25.5 per cent holding into the bid. Under Virgin Blue's constitution, Sir Richard's Virgin Group is still entitled to two board seats as long as its shareholding remains above 15 per cent.

Sir Richard has previously described Patrick's bid as too low. His investment company was not available for comment on Friday.

Patrick spokesman Paul White said: "We are pleased to have moved beyond 50 per cent. We will be conducting a review and that will proceed in a timely fashion.

"We are very comfortable with Mr Godfrey, as we have made clear from the outset," he said.

Mr Godfrey would not return calls for comment on his tenure and has made few public comments since the takeover bid was launched in January.

Mr Corrigan is holiday in Europe and was unavailable for comment on the bid.

As chief executive, Mr Godfrey was responsible for taking Virgin Blue from a $US10 million start-up in 1999 to an airline that earned $158 million last year, accounting for a third of the Australian domestic market.

Patrick is offering $1.90 a share for Virgin Blue, a price 22 per cent lower than the bottom of the range suggested by independent expert Grant Samuel and 15 per cent below its December 2003 initial public offer price.

The takeover offer for Virgin Blue was due to close this Tuesday, but will now have to be extended two more weeks because Patrick has received acceptances for more 50 per cent.

Patrick's success in grabbing control of Virgin Blue at a price once described by fund managers as "cheeky" and "opportunistic" is a testament to the shaken shareholder sentiment for the airline following its recent profit downgrades and surging oil prices.

Virgin Blue warned in January that its profit for the year ending March 31 would be as much as 15 per cent below last year's $158 million because of the combination of a price war with Qantas offshoot Jetstar, a surge in capacity and fuel costs.

Oil rose above $US57 a barrel this week despite a promise by OPEC of an increase in production.

Global airline stocks slumped on news of the oil price spike.

Fuel accounts for as much as quarter of most airlines' operating costs, and most airline executives fear that more fuel surcharge increases will start to affect demand for air travel.

Key Points
- Patrick now has more than half the shares in Virgin Blue.
- The takeover is expected to trigger a management shake-up at Virgin Blue.
- It is unclear what seed investor Sir Richard Branson will do.

Panic as engine blows up in midair
20 March 2005
Sunday Mail, The

A JETSTAR airliner plunged 1200m over Bass Strait after one of its two engines blew up, sparking a mid-air panic among 102 passengers.

The Boeing 717 was about 50km into a Launceston-Melbourne flight when there was a massive explosion on the right-hand side.

"There was a loud bang and the whole cabin shuddered," a passenger said.

"It was like going through the worst turbulence you could imagine."

In a matter of seconds the plane dropped from 7300m to 6100m, a Jetstar source said.

The pilot shut down the fuel supply to the stricken engine and steadied the craft.

The international distress call "Pan Pan Pan" was radioed to the Melbourne control tower about 11.30pm on Friday, with the pilot declaring a "Level 1" emergency.

The airliner continued into Melbourne on one engine, landed safely and was met by a 60-strong contingent of emergency teams.

Jetstar spokesman Simon Westaway said the damaged engine was being replaced yesterday and the plane would be back in the sky today.

Soaring Fuel Forces Another Virgin Blue Warning
By Morag MacKinnon
Of DOW JONES NEWSWIRES
22 March 2005

SYDNEY (Dow Jones)--Less than a week after Patrick Corp. (PRK.AU) won control, Australian discount carrier Virgin Blue Holdings Ltd. (VBA.AU) warned that soaring jet fuel prices will cut earnings next fiscal year by more than half.

Brisbane-based Virgin Blue said Tuesday that it's considering an additional fuel surcharge on customers, noting aviation fuel has recently hit a record high of almost US$70 per barrel.

It said the price has jumped 28% since Patrick's bid was unveiled Jan. 28 and is about US$25 per barrel above the average price Virgin Blue paid during the current fiscal year, ending March 31.

"Should the price remain at the current level, Virgin Blue will incur additional costs for fuel in the financial year 2005/06, the effect of which (taken in isolation) would be to decrease profit in the order of US$70 million after tax for that year," Virgin Blue said in a statement. Its commentary was issued to shareholders as a revised portion of its target statement to the A$1.90 a share Patrick bid.

According to broker estimates, Virgin Blue is forecast to report net profit of about A$150 million in fiscal 2006, with a US$70 million fuel impact equal to a 60% fall.

Virgin Blue, 25.6% owned by founder Richard Branson, has no hedging in place against rising fuel prices. Rival Qantas Airways Ltd. (QAN.AU), Australia's largest airline, is fully hedged through to June, and is 35% hedged on its fuel requirement for fiscal 2006.

"Virgin Blue management has informed the independent directors that the consequence of the rise in aviation fuel prices will be to decrease performance for the year to March 31, 2006, to a profit which is below that expected for the year to 31 March 2005," the company added.

The caution is the third profit warning from Virgin Blue since its stock market listing in December 2003 at A$2.25.

Two months ago, Patrick launched its hostile A$1.90 a share bid for the 54.6% of Virgin Blue shares it didn't already own after a profit warning pushed shares in the no-frills carrier to a record low of A$1.60.

Virgin Blue's independent directors have rejected the offer as inadequate and advised shareholders to reject the bid, saying that it was timed to take advantage of current share price weakness and to enable Patrick to acquire Virgin Blue without adequately compensating shareholders. Branson's Virgin Group (VGN.YY) has rejected the takeover offer as too low.

Qantas said it doesn't plan to raise the fuel surcharge on passenger tickets but is monitoring the situation "very closely" as jet fuel prices remain near record highs.


Patrick Shares Fall Nearly 4%


A Virgin Group spokeswoman said Branson's company still rejects the Patrick offer and believes in the long-term strength of Virgin Blue's business.

"We've had an extremely successful partnership with them and are looking forward to continuing to work with them," the spokeswoman said of Patrick Corp.

"There are a number of strategies in which we are in line with them," she said, without elaborating. A Patrick spokesman said the company has no comment on the profit warning.

Consultant Grant Samuel & Associates, hired by Virgin Blue to provide an independent valuation, estimated the carrier's shares are worth between A$2.43 and A$2.90.

Still, Patrick didn't need too many shareholders to agree to move its 45.4% stake past the 50% level which it reached Friday, automatically extending its offer by 14 days to April 1.

Virgin Blue shares ended steady at A$1.90 but dipped to A$1.89 during Tuesday's session. Patrick shares fell 3.8% to A$6.15.

"It's a negative, but not unexpected development," said Brent Mitchell, an analyst at Shaw Stockbroking in Melbourne. "The fuel prices in recent times have been substantial and warrant that warning," said Mitchell.

Analysts said the focus has shifted to what Patrick Chief Executive Chris Corrigan plans for the ailing carrier that has grabbed a one third share of Australia's domestic aviation market yet has struggled since Qantas started its own budget carrier Jetstar in May. Higher fuel prices and increased capacity have conspired to intensify pressure and send Virgin shares lower in the past year.

Following its profit warning in January, when the carrier said 2005 earnings will fall as much as 15%, Virgin Blue said Tuesday that it expects this year's results to be within previous guidance provided to the market.

"If you look at the expansion they've undertaken over the last 12 months, in normal circumstances you would have expected profit to go up and so it's taken away all that rise and more on the downside," said Shaw's Mitchell.

Goldman Sachs JBWere analyst Paul Ryan earlier this week downgraded Virgin Blue's earnings by 10%-20% for fiscal 2006 and 2007. In a report issued Tuesday before the statement was issued, he said the carrier's short-term earnings risk is on the downside due to high fuel prices, growth in capacity and the competitive impact of Qantas.

Downgrading his long-term recommendation on Patrick to Hold from Buy, Ryan said the takeover of Virgin Blue raises Patrick's earnings volatility and reduces its balance sheet capacity for logistics acquisitions.

Now, Virgin and Jetstar race for corporate pie
Miles Clarke
23 March 2005
Australian Financial Review

The budget airlines are discovering that to attract business they have to offer more than just cheap tickets, writes Miles Clarke.

With the summer holiday makers safely home, the airline bosses are hoping to attract more business travellers in their efforts to build market share.

The main tussle is between Virgin Blue and Jetstar, with both airlines playing down their low-budget carrier ethos in recent weeks in order to secure a larger slice of the corporate pie.

Jetstar now offers customers who pay a premium for a flexible (JetFlex) ticket the opportunity to add to their Qantas frequent-flyer points, a benefit aviation commentator Peter Harbison, of the Centre for Asia Pacific Aviation, says is a major drawcard.

"Many travellers are quite obsessive about their frequent-flyer points and if there's a choice of carriers they'll opt for the one offering the points."

Virgin also has shifted its position on business travellers with its new Blue Plus fares allowing a money-back refund (with a $30 administration charge), or a full credit for a flight within 12 months of the original booking, where the passenger has failed to check in or cancelled their flight.

According to Harbison, air tickets have become a consumer commodity in much the same way as mobile phones, and the budget carriers have reached a position where they can't trawl for new customers by price. With the domestic air-travel market growing only by 4 to 6 per cent a year, they need to increase their business-travel base, which offers a better yield.

"Virgin is evolving and adapting to market conditions. It might have the appearance of a budget carrier, but effectively it's becoming a hybrid, with a mix of services.

"They've built their business by getting more people flying, but they're hitting the wall in that area and need to find new customers."

While neither of the budget carriers is prepared to divulge their percentage of business travellers, Virgin Blue admits it has more than 1000 corporate travel accounts and is encouraging companies not to lock themselves into exclusive airline contracts but rather have a "preferred-carrier" status, to leave room for flexibility.

"We are demonstrating how companies can use 'best fare of the day' policies and preferred-carrier arrangements to remain in control of their travel spends and at the same time command the privileges they enjoyed under exclusive deals," says Heather Jeffrey, head of corporate affairs for Virgin Blue.

The airline carries in excess of 35,000 passengers a day.

Virgin's tilt towards the full-service model extends well beyond the refund on unused tickets and in some instances surpasses the heady days of the Qantas/Ansett duopoly.

Blue Plus ticket holders get free entry into the airline's Blue Room lounges in Sydney, Brisbane and Melbourne, priority check-in, seating in the "suit zone" towards the front of the aircraft, 32 kilograms of checked luggage, and the ability to change the name of the traveller, the flight time or the date without penalty.

The busy Sydney-Melbourne route has about 50 flights a day, providing a departure every 15 minutes at peak times of the day.

While reluctant to divulge the level of business traffic it's attracting, Jetstar says on certain routes it carries as much as one in five passengers on business-related travel.

Says Simon Westaway, manager corporate affairs for Jetstar: "Within our existing 30-route network, many routes across the 15 destinations we now fly, such as direct Newcastle-Melbourne and Newcastle-Brisbane, Brisbane-Mackay, our outbound/inbound services in Tasmania and the fast-growing Gold Coast market, are by the very nature of Jetstar being a point-to-point carrier, attracting sound and growing levels of business clientele."

The airline is also protecting its flexible ticket holders from the unseemly scramble for seats which occurs with its unassigned seating system. JetFlex passengers receive an orange pre-boarding card which allows them to board alongside families with young children and the elderly.

"This new boarding process has been well received by our business and corporate travel base since its implementation. The coloured boarding pass process and treatment of JetFlex passengers adheres to Jetstar's low-cost principles whilst offering a valuable new benefit to choose an early seat on an aircraft,"says Westaway.

Jetstar flies 880 services to 15 destinations weekly and customers who are Qantas Club members continue to use the lounge facilities where offered. The Gold Coast has six daily flights to Sydney, with many commercial travellers opting for Coolangatta over Brisbane airports, says Westaway.

Flight tips
· Many travellers will opt for the carrier offering frequent flyer points.
· Virgin Blue admits that it now has more than 1000 corporate travel accounts.
· Blue Plus ticket holders get free entry into the airline's Blue Room lounges.

Virgin profit warning puts Patrick in tail spin
By SCOTT ROCHFORT, SYDNEY
23 March 2005
The Age

VIRGIN Blue Holdings' standing among investors has slumped to a new low after the airline issued its third profit warning since August, saying it could face $US70 million ($A89 million) in extra fuel costs in the year to March 31, 2006.

The airline contends the move does not constitute a profit downgrade.

The warning comes just four days after Patrick Corp secured a 50 per cent stake, with Virgin Blue suddenly lowering its defences and recommending "short-term" shareholders accept Patrick's $1.90-a-share takeover bid.

The warning also coincided with a U-turn from independent expert Grant Samuel, which said Virgin Blue shares could trade below Patrick's $1.90 offer once the bid lapsed. It is only three weeks since Grant Samuel valued the airline's shares at between $2.43 and $2.90.

Citing the recent rise in Singapore jet fuel prices for its change in tune, Grant Samuel argued the price of aviation fuel had risen 10 per cent since the release of the Virgin Blue Target's Statement in late February.

But with analysts already warning of the impact of higher oil prices, there are suspicions about the airline's motives for the announcement. One is that Patrick boss Chris Corrigan could end up with more Virgin Blue shares than he needs, given he has hinted he wants only to secure control of the airline.

With the offer not closing until April 1, the downgrade could prompt shareholders - even Virgin Group, with 25.6 per cent - to accept the offer.

Patrick shares fell 24 � to $6.15 yesterday on fears the transport operator could end up with more of a poorly performing airline on its balance sheet. Virgin Blue shares were steady at $1.90.

But Virgin interim chairman David Ryan dismissed suspicions about the timing of the downgrade.

He said that unlike institutional shareholders, Virgin Blue's 15,000 mostly retail shareholders were not up to date on the movements of commodity prices such as oil. He said the announcement was appropriate "particularly given that aviation prices hit an all-time record high on Friday last week".

However, it has taken only a five-day jump in jet fuel prices for Virgin and its independent experts to cut drastically their $2.43-$2.90 target price to Patrick's $1.90 offer.

Virgin also disputed that the announcement amounted to a profit downgrade.

"A profit downgrade would be called a profit downgrade and would be specifically designed (to signal) a change for the full year," spokeswoman Heather Jeffery said.

Malaysia air battle looms on kangaroo route
26 March 2005
The Courier-Mail

MALAYSIA Airlines is to take on Qantas and British Airways on the Australia-London "kangaroo route" and will spend RM700 million ($A238.8 million) upgrading its first and business class cabins.

The airline is refurbishing 17 Boeing 747-400 and 17 Boeing 777-200 aircraft for its long-distance flights in a bid to capture a greater market share of the global high-end traveller market.

Malaysia Airlines is the third largest foreign airline in Australia and services the Australia-UK route daily.

Assistant general manager/product development and services Encik Azmil said the kangaroo route was very important to the airline.

Soaring fuel costs set to spark airfare hike
Peter Morley
26 March 2005
The Courier-Mail

IF you are thinking about flying south for a weekend escape, chances are you had better book and go now.

The days of super-cheap domestic airfares appear to be numbered, as spiralling fuel costs force airlines to raise their prices.

Virgin Blue, whose hedging arrangement expires at the end of this month, has already signalled that record high aviation fuel bills will have to be offset -- most likely by a new fuel levy.

Qantas flyers may get a little more leeway because of the organisation's forward fuel purchasing arrangements, but inevitably it also will have to pass on the higher costs to its mainline operation and discounter Jetstar.

"There are going to be additional surcharges imposed -- that is a certainty," Aviation Centre for Asia Pacific spokesman Ian Thomas warned yesterday.

"Virgin has made that fairly clear, and the other airlines will not hold back once one company moves."

Both Qantas and Virgin confirmed that customers who paid now would not be slugged with any surcharges that emerged later in the year.

There is also some hope for the discount flyers who chase the $10 tickets.

According to industry insiders price tension between Qantas headed by Geoff Dixon and Virgin -- now controlled by Patrick tough man Chris Corrigan -- will lead to relatively stable fares.

"There is enough price tension in the Australian market that flying will remain relatively affordable, but there will not necessarily be the excesses of the past," one observer said.

"The major players will circle each other, each worried about putting up prices ahead of the other."

And there should be no need for the airlines to beat each other around the head any more.

"That is what the showmen entrepreneurs at Virgin did when they started up," another insider said.

"They poked and prodded Geoff Dixon's cage so often with a stick that suddenly he bent the bars and was out there with his hands around their neck. That is how Jetstar came about."

Mr Thomas doubted that there would be "any great adjustment" in fare structures, although pricing strategy might change because of Mr Corrigan's unhappiness with big discounting approaches.

"I think you will find a more moderate approach to pricing competition, although you will still see very sharp fares at particular times of the year when demand is at its lowest," he said.

"Mr Corrigan's main aim is to improve returns from the market in general, but to especially increase profitability of the business market."

Tourism leaders were unconcerned at speculation the days of ultra-cheap air fares were over.

Tourism and Transport Forum spokeswoman Caroline Wilkie said although regional centres across the state had benefited enormously from low airfares in recent years, bargains were still readily available.

"Fares will still remain competitive because airlines are keeping their costs low," she said.

Queensland Tourism Industry Council chief executive Daniel Gschwind said he doubted air fares would revert to the levels experienced seven or eight years ago.

"Clearly we always knew the $10 and $20 air fares were not going to be a long-lived thing," he said.

"But those fares have not driven the tourism growth in recent years and as long as we have multiple airlines there should be price stability."

It might take magic to get airline flying
By SCOTT ROCHFORT, SYDNEY
26 March 2005
The Age

PAUL Stoddart is facing an uphill battle to have OzJet in the air by late August, with the carrier yet to lodge a formal application with the safety regulator to operate services and yet to sign several key commercial agreements it claims it already has.

The Civil Aviation Safety Authority (CASA) is expected to scrutinise OzJet's plans to operate 30-year-old Boeing 737-200s, and it could take up to a year for the airline to get the certificate it needs to run an airline.

OzJet chief executive Hans van Pelt has dismissed talk that the airline is behind schedule.

He said the airline's timetable to establish itself at its new Adelaide base and start services within five months was "moving ahead nicely".

As for delays in OzJet gaining its certificate, he said: "The people saying it are completely unaware of when we first (met) CASA and when we got the balls rolling."

But a CASA spokesman recently said it would take at least six months for OzJet to get its certificate. Virgin Blue took 10 months to get its certificate in 2000.

"OzJet is now in the throes of appointing the final people to run the airline," van Pelt said, referring to a chief pilot, head engineer and maintenance controller.

Stoddart recently returned to Britain before ending talks with liquidators KordaMentha over the purchase of four BAE 146s from the failed Ansett.

OzJet, meanwhile, claims on its website that it has a "partnership with Ansett Aviation Engineering Services". But this appears premature.

The former Ansett maintenance division has yet to sign any agreement to maintain OzJet's proposed fleet of 10 aircraft, including the four previously owned by Ansett.

At a media conference in Sydney last week, van Pelt said OzJet had three of the former Ansett BAE 146s undergoing heavy maintenance "D" checks in Melbourne, indicating the company already owned the aircraft.

But he appeared to contradict himself on Thursday when he said a contract to buy the BAE 146s was "close to being finalised".

Despite OzJet still failing to show any evidence that it might get approval to fly by August, van Pelt said: "I'm yet to meet a person that says that this isn't going to work."

But there are many who doubt OzJet's chances of survival.

"I would have thought the model was vulnerable, to say the least," Ian Thomas, a director of the Centre for Asia Pacific Aviation, said.

Thomas said the key problem was OzJet's focus on business travellers, in that it would be chasing a market tightly guarded by Qantas and aggressively pursued by Virgin Blue.

Virgin, which has just issued its third profit warning since August, is desperate to stem falling yields and its reliance on price-sensitive budget travellers by lifting its proportion of business travellers.

Virgin recently launched its corporate "Blue Plus" fare, giving passengers fully flexible refundable tickets, free entry to Blue Room lounges and priority check-in. Virgin's attempts to crack the corporate market are expected to become more aggressive when Patrick Corp boss Chris Corrigan takes control of Virgin next month.

"There's not a lot of room in the market for a new entrant," Thomas said, adding that any airline willing to take on Virgin Blue, Jetstar and Qantas would need to have extremely deep pockets.

OzJet, backed by Dutch group Muermans, says it has $70 million.

Pledge to use cheap flights
By Megan Doherty
21 March 2005
Canberra Times

ACT Treasurer Ted Quinlan has pledged that the Government will try to use Virgin Blue and OzJet flights when they are cheaper, despite it signing a travel contract with Qantas. Opposition treasurer Richard Mulcahy said Qantas would take over as the provider for ACT Government travel from this Friday. ''I think it is important that the [Economic Development] Minister [Mr Quinlan] spells out what this means for other air companies flying in and out of Canberra when it comes to public service flight bookings,'' Mr Mulcahy said. ''I don't have a problem with the service offered by Qantas. What I do want is an assurance from the minister that the new contract does not mean that business is automatically sent to Qantas.'' Mr Quinlan said he understood the deal with Qantas meant savings across the board for the Government but did not exclude it from using the cheapest flight on the day, including those offered by Virgin Blue and OzJet.

He said Mr Mulcahy was trying to show the Government ''how to suck eggs''. The Government would be supporting the other airlines whenever possible.

Nevertheless, Mr Quinlan said Qantas' service was attractive because of its higher number of flights. Neither Virgin Blue nor OzJet operate a Canberra-Sydney route. He said the Government had made a commitment to ensure at least 15 per cent of public servant flights were on Regional Express Airlines, which had since left the Canberra market. When Rex folded its Canberra flights, it publicly thanked the ACT Government for its support, but slated the Federal Government for not doing the same. Mr Mulcahy said he was not after a percentage commitment from the Treasurer. ''But what I do want is an assurance that a new ACT Government travel contract with Qantas is not carte blanche bookings with Qantas for every public service flight,'' he said. Mr Mulcahy said it was vital there was competition in the ACT market after the demise of Ansett, Impulse and Rex. ''For Canberrans to be able to receive air travel at a reasonable price, it is vital that public service flights are not automatically given to Qantas when there may be a cheaper airfare with Virgin Blue or OzJet,'' he said. ''The ACT Government has a large role to play in ensuring air travel in and out of Canberra is competitive for Canberrans and tourists alike.''

Qantas under threat
By Sarah Jones
27mar05

MALAYSIA Airlines is set to take on rivals Qantas and British Airways in the lucrative Australia to London "kangaroo" route, spending $238.8 million upgrading its first class and business class cabins.

The airline is refurbishing 17 Boeing 747-400 and 17 Boeing 777-200 aircraft for its long-haul flights in a bid to capture a greater market share of the global high-end traveller market.

Malaysia Airlines is the third-largest foreign airline in Australia and flies Australia-UK daily.

Assistant general manager product development and services Encik Azmil said the kangaroo route was very important to the airline, with the new service aiming to snatch market share away from Qantas and British Airways.

"Overall, we are looking for very good growth, especially with the launch of the front-end product," he said.

"We look to be at the same level (of pricing) as that BA and Qantas are getting and we will be looking at that very closely."

Mr Azmil said the airline had a superior product to its rivals in both first and business classes.

"We now have the third generation of flat beds whereas BA has first generation and Qantas would probably be second," he said.

"For now, we have set the new benchmark."

The first fully refurbished B747-400 will touch down in Australia on April 1, with all planes scheduled for completion by mid-2006.

Malaysia Airlines chairman Dato' Dr Munir Majid described improving the company's fleet was a "never-ending process and the competition is relentless".

"It (the upgrade) is about taking on the top-end of the market, to compete more effectively with the best airlines in the world," he said.

The airline is also scheduled to roll out a new fleet of twin-deck Airbus A380s from 2007.

The new and improved aircraft have fewer seats and more room in both cabins, as well as upgraded customer service and equipment, and an inflight entertainment system complete with SMS and e-mail capabilities.

Marketed as "an experience redefined", the airline has installed an 80-inch seat and flat-bed facility in the first class of the B747-400 aircraft and 58-inch seat with new "third generation" angled flat beds in the business class of both the B747-400 and the B777-200.

Virgin shut out of federal travel
JASON KOUTSOUKIS, POLITICAL CORRESPONDENT, CANBERRA
28 March 2005
The Age

DISCOUNT airline Virgin Blue has been shut out of the $230 million-a-year market for Federal Government travel business.

An investigation by The Age has revealed that government departments are flouting orders to obtain the cheapest air fares.

Last year Virgin Blue received a paltry 0.43 per cent share of Government business on domestic flights. Qantas sucked up the lion's share of Government business (84 per cent), with the rest going to smaller regional and charter airlines.

Qantas received $140 million of domestic Government business and $84 million spent on overseas travel.

Virgin Blue's share amounted to just $717,875, almost 200 times less than Qantas'.

Virgin Blue executives are unhappy that most Government travel is booked through Qantas Business Travel, a wholly owned subsidiary of Qantas.

Virgin Blue's general manager for corporate affairs, Heather Jeffery, said it was remarkable that Virgin Blue had about 30 per cent of the domestic travel market - 40 per cent of that by business travellers - but only about 0.4 per cent of Government business.

"The figures speak for themselves," Ms Jeffery said. "If this was the travel-spend breakdown of a budget-conscious multinational, there'd be a much closer look at responsible procurement managers and travel booking processes, as clearly there's little value-based travel occurring.

"Considering that there are obligatory 'best fare of the day' purchasing policies across the public service and the fact that Virgin Blue often has the best fare of the day on a national network of 300 daily flights . . . something isn't translating."

Ms Jeffery said the Queensland public service's "diligent application of 'best fare of the day' policy" had cut its annual travel spending by 20 to 30 per cent.

Virgin Blue chief executive Brett Godfrey has in the past expressed strong concern that almost all Government travel is booked through Qantas Business Travel.

Of the 15 government departments for which The Age was able to obtain travel budget figures, the Defence Department appeared the most biased towards Qantas. Of $110 million spent by Defence on domestic air fares last year, $92 million went to Qantas and $234,695 to Virgin Blue.

The Department of Foreign Affairs and Trade spent only $940 with Virgin Blue last year and $1.7 million with Qantas.

More than 96 per cent of the Attorney-General's Department's $6.2 million domestic travel spending went to Qantas and 0.76 per cent to Virgin Blue.

Figures for Treasury and the Department of Transport and Regional Services were unavailable.

Another concern raised by Virgin Blue executives is that public servants are reluctant to fly Virgin Blue because they do not want to miss out on Qantas club and lounge perks.

The degree to which departments favour Qantas is in breach of repeated attempts by Finance Minister Nick Minchin and Transport Minister John Anderson to force departments to spread Government business more evenly.

In July 2003 the Commonwealth's top public servant, Peter Shergold, wrote to the heads of all government departments and agencies ordering them to review travel processes and restating the Government's policy that all departments seek the best fare of the day.

Yet even Dr Shergold's own department ignored his directive. Last year the Department of Prime Minister and Cabinet directed just 3.3 per cent of its travel budget to Virgin Blue, while 83 per cent went to Qantas.

Both Virgin Blue and Regional Express have stopped flying the Canberra-Sydney route because they have been unable to attract Government business.

A spokesman for Senator Minchin said although the raw figures suggested Qantas was being favoured, the reality was different.

"A lot of it goes down to available schedules and to the routes that Qantas flies. The fact that Virgin Blue no longer flies the Canberra-to-Sydney route has hurt them significantly. But the Government is absolutely committed to the policy of finding the best fare of the day," the spokesman said.

BRISBANE - Sound levels same if runway farther away
Peter Morley
30 March 2005
The Courier-Mail

RESIDENTS would find it difficult to detect any difference in aircraft noise levels if Brisbane's planned second runway was moved further away from their homes, a report has found.

Since the $500 million parallel runway was proposed, Federal MP Wayne Swan has argued the suburbs of Banyo, Boondall, Northgate and Nudgee would experience unacceptable noise levels.

To minimise this, Brisbane Airport Corporation wants to build the second runway closer to Moreton Bay but maintain the 2000m separation from the existing strip so more planes can take off and land using the bay.

Mr Swan believes residents in his Lilley electorate would get further relief if the separation was reduced to 1525m -- extending the gap between homes and the new strip.

The corporation called in engineers Parsons Brinckerhoff, who monitored the noise footprint of planes using the existing strip and used the information to model what happened when the new runway was 1525m and 2000m to the west.

The company concluded that the noise difference was "barely detectable" or "just detectable", depending on flight paths.

Airport corporation spokesman Mark Willey said: "We were asked to prove the difference between two runway locations and we have.

"Noise increases modelled at sensitive receiver sites in neighbouring communities range from 0 decibels at which the human ear is unable to detect any difference to 4.2 decibels, which is described as being just detectable an increase."

Mr Swan said the findings confirmed there could 1525m between the runways, providing some relief to his constituents living mainly to the west of the airport.

"I still believe the corporation can do this and will be keeping up the pressure to achieve this end," he said.

His advice from sound engineers was that rather than being "just detectable", the noise reduction from a 1525m separation was "quite significant". He said some of the methodology used in the survey was "bizarre".

Mr Willey said residents would be invited to experience first-hand any difference in noise levels in the separation differences.

Adoption of the 2000m concept was vital for maximised use of Moreton Bay for simultaneous landings and take-offs, an approach that would minimise noise experienced by other Brisbane residents living under flight paths.

Emirates says cap no longer fits
Steve Creedy, Aviation writer
31 March 2005
The Australian

IN a move destined to give Qantas executives sleepless nights, Emirates is lobbying the Australian Government to lift a cap on the number of flights it can operate to Australia.

The rapidly growing Dubai-based carrier yesterday doubled its flights to Sydney on some days with the addition of a Boeing 777-300 flight to Dubai via Bangkok three times a week.

It will move to double daily Sydney-Dubai flights from May 1 and double daily flights to Perth from October, filling its quota under the existing air services agreement of 49 weekly flights.

But Emirates senior vice-president commercial operations Asia and Australasia Richard Vaughan said yesterday business was booming in Australia and the airline saw significant growth opportunities.

Mr Vaughan confirmed that Emirates lobbyists were already "in that well-worn path to Canberra".

"Tim Clark, our president, made a statement a few months ago that we haven't finished yet," he said.

"And we're not coming in for the sake of coming in, we believe there's a market both ways, both outbound and inbound."

A spokesman for Transport Minister John Anderson said he believed there had been recent discussions with Emirates about the cap.

He said the Government would consider the issue as time wore on but it was not currently under active consideration. "With these things it's invariably a staged process ... we introduce things and then we look at it again after that," he said.

Even if Emirates cannot immediately secure more flights, it will be able to increase the number of seats it flies to Australia as it starts taking delivery of its big fleet of Airbus A380s next year.

"Our delivery is in October 2006 and Sydney will follow London as the second destination and Melbourne will be not far behind it," Mr Vaughan said.

"We won't flood the market with capacity where the market doesn't warrant it but ... for us, buying the A380 gives us extra capacity into places that are slot restricted."

The double daily service to Sydney will also see Emirates significantly increase capacity between the NSW capital and New Zealand.

Airbus A340-500 aircraft flying non-stop from Dubai will terminate in Sydney from May and the bigger Boeing 777-300ERs coming via Bangkok will fly on to New Zealand.

Emirates moves in on Tasman routes
By SCOTT ROCHFORT, SYDNEY, with AAP
1 April 2005
The Age

EMIRATES Airlines is planning to deploy its Airbus A380 on flights from Australia to Auckland next year, a move that will add to the glut of seats over the Tasman and frustrate attempts by Air New Zealand and Qantas to turn a profit on the route.

Since launching flights to Auckland in August 2003, Emirates has already been partly blamed for compounding the erosion of yields and excess airline seats on the route. Now the Dubai-based airline says any of the giant Airbus planes it flies into Sydney and Melbourne will continue their scheduled services to fly on to Auckland.

Emirates is set to take delivery of the first of its 45 A380s, which can seat more than 500 passengers, in October 2006, and has chosen London, Sydney and Melbourne to be the aircraft's "premium routes".

Emirates' head of commercial operations for Asia and Australasia, Richard Vaughan, said he believed there was enough demand for long-haul travel from New Zealand to justify flying an A380 into Auckland. The airline claims that it only has to fill 40 per cent of its seats to be profitable over the Tasman, given it makes money from freight services.

Despite complaints from Air NZ and Qantas about carriers such as Emirates dumping capacity on the Tasman, Centre for Asia Pacific Aviation managing director Peter Harbison said: "The impact of Emirates over the Tasman is overrated."

Air NZ a played down a report in New Zealand's Dominion Post that said it was seeking a code-share and capacity sharing agreement with Qantas, to bypass rejection of their planned alliance by competition regulators on both sides of the Tasman.

· Patrick Corp managing director Chris Corrigan has the majority share of Virgin Blue Holdings but he will have to wait if he wants all of the airline.

Sir Richard Branson's Virgin Group, which owns 25.57 per cent of the airline, refuses to endorse Patrick Corp's $1.1 billion takeover bid. "Virgin Group would like to reiterate that it has no intention of selling any of its shares under the Patrick Corp offer of $1.90 per share," it said.

Patrick Corp said its takeover offer, which expires at 7pm tonight, was final. Centre for Asia Pacific Aviation consultant Ian Thomas said Patrick Corp had effective control of Virgin Blue. -- With AAP

Warning of skills shortage crisis
Steve Creedy, Aviation writer
01 April 2005
The Australian

AUSTRALIA's aviation industry faced a potentially crippling skills crisis as well as serious worries about the availability of capital and declining infrastructure over the next decade, a new aviation industry group has warned.

Echoing recent comments by the Business Council of Australia, the Australian Aviation Council (AUSAC) has called for urgent government action to formulate a policy to address looming industry problems.

AUSAC secretary Gary Lawson-Smith said AUSAC had approached the BCA, which warned last week that Australia's infrastructure was at a crisis point, and would urgently seek to work with state and federal governments on the issue.

He accused the federal Government of lacking a strategic aviation policy and said it did not even have empirical data on some critical issues.

"It just worries me -- and it worries a lot of people -- that we should form some sort of group here and get on to seek some sort of strategic policy," he said.

"What are we waiting for?"

The call comes after an inaugural AUSAC summit in Melbourne last month brought together representatives of major industry groups, airlines and the defence force to discuss problems facing aviation in the next decade.

Topping the list of concerns was the looming skills shortage, particularly among pilots and maintenance engineers.

The summit heard that aviation industry growth across Southeast Asia was creating a surge in demand that coincided with an ageing industry population, where the average age of licensed aircraft engineers was in the mid-fifties and the average professional pilot was aged in the late-forties.

The Centre for Asia Pacific Aviation (CAPA) has conservatively estimated that an additional 94,000 staff would be needed in the Asia-Pacific region over the next decade and that this greatly exceeded projected supply. At the same time, cost restraints mean apprentice intakes in civil and military aviation were at all-time lows.

AUSAC president John Siebert labelled the skills shortage "a major threat to the continued viability of the aviation industry in this country".

Captain Siebert said the threat existed from the general aviation end of the market to the major airlines and the defence forces.

"Training professionals in these areas can take anything from four to seven years," he said. "As an industry we need to come to grips with this looming problem before it comes endemic."

An analysis presented to the conference by CAPA managing director and AUSAC director Peter Harbison also singled out infrastructure and capital investment as major issues for the industry over the next decade.

Mr Harbison warned that the importance placed on costs tended to push back long-term strategic goals and that change was accelerating faster than most people realised.

He argued that the fragile nature of airlines and associated activities meant low financial returns from training and other facilities, as well as for air navigation providers and for smaller airports.

He predicted that infrastructure problems would emerge progressively, with smaller centres getting affected first.

Mr Harbison warned that growing international competition and the removal of government protection meant major international airlines were unable to deliver adequate financial returns to attract investors.

But with mergers thwarted by nationalism and regulatory restrictions, airlines faced a choice of shutting down or re-nationalisation.

General aviation also faced a "slow and painful death" as it was progressively less able to attract investment and as the current generation of pilots, trainers and engineers retired.

Other issues raised by the AUSAC conference include the development of less prescriptive and less costly industry regulatory standards, and the need to improve management skills in general and regional aviation.

Delegates also discussed the need for improved industry co-ordination to more effectively lobby on issues such as tax incentives to encourage investment in new equipment.

AUSAC's board plans to meet at the end of this month to discuss its next move.

"AUSAC and all the industry want to work in a professional and constructive way with the Government to achieve an outcome," Mr Lawson-Smith said.

"And that outcome really is national policy that picks up all these types of things and lays down some decent timetables."

Branson won't give up on Virgin Blue
Steve Creedy, Aviation writer
01 April 2005
The Australian

RICHARD Branson's Virgin Group yesterday has again expressed its determination to stay in Virgin Blue, saying it was confident the airline was well positioned to ride out current conditions.

In a statement to the Australian Stock Exchange, Virgin Group, which founded the airline but sold down its stake in the 2003 share market float, said it had no intention of selling any of its shares under the Patrick offering of $1.90, due to expire at 7pm tonight.

"Virgin Group believes Virgin Blue is well positioned for the current tough trading conditions with a very low cost base, a motivated group of employees and cash reserves in excess of $600

million," Sir Richard said.

"Since Patrick Corporation announced its initial offer on January 28, Virgin Group has purchased further shares on market increasing our shareholding to 25.57 per cent."

The statement came as Patrick announced it had 54.26 per cent of Virgin and had no intention of increasing its bid or extending the offer.

The shareholding means Patrick executive chairman Chris Corrigan has achieved his aim of control of the airline, although Virgin retains two directors: Virgin Management Asia Pacific's David Baxby and Virgin Group commercial director Patrick McCall.

Analysts are expecting a short-term fall in the airline's shares once the offer has expired. Yesterday the stock finished unchanged at $1.91.

Virgin Group's Branson plans to launch new Australian airline - report
3 April 2005

SYDNEY (AFX) - Virgin Group chief Richard Branson is considering launching his second Australian carrier this year, The Sydney Morning Herald reported, quoting Branson.

In Sydney to pledge his support for Virgin Blue Holdings Ltd after rejecting Patrick Corp's 1.90 aud a share offer for Virgin Group's 25.6 pct stake in the low cost carrier, the British entrepreneur said depending on aircraft availability, he hoped to get the international airline off the ground within the next nine months.

Branson said the cost of setting up the airline, which will focus on the US, China and Japan, would be 'considerable'.

'Whether we look at it with our Virgin Blue hat on or a separate hat on is still to be decided,' he said. 'My guess is that it will be likely to be separate from Virgin Blue.

'I think there's no shortage of people who would like to come in,' Branson told the newspaper, noting the airline would need to be 51 pct Australian-owned.

The newspaper said in a possible affront to Singapore Airlines, the 49 pct owner of Virgin Atlantic, Branson suggested the new airline should gain precedence over Singapore Airlines' bid to gain access to the Australia-Los Angeles route.

'I think the Australian government needs to decide - if there are other Australian airlines that want to set up and fly - whether it is better to give those Australian airlines the rights or whether to give Singapore Airlines the rights. Or whether to do both,' he told the newspaper.

Meanwhile, Patrick Corp's offer for Virgin Blue closed on Friday with the transport logistics group lifting its stake to 62 pct.

(1 usd = 1.30 aud)

Emptier aircraft, oil, hurt Qantas
Tansy Harcourt
5 April 2005
Australian Financial Review

Qantas suffered a continued weakness in its international business and a drop in loads for both domestic and international, February traffic figures released yesterday showed.

The worse-than-expected monthly statistics coincided with oil prices climbing to a new high. The two factors helped strip 2 per cent off Qantas's share price yesterday.

The price of oil soared to $US57.79 a barrel yesterday on speculation that producers might be unable to increase output in time to meet rising demand.

Stocks across the globe have slumped as oil costs have risen to as much as a fifth of airline expenses.

Qantas has some oil hedging unlike its rival, Virgin Blue but its latest traffic data showed that its aircraft have been flying less full than in February last year.

Domestic passenger numbers grew by 11.2 per cent in February, boosted by Jetstar's popularity. Domestic revenue passenger kilometres rose by 8.4 per cent and available seat kilometres by 9.6 per cent. However, the load factor dropped by 0.9 percentage points to 76.1 per cent.

Qantas's international traffic numbers fell by 1.7 per cent and the load factor dropped by 1.7 points, while RPKs rose by 2.1 per cent and ASKs by 4.5 per cent during February.

However, the fall in loads and drop in traffic on its international flights might be offset partially by rising airfares.

The first-quarter American Express Airfare Index for Asia-Pacific, released yesterday, showed first-class airfares from Australia jumped by 1.1 per cent from the previous corresponding quarter. Business-class fares rose by 0.5 per cent, full economy fares grew by 0.2 per cent and discount economy airfares increased by 4.5 per cent.

"The reducing gap between full economy fares and discount fares in the Australian market is a trend we are likely to see repeated around the region in the medium to long term as airlines seek to reduce the incentive for corporate customers to move away from the most flexible and highest-yielding economy fares," said Amex's head of consulting services for Japan Asia Pacific Australia, Robert Tedesco.

Apart from Australia, the Amex survey also found that several classes of airfares from Hong Kong, India, Malaysia and New Zealand had increased.

Mr Tedesco said soaring oil prices, the Boxing Day tsunami and the reduction in the number of first-class cabins had contributed to the rise in fares from many countries.

Brokers say Virgin Blue overpriced
Scott Rochfort
6 April 2005
The Sydney Morning Herald

Brokers remain gloomy on the short-term prospects for Virgin Blue despite the airline's share price rebounding on Monday after the closing of Patrick's $1.90 a share takeover bid.

After countering predictions its shares would slump well below $1.90 after the Patrick bid closed on Friday night, Virgin hit a high of $2.10 on Monday and fell 3c to $2 yesterday.

But most brokers have maintained their negative stance - with some valuations as low as $1.15 - primarily on the concern the airline is totally unhedged against the rise in fuel prices.

A Citigroup research note on Virgin, for one, was headed "Sky High Price Likely to Tumble".

Goldman Sachs JBWere cut its recommendations for both Virgin Blue and Qantas from a long-term "hold" to "sell" and upgraded its oil price forecast by 38 per cent for 2006 to $US55 a barrel.

Given Virgin Blue no longer has any fuel hedging in place, the broker slashed its net profit forecasts for the airline by 23.2 per cent to $118.8 million in the 12 months to March 31, 2006 and by 50.7 per cent to $98.9 million the following year.

The broker slashed Qantas's net profit forecasts by 1.4 per cent to $758.4 million in 2005-06 and by 12.2 per cent to $758 million for 2006-07.

Qantas shares fell to a five-month low of $3.40 yesterday before closing 6c lower at $3.42.

Aside from concerns over rising fuel prices, the fall was partly blamed on Virgin boss Sir Richard Branson signalling plans to establish an Australian international carrier within the next nine months.

Sir Richard said the airline would fly to China, Japan, and on the highly uncompetitive Australia-Los Angeles route, which generates 10-15 per cent of Qantas's overall profits.

Citigroup transport analyst Jason Smith downplayed the effect of Qantas facing more competition on a route where it carries three-quarters of the passengers.

Even if Singapore Airlines or Virgin did not enter the US route, Mr Smith said, the overall profit contribution to Qantas from the LA route would fall to nearer 6 per cent in the next three years as it grows its Asian and domestic operations.

A new carrier on the LA route, of which Sir Richard said he would own 49 per cent, would also take some time to affect Qantas. This is because under the present air treaty between Australian and the US, a carrier on the route can only offer four weekly services in its first year of operation. Qantas flies 34 direct services to Los Angeles each week.

Very interesting on how much the SYD to LA route for Qantas is such a big money maker (34 flights per week is an awful lot). Why don't Qantas offer flights to San Francisco.I think they would make excellent profits on that route as well. Many years ago Qantas offered nonstop flights from SFO to SYD using a 747SP. Then all of the sudden cancelled the route.

United Airlines is currently offering non-stop service with a 747-400 daily with a departure time of 9:45PM the same timeslot as the old Qantas service and United's planes are filled to the brim.

I think they will eventually service SFO again. Maybe when the A380's come online they might free up some 747's for the route?

34 B747-400 flights shared by two airlines. Now that is big money! :D

Melbourne Airport Starts Runway Widening Project

MELBOURNE, April 6 Asia Pulse - Work started today on a $A50 million ($US38.28 million) runway widening project which will give Melbourne the first airport in Australia able to accommodate the world's largest commercial passenger aircraft.

Over the next six weeks the airport's 3.7-kilometre north-south runway will be widened by 15 metres to cater for the massive wingspan of the new Airbus A380, which carry up to 555 passengers on its two decks, 100 more than the largest 747.

The A380 Super Jumbo is expected to begin landing and taking off at Melbourne from June 2006.

Launching excavation works today, Premier Steve Bracks said Victoria had the best growth in international tourism figures in the country.

Being the first city in Australia to be ready for the Airbus would give Melbourne a big advantage over its rivals, he said.

"We've done very well with direct flights from all round the world and we'll do well of course out of this project also," he said.

Last year international air traffic at the airport increased by 15 per cent while domestic traffic increased by 13 per cent.

The runway project is part of a A$220 million project to expand the capacity of the airport.

Melbourne airport chief executive Chris Barlow said there would be minimal disruption to airport operations as aircraft were redirected on to the east-west runway.

However passengers should be prepared for delays of up to 30 minutes during peak time.

Five of the international carriers at Melbourne airport have placed orders for the new aircraft which can fly almost 15,000 kilometres non-stop.

Construction is already underway at the international terminal building to install two new gates allowing passengers to board and disembark at both levels of the double-decker Airbus.

Australia's Qantas warns it may double fuel surcharge

SYDNEY, April 7 (AFP) - Qantas Airways has warned it may double the fuel surcharge on its ticket prices to offset an estimated one billion dollar (760 million US) blowout in fuel costs over the next year.

Qantas chief financial officer Peter Gregg told Australian reporters in remarks published Thursday that the airline was working through the numbers and expected to make a decision by Friday.

But he indicated the airline had no choice but to follow Air New Zealand, which on Wednesday became the first airline in the region to raise the surcharge for the third time since its introduction last May.

"It's highly likely to rise, and if you ask me how high I'd say it could double," Gregg said.

A doubling of the surcharge would mean domestic travellers paying 24 dollars for each flight while the charge for international travellers would rise to 58 dollars.

Greg said at current prices, Qantas' fuel bill for the next financial year beginning in July would be one billion dollars higher than during the current year.

Qantas paid 1.35 billion dollars for fuel in 2003-04 and earlier this year said its costs this financial year were running about 560 million dollars higher.

The warning came as the International Air Transport Association this week predicted international airlines could lose 5.5 billion US dollars in 2005 because of high oil prices.

The cost of Singapore jet fuel is now 80 percent higher than in April last year and 15 percent higher than when the airlines last increased the surcharge in October.

Air New Zealand on Wednesday hiked its surcharge on flights to and from Australia from 11 dollars to 39 dollars.

Business Times - 07 Apr 2005

Virgin Blue announces steep rise in fuel surcharge

SYDNEY, Australia - Australian discount airline Virgin Blue Holdings Ltd said on Thursday it will almost double its fuel surcharge on domestic flights to cover the soaring cost of fuel.

The domestic surcharge will increase to A$19 (US$14.60) from A$10 and the surcharge on international flights will increase to A$35 from A$20.

"We will continue to review our position and while we are loathe to increase the cost of air travel even by a relatively small amount, like all airlines around the world we are currently faced with dramatic increases in costs due to the record price of jet fuel," Chief Executive Brett Godfrey said in a statement.

"If fuel prices stay at current levels, Virgin Blue's fuel bill this year will be A$165 million more than in 2004-05," he said.

The new surcharges will come into effect April 12.

Local rival Qantas Airways Ltd is expected to announce increased fuel surcharges by the end of the week. Crude oil prices earlier in the week hit an intraday high of US$58.28, and remain about US$20 higher than year-ago levels.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Trans-Tasman on Jetstar's radar
By FELICITY WILLIAMS
8 April 2005
The Advertiser

QANTAS budget-airline subsidiary Jetstar indicated yesterday it wanted to be flying internationally by 2007, with services to New Zealand the most likely option.

"I would be disappointed if Jetstar was not operating some form of international operations within the next two years," Jetstar chief executive Alan Joyce said.

However, Mr Joyce said Jetstar's first priority was improving its coverage of Australia. "I preface this comment on the basis that Jetstar is yet to commence services in past-nominated Australian markets, including those within Western Australia, the Northern Territory and all other parts of the nation, including Queensland," he said.

Jetstar was unperturbed by the high level of competition among airlines on the trans-Tasman route.

"In the domestic market, we've had very heavy competition in terms of Virgin Blue so we're not worried about that," Mr Joyce said.

He added Jetstar was well-equipped to compete on international routes.

"We know we have a very low cost base and we know we can do it very effectively in those routes and we'll only come on if we think we can make some money."

Mr Joyce said Chris Corrigan's new controlling influence would be felt at rival Virgin Blue and this would change the competitive dynamics within the Australian airline industry.

"I think Corrigan will focus in on costs because that is what he's typically done in a number of different areas and they're talking about focusing in on moving towards the business traveller a bit more," he said.

Corrigan-managed port handler Patrick Corporation last month secured control of Virgin Blue's board as part of its takeover battle for the airline.

Meanhwile, Virgin Blue announced last night it would increase its fuel surcharge by $9 to $19 a sector on domestic routes.

Travellers flying on its Pacific Blue international flights will pay $35, up from the previous charge of $20.

The charges will apply from Monday. Qantas is expected to follow suit today.

Shareholders have been told high oil prices could strip $91 million from the carrier's 2005-06 profit.

Qantas chief financial officer Peter Gregg said on Wednesday a decision would be announced by today whether the airline would raise its existing surcharge of $12 per domestic ticket and $29 for international travel.

Knuckling down in bout with costs
Steve Creedy
8 April 2005
The Australian

RISING fuel prices made it imperative for airlines to aggressively tighten controls on whatever costs they could, Jetstar chief executive Alan Joyce said yesterday.

The warning came as Jetstar is expected today to announce fuel surcharge increases that could add up to $10 per sector.

The move comes after Virgin Blue last night almost doubled its domestic surcharge from $10 to $19 per domestic sector and from $20 to $35 on international flights.

"There are costs within our control and there are costs outside our control and we really have to knuckle down," Mr Joyce said.

"And I think any carrier, certainly at the price-sensitive end of the market, has to maintain its cost base."

Jetstar is aiming for a unit cost of 8c per available seat kilometre after it has fully integrated its Airbus A320 fleet.

Mr Joyce said Jetstar's cost containment programs remained on track for the remainder of the financial year because it was being measured against a target of 8.25c, boosted by start-up costs and the additional expense of operating a mixed fleet.

But he warned that without a sustainable ongoing low cost base, the airline would not be able to offer the low fares that drove its bottom line.

He said the airline recognised the danger that the increased surcharge could affect demand.

"It's always been something at the low end of the market you have concerns about," he said.

"But it's something where, with the way we've seen growth over the last few months, we still think the market's very buoyant and the economy's doing well.

"So hopefully we can keep demand up but we'll certainly keep an eye on it."

Mr Joyce said Jetstar was also offering passengers new benefits aimed at further stimulating air travel.

These included allowing passengers on fully flexible fares to earn frequent flyer points and giving them priority boarding.

The airline was also introducing portable entertainment units on flights and planned to make hot meals available.

However, it remained committed to its unallocated seating.

Qantas tightens thumbscrews
Lisa Allen
11 April 2005
Australian Financial Review

Qantas Airways has been accused of misusing its market power by threatening to withhold air ticket sales commissions from travel agents unless they meet targets for selling holiday packages from its Qantas Holidays unit.

Most travel agents say they are in the middle of reaching new agreements with Qantas, which dominates Australia's air and holiday package tourism sector and will not comment publicly.

But some, speaking on condition of anonymity, said the deals Qantas is trying to strike were a way for the airline to turn around Qantas Holidays, which is performing well in international sales but not as well domestically.

One travel agent said Qantas's aim was to reduce distribution costs, reduce commission, and eventually drive all holiday and air business to Qantas web sites.

Qantas said in a statement that it regularly entered into commercial agreements and reserved the right to offer competitive terms across the entire Qantas group.

"Qantas is in regular negotiation with travel agents in regards to contract arrangements on a number of products across the Qantas group," the carrier said. "We conduct commercial arrangements with a number of travel agent partners, some of which involve other areas of the Qantas group, [including] Australian Airlines [and] Qantas Holidays.

"These arrangements are negotiated against a backdrop of high levels of competition and they comply with all legal requirements," Qantas said. "While we cannot comment on individual specifics, all these arrangements are legally compliant."

Justin Montgomery, the head of Australia's largest independent travel wholesaler, Creative Holidays, which does not sell Qantas air tickets, defended the airline.

"Obviously they are quite aggressive and try to sell both air tickets and Qantas Holidays together," he said.

"I am unsure about targets [but] if you own a large organisation that has big distribution you will try and tie it together to meet targets.

"The commercial pressure of what is going on in the industry is making them more aware," he said.

Mr Montgomery said all carriers had to act aggressively given the recent additional air capacity added to Hong Kong and Europe.

Qantas off-shoot Jetstar has also been at loggerheads with retail chain Flight Centre, which decided to sell Jetstar tickets from its website without first consulting the airline.

"We are aware that Flight Centre have an established an online presence without having a discussion with us. We will have further discussions with that organisation over that," said Jetstar spokesman Simon Westaway. "We are hoping to continue a sound relationship with them [but] we will be having further discussions with Flight Centre over this latest move."

Emirates tops foreigners flying out of Melbourne
STEPHEN DABKOWSKI
11 April 2005
The Age

EMIRATES has become the largest foreign carrier operating out of Melbourne Airport after recently doubling its services from Tullamarine.

Emirates now offers two flights a day to New Zealand (Christchurch and Auckland) and another two flights to Dubai from Tullamarine, which means the airline is now selling more than 1200 seats a day out of Melbourne.

"Melbourne as a destination has been very rewarding for Emirates," said Eddie Lim, Emirates area general manager for Australia and New Zealand. "It was the first port Emirates flew to in Australia and it continues to be very successful."

Emirates hopes to replicate its Melbourne success in Sydney, where it plans to double daily operations from May. It also flies daily out of Perth and Brisbane.

Mr Lim said the arrival of the new super-jumbo Airbus A380 - Emirates will be the second carrier in the world to take possession of the aircraft - signals a new phase in travel to and from Australia.

"While we haven't confirmed when the new A380 Airbus aircraft will be available, we will hopefully be introducing them into Australia early next year," Mr Lim said. Emirates has also announced plans to build flight lounges in Melbourne, Sydney, Brisbane and Perth.

The new lounge at Melbourne Airport for Emirates frequent flyers is expected to be open at the end of the year.

Window seat: Ozjet scans skies for pilots
Steve Creedy, Aviation writer
12 April 2005
The Australian

RACING identity Paul Stoddart's premium start-up airline, Ozjet, is moving to recruit pilots after setting up a senior management structure to run its operations.

Ozjet chief executive Hans Van Pelt said yesterday the airline would start advertising for pilots this week and remained confident it would launch in the third quarter of this calendar year.

The niche airline intends to initially operate a fleet of three BAe-146s and two Boeing 737-200 jets, each with 60 business class seats in a two- abreast configuration.

It will provide a business class service at full economy prices that will include the ability to avoid queues by carrying up to three pieces of baggage into the cabin.

Initially serving Sydney, Melbourne, Canberra and Adelaide, Ozjet hopes to double its fleet to 10 by mid-2006 and extend services to Perth, Brisbane and Port Lincoln.

Mr Van Pelt said the airline was pushing along with its application for an air operator's certificate "pretty much on schedule".

He said Ozjet had hired key post holders, including a chief pilot as well as check and training, engineering and safety and audit managers.

The flight attendant management structure was in place and the airline was looking for accounting and commercial executives.

It was also looking for pilots because they would take the longest to train. "We want to get them in the bag early," he said.

One of the airline's 737s is already in Australia and a second is undergoing heavy maintenance in Britain.

Mr Van Pelt said three BAe-146s were also undergoing heavy maintenance checks in Australia.

"So that's our five start-up fleet in the third quarter and then we'll get to 10 as quickly as we can after that, which will give us some efficiencies," he said.

"If we start with five (aircraft) we can concentrate on key markets and then we don't have too big a headache getting through January when there's nothing around."

Ozjet is aiming for a single-digit market share and will be targeting corporate and government business.

It says its market research indicates the new service will be well received and Mr Van Pelt believes it will be able to withstand competition from Virgin Blue and Qantas.

Virgin, in particular, is moving to aggressively court business travellers with flexible fares and perks such as free lounge access and priority check-in. Virgin also plans to introduce a frequent flyer scheme.

Spanner in works at Jetstar
Steve Creedy, Aviation writer
12 April 2005
The Australian

QANTAS low-cost offshoot Jetstar is optimistic it can reach a deal with engineering workers that will allow its proposed maintenance base in Newcastle to proceed.

The project stalled after engineering staff recently rejected an enterprise bargaining agreement and the airline yesterday confirmed it would reopen tenders unless it got a deal.

Spokesman Simon Westaway said Jetstar required the enterprise agreement to be finalised so it had a fixed cost base over the next three years.

"The reason why Newcastle was selected ... was that it was extremely cost-competitive and we need to ensure that it remains a cost-competitive facility for us," he said.

"This is not only so we can undertake the work for our organisation but also compete for other work as well."

Mr Westaway said the Airbus A320 was a popular aircraft and there were numerous organisations that could compete for the maintenance work.

He said a shifting cost base required Jetstar to at least assess what alternatives were available if it could not reach an agreement with its engineering group. But he said the airline's maintenance had been conducted internally to date and its preference was to continue that.

The airline was hopeful it could work with its engineers and reach an agreement.

Meanwhile, Virgin Blue yesterday downplayed the impact of a three-year maintenance deal with Air New Zealand's engineering arm, understood to be worth more than $30 million.

A Virgin spokeswoman said the deal formalised an existing arrangement where Air NZ Engineering Services did work on the airframes of Virgin's Boeing 737-NGs.

Patrick Corp targets costs in Virgin Blue operational shake-up
Tansy Harcourt
26 April 2005
Australian Financial Review

Patrick Corporation has started modifying Virgin Blue operations after grabbing majority control of the budget airline earlier this month.

Patrick chief executive and Virgin Blue chairman Chris Corrigan's first big change was to reduce the frequency of board meetings from monthly to quarterly to save time and costs. The move is understood to be part of a broader operational review now Patrick has lifted its stake from 45 per cent to more than 62 per cent.

Mr Corrigan is looking at ways to reduce expenses at Virgin Blue by extracting better operational efficiencies and is reviewing the airline's treasury department, which is responsible for areas such as debt issues and currency and commodity hedging. Record high oil prices have eroded earnings of airlines around the world and have greatly affected Virgin Blue because it is unhedged. Major competitor Qantas has partial cover.

Analysts and investors are divided on whether Virgin Blue should started hedging the oil price while it remains at a near-record high, or bet that oil prices now have more downside than upside risk. The price of jet kerosene has risen as much as 58 per cent this year, adding $US76 billion ($97.4 billion) to airline fuel bills across the world, a fifth more than 2004, according to the International Air Transport Association.

Virgin Blue is continuing with its aggressive competitive stance against Qantas and its low-cost offshoot, Jetstar. Virgin Blue announced last week that it would start flying to Queensland's Hamilton Island in June, ending a year-long monopoly held by Jetstar. Since Qantas ended Hamilton Island flights last May, leaving only Jetstar, the island's residents have fought to bring back a full-service carrier.

Now Qantas will restart services to the island from mid-year, putting it in direct competition with Virgin Blue.

Delays in air travel
28 April 2005
The Advertiser

QANTAS flights at Adelaide Airport were thrown into chaos yesterday because of a stop-work meeting of baggage handlers in Melbourne.

The two-hour long meeting forced the cancellation of two flights and delays to several others in and out of Adelaide, leaving hundreds of passengers stranded in the terminal.

A Qantas spokesman said ramp staff resumed work about noon and services were able to return to their normal pattern quickly.

Virgin Blue flights were unaffected.

Virgin Blue expected to focus on Australian routes
Zach Coleman
29 April 2005
The Standard

Virgin Blue Airlines is likely to turn its attention away from a proposed venture in Macau in the fight for control of the discount carrier, analysts said.

Patrick Corp, which previously held 45 percent of Virgin Blue's shares, raised its stake this month to a controlling 62 percent through an unsolicited offer to
buy out other shareholders. Given Patrick managing director Chris Corrigan's criticism of Virgin Blue's strategic direction during the struggle, stock analysts believe changes are coming.

"Patrick is pretty much a domestically focused business,'' said Paul Huxford, who tracks transport for Macquarie Research Equities in Sydney. "With the
change in control, I think Virgin Blue is likely to focus more on the Australian market.''

Huxford and his counterpart at another bank in Sydney, who declined to be named, said they see Virgin Blue concentrating its management resources on finding ways to increase the airline's market share with domestic business and government fliers and cope with high fuel prices rather than pursue offshore opportunities.

Virgin Blue is struggling to beat back a challenge posed to its core leisure travel market by Jetstar Airways, the discount carrier launched last year by
dominant Australian player Qantas Airways.

After successfully grabbing a third of Australia's domestic air-travel market, Virgin Blue set up a new arm for flights to New Zealand, Fiji and other Pacific
islands.

It also entered into talks last year with Hong Kong-listed Shun Tak Holdings and Air Macau on setting up a joint venture discount airline in Macau that
would operate under Air Macau's 25-year monopoly concession on local commercial flights.

Those talks do not seem to have gone that far, said Peter Harbison, managing director of the Center for Asia Pacific Aviation consultancy in Sydney. But
Harbison believes Virgin Blue will continue to push for a deal.

"Macau is very much high on the agenda,'' he said, adding the opportunity for profits from flight rights unused by Air Macau is too strong for Virgin Blue to
ignore.

Harbison sees Virgin Blue moving into Macau with at least four jets but perhaps not the Virgin name as Singapore Airlines has a veto over the use of the Virgin name on new international airline ventures.

Emirates goads Qantas to step outside and fight
Steve Creedy
29 April 2005
The Australian

Open skies will benefit all, Flanagan tells Steve Creedy

EMIRATES vice-chairman and group president Maurice Flanagan has challenged Qantas boss Geoff Dixon to "come out from behind the barricades" and take on the Dubai-based carrier in an open market.

While he says he can understand the Australian carrier's desire to protect its dominance on the Pacific market, Mr Flanagan believes Qantas is overstating the negative effect of further liberalising Australia's skies and even argues it may benefit from the move.

"It's time they stopped claiming to be a street fighter," Flanagan told The Australian this week.

"Street fighters don't hide behind the barricades, behind the Government, they come out into the street and fight."

The Emirates executive's jab at the flying kangaroo comes as a high-level delegation heads to Canberra in mid-June to put Dubai's case for increased access to the Australian market and to raise the longer-term prospect of flying across the Pacific.

Australia has proven a good market for Emirates and the airline will argue its presence has opened up trade with the Middle East as well as access to a wide range of destinations beyond Dubai.

Leisure traffic to and from Australia has also grown strongly enough to prompt the airline to establish its hotel on the eastern seaboard.

Emirates is also moving to set up a global network and it sees the trans-Pacific route as a logical expansion of its services to Australia and New Zealand.

The approach is part of a breathtaking growth strategy by the emirate of Dubai and its airline that has seen billions of dollars being poured into new planes and airline infrastructure as Dubai establishes itself as a major global air transport nexus.

Just two decades old, Emirates has already established itself as one of the world's five most profitable carriers and is ranked 15th in terms of revenue
passenger kilometres.

Officials remain confident they can grow the airline into a major global player that will eclipse many of the existing aviation heavyweights.

So far it seems to be succeeding: Emirates grew its capacity in the financial year ending March 31 by 30 per cent and now has a fleet of 76 aircraft, including six freighters.

Surprisingly, it grew while boosting its load factor -- the percentage of seats filled on its aircraft by paying passengers -- by more than one point to 74.6
per cent.

Emirates has the advantage of a young fleet with a mix of Airbus A320-200s, A340-300s and A340-500s, as well as Boeing 777-300s, 777-300ERs and 777-200s recording an average age of 55 months.

A $US19 billion ($24 billion) aircraft order will see its fleet top 150 aircraft -- including 45 of the new A380s, which will make it the world's biggest operator
of the super jumbo -- as new deliveries arrive at the rate of one a month for the next eight years.

Emirates this week also announced its 17th consecutive profit with a new record for the group of $US708 million for the year ending March 31, and revealed it had $US2.2 billion in cash.

That was a 49 per cent increase on the previous year and headlined a slew of double-digit increases ranging from a 36 per cent rise in group revenue to a 27 per cent increase in freight tonnage.

The airline received 240,000 job applications last financial year as it boosted staff levels from 22,500 to 25,000.

Its employees come from 124 counties with more than 100 nationalities represented among 56,000 cabin crew and 60 among its 1135 flight crew.

It is spending $US353 million to build the world's biggest A380 maintenance facility and one of the biggest aviation maintenance facilities in the world.

The new centre will include seven fully airconditioned hangars and a paint shop, each more than twice the size of a soccer field and capable of accommodating the A380's 80m wingspan and giant vertical stabiliser.

All this is backed by a dramatic multi-billion-dollar airport expansion plan and an even more grandiose long-term design to build a six-runway "airport city"
at Jebel Ali, 40km from the existing airport, with a capacity for more than 100 million passengers.

Dubai International Airport recorded 21.7 million passengers in 2004, making it the 12th busiest in the world and left it struggling to keep pace with growth
for the year of more than 20 per cent.

It is now home to 107 airlines connecting to 260 destinations.

With government projections predicting 60 million passengers by 2010, the expansion will more than triple capacity to 70 million passengers and includes
23 gates for A380s.

Flanagan does not believe the projections are over-optimistic.

"It's linked to the sort of place Dubai is," he says.

Passenger traffic is growing at 17 per cent a year because of Dubai's ability to attract business and tourism traffic. "We don't see that changing."

The massive investment flowing from Dubai's determination to establish itself as a major aircraft hub and the fact that Emirates chairman Sheik Ahmed
bin Saeed Al-Maktoum also runs the Civil Aviation Department help fuel the claims by competitors such as Qantas that the airline is reaping the benefits of unfair government support.

The Dubai carrier vehemently denies this, with the officials pointing out that its accounts are independently audited according to international practices.

Flanagan says Sheik Ahmed has already warned the carrier that it would pay for the new work being done at the airport.

Emirates gets no break on handling fees or other airport costs, he says. "There's no subsidy of any sort. Since the airline started, the owner, the
Government, has put in over the 20 years somewhere about $US80 million. We've paid back just about $US300 million in dividends.

"How much has been put into Qantas over the past 20 years by the Government?"

The veteran airline executive says complaints by competitors are a sour grapes story.

"We're just quite smart at running an airline and we don't do it the way anybody else does," he says. "And maybe they should, instead of saying what advantage we have, look at the way they do business and see why they're screwing it up and we're not."

Flanagan does concede one advantage that flows from Emirates's ownership structure. It has, he says, the chemistry of a family business which allows decisions to me made quickly.

But he says it also comes down to keeping things simple and only flying routes which make money.

"We don't employ anybody we don't absolutely need to and we keep looking at management structure all the time -- the way it works, looking for overlaps between jobs, all the boring stuff that you have to do if you want to have a business model that's simple and efficient."

Like all airlines, Emirates is watching fuel prices closely and Sheik Ahmed warned in his annual results presentation that the airline's 2005-06 outlook was clouded by the risk of sustained high fuel prices. However, neither he nor Flanagan believes it will stop the prodigious growth.

Emirates says its fuel is not subsidised, and it has joined other carriers in imposing fuel charges. Flanagan says a fuel management strategy that saved it $US170 million failed to stop fuel costs jumping from about 14 per cent of the total to about 29 per cent now. But he says the effect on traffic of the fuel surcharge is minimal, and takes solace in the reaction to the oil price spikes of the 198Os: "It went up to $US50 a barrel in 1980 prices, that was way above in real terms what fuel is costing now."

Steve Creedy travelled to Dubai courtesy of Emirates.

Runway robberty - How Sydney airport makes a huge profit from passengers
BEN SHARKEY, MATT SUN
30 April 2005
Daily Telegraph

WHETHER you're parking the car for more than two minutes, buying food while waiting for a flight or catching a taxi, Sydney Airport Corporation has its hand in your pocket.

Every aspect of the airport, from car parking, the choice of food shops, retailers and transport, has been deliberately placed to return maximum profit to the owners.

And while customers might feel like a million dollars when they get on the plane and a million less when they get off it, Sydney airport regards every passenger inside a terminal to be worth something: $18.01 to be exact.

However, Julie Maloney, 50, from Campbelltown, felt pretty special at the airport yesterday when she realised the group comprising her daughter Belinda Maloney, 27, and friends Andrea Summerell, 30, and Nicola Winfield, 27, were worth more than average.

They each spent an average of $31.60 at the airport, not including taxi fares to the airport and their plane tickets.

"It is always expensive coming to the airport when you consider the cost of parking, and then all the food and drinks are not cheap either," Mrs Maloney said.

Financial reports released earlier this month by Macquarie Airports -- which holds a 55.5 per cent interest in Sydney airport -- reveal solid revenue increases spearheaded by the introduction of Krispy Kreme and Oporto.

Earlier this month, Sydney airport announced a 15.2 per cent increase in earnings in the nine months to March 31, 2005 to a total of $357.3 million.

Retail revenue rose from $34.5 million in the corresponding period in 2004 to $39.2 million this year with 27.5 million passengers passing through Sydney airport, an annual increase of 11 per cent, in 2004.

On the other side of the ledger, the airport saved on labour costs by reducing expenditure from $8.6 million to just over $8 million.

The fact that Sydney Airport Corporation was doing rather well on the balance sheet came as no surprise to Mrs Maloney, who was at Sydney airport yesterday to see off her daughter and her friends, who were bound for Thailand.

"It's is a nice airport. A tad expensive but it is nice," she said.

The group was able to avoid the $2 "ground access fee" for taxis taking passengers away from the airport and the $2 trolley hire fee because the girls have strong backs. However Mrs Maloney, who ended up paying $22 for parking, will not be so lucky on the return journey.

"Well I know people who wait in side streets and then drive up the second the person they are waiting for arrives but I like to have a coffee and enjoy the experience so I'll pay for the parking again," she said.

Sydney Airport Corporation corporate affairs manager Rod Gilmore said the perception that the airport had undergone price hikes since it was privatised was incorrect.

"The most significant increase in charges occurred before privatisation. This aeronautical charge increase was in the order of 97 per cent," he said.

"The ACCC in its recent price monitoring report makes it quite clear that the increase in total revenue per passenger [which is effectively the average charge] was less than 1.0 per cent for Sydney airport in the last financial year." Sydney airport also gets its cut from patrons who decide not to drive and catch a taxi after introducing a $2 "ground access fee" in November of last year.

The 2004 airport annual report claims the fee was necessary "to compensate for the airport's substantial infrastructure development and improved facilities".

But last year The Daily Telegraph revealed all the taxi drivers' toilet block really needed was a few coats of paint and some tile grout.

Since then the only increases in aeronautical charges have related to new infrastructure and security, the cost of which is passed on to airlines.

Do you think Sydney airport charges are excessive? dailytelegraph.com.au

Julie Maloney, Belinda Maloney, Andrea Summerell, and Nicola Winfield arrive at airport. Andrea and Nicola caught a taxi from Randwick at the cost of $30 while Julie and Belinda drove from Campbelltown

After checking in, the girls head to WH Smith to pick up some reading material and purchase Instyle Magazine, $7.50, New Woman $6.50, and Madison $7.50

Determined not to go without her mobile phone Belinda looks for an electrical adaptor but is turned off by the $11.50 price tag

Andrea and Nicola both enjoy a meal from Oporto paying $5.98 each for a small Bondi meal, three cents more than usual. Belinda Maloney instead opts for the $3.95 McDonalds Happy Burger (with cheese) Meal

The girls ogle the Duty Free counter but decide to wait until once inside the departure gates to try and find a cheap power converter and film

On the way to the departure gates the girls momentarily wish they had opted for the healthy sushi lunch alternative but baulk at the $9.50 price tag. They buy three rolls of film ($60) and a $3.50 bottle of water plus $3.30 worth of lollies

After seeing the girls off Julie Maloney hands over the $22 parking fee and heads back to Campbelltown

Qantas crew in fear over hotel change
Steve Creedy, Aviation writer
02 May 2005
The Australian

QANTAS cabin crew staying in Los Angeles say they fear for their safety after the airline moved them to a hotel in the city's crime-prone downtown area.

Angry flight attendants have told their union they feel trapped in the giant Bonaventure Hotel because they are too afraid to venture out after dark on deserted downtown Los Angeles streets. The Flight Attendants Association of Australia said it had been flooded with cabin crew warnings that the area was unsafe. It accused the airline of putting staff in jeopardy to cut costs.

"What we're hearing is that there are so many vagrants and homeless that people are being accosted all the time and asked for money," said FAAA international division secretary Michael Mijatov. "And particularly with women -- half of our flight attendants are women -- they're feeling totally unsafe."

The worst problems so far appear to be cases of aggressive vagrants snatching food or drinks from the trays of Qantas staff visiting a fast-food outlet, but union officials fear a more serious incident.

Crew are also upset the hotel is in a business district that effectively closes down after dark. Qantas previously accommodated crew in three hotels in Pasadena, near Los Angeles, but wanted to consolidate staff in one location.

Qantas executive general manager John Borghetti said the hotel met the airline's stringent security requirements.

"There is no issue with the accommodation as far as comfort is concerned or as far as security is concerned," he said. "Our security people are pretty cautious types of people and they've cleared the hotel and the location."

However, the FAAA said Qantas was believed to be saving about $US20 ($26) per room per night by moving hotels and that it usually booked about 2700 room nights a month.

"It's a lot of money, but if anything happens to someone it will cost them more than that," said FAAA international division assistant secretary Andrew Smedley.

Mr Smedley said the issue was not with the new hotel itself but its location.

He said the FAAA had written to Qantas twice about the Bonaventure change but had been unable to officially review the hotel after the company changed agreed inspection procedures.

The union intended to take the hotel inspections issue to the Australian Industrial Relations Commission.

Airlines told to advertise full fares
Steve Creedy, Aviation writer
02 May 2005
The Australian

EXPECT the cheapest advertised airfares to triple in price next week as proposed government legislation prompts airlines to ditch the dreaded asterisk and fold taxes and charges back into headline prices.

The move means a Jetstar one-way special between Adelaide and Hobart, now advertised as a $19 fare with an asterisk pointing to taxes and charges of $46, would be advertised at its full cost of $65.

And the headline price of international airfares will rise $200-$300 to more accurately reflect their drain on travellers' pockets.

The push to axe the asterisk comes after the federal Government accepted arguments by the Australian Competition and Consumer Commission and consumer groups that relegating taxes and charges to the fine print made it harder to compare prices.

Treasurer Peter Costello announced the Government would amend the Trade Practices Act in what he described as an "an excellent outcome for consumers".

The amendment will also apply to other industries that use component pricing, such as car and computer manufacturers, requiring them to prominently display a single-price figure that includes all costs to the consumer.

The proposed legislation prompted Qantas to announce on Friday that it would change its airfare and package holiday advertisements from May 11.

Virgin Blue, which campaigned strongly against "confusing and misleading" component pricing, said it would make the change from May 10.

Virgin chief executive Brett Godfrey said the move back to all-inclusive pricing was a victory for common sense and fairness.

"People want to know that the advertised amount is what they are going to pay and not get any nasty surprises when they get to the end," Mr Godfrey said.

"Travellers shouldn't have to get out their binoculars to read the fine print and calculators to work out the total price of their flight."

Qantas spearheaded the widespread return to airline component pricing late last year after two court cases threw into doubt an ACCC ruling on the issue.

Virgin labelled the Qantas move as lamentable but said it was forced to follow suit so its advertising was not at a competitive disadvantage.

The decision made airfares seem cheaper but meant advertised base fares could understate the actual cost of a flight by as much as $350.

Qantas executive general manager John Borghetti said yesterday his airline led the first move towards all-inclusive pricing, but abandoned the practice after other international carriers and some travel agents failed to adopt it.

"Having heard what the Treasurer said during the week, we agree with him and we want to be the first to move again," Mr Borghetti said.

"This is not just an issue for the airline industry but also industry in general."

Mr Borghetti said he was hopeful the legislation would mean all players in the travel industry would adopt all-inclusive pricing.

AXING THE ASTERISK

* Qantas return from Sydney/Melbourne/Brisbane to Los Angeles advertised at $1618 plus $280 taxes and charges becomes $1898 from May 11.

* Jetstar one-way special between Adelaide and Hobart advertised at $19 plus $46 becomes $65.

* Other industries using component pricing, such as car and computer manufacturers, will also have to display a single-price figure that includes all costs.

QANTAS Sees Higher Passenger Numbers in March

SYDNEY, May 2 Asia Pulse - Qantas Airways Ltd (ASX:QAN) today said total passenger numbers rose 12.6 per cent in March, compared to the same month last year.

More than 2.88 million people travelled with the airline, with the majority or 2.08 million taking domestic routes.

The number of domestic passengers flying on Qantas, QantasLink and Jetstar rose 15.7 per cent, while capacity grew by 14 per cent.

Jetstar, which started in May last year and competes against Virgin Blue in the low cost market, carried 403,000 passengers.

That was an improvement from February when it carried 363,000 travellers.

Qantas' international passenger number grew 9.1 per cent to 803,000 as capacity expanded by seven per cent.

Total revenue per passenger was up by 11.2 per cent, while capacity rose 9.2 per cent, resulting in a revenue seat factor of 77.9 per cent.

Australia's Qantas says jobs could move offshore as fuel prices rise: report

SYDNEY, May 3 (AFP) - The head of Australian flag carrier Qantas warned jobs could be shifted offshore as the airline moves to reinvent itself in the face of increasing fuel proces, it was reported Tuesday.

Qantas chief executive Geoff Dixon told the Australian newspaper that the airline was looking at changes similar to those that followed its privatisation in the mid-1990s and the challenges of the past five years such as the terrorism threat and SARS.

Dixon said Qantas could not guarantee jobs would not go offshore.

"Obviously with oil prices as they are, we're like every other airline, we've got to re-invent ourselves again," Dixon was quoted as saying.

"I can't guarantee there won't be jobs (going) offshore but I will say the overriding determination of the management of Qantas is to keep as many jobs as possible onshore."

Last year, Qantas unveiled plans to establish a new base in London for 400 of its international flight attendants in a move to save the airline around 18 million dollars (12.9 million US) a year.

The airline employs about 30,000 people, mainly in Australia, and Dixon has previously said it would be "silly" not to look at moving some jobs offshore.

It more than doubled a fuel surcharge on international flights to 60 dollars (46.5 US) last month in response to rising oil prices and also introduced hefty hikes to its domestic fuel surcharge.

In February Qantas reported a record interim profit of 458.4 million dollars (357.6 million US).

Qantas shares were down seven cents or 2.2 percent at 3.16 dollars in mid-afternoon trading in a flat overall market.

Runway perimeter at Sydney airport needs major reconstruction

SYDNEY, May 4 (AFP) - The perimeter of Sydney airport's third runway is collapsing and will need major engineering work, Australian media reported Wednesday.

After only 10 years in operation the runway's sand base is seeping through the retaining sea wall into Botany Bay, the Daily Telegraph said.

The paper said potholes and cracks on the roadway near the edge of the runway have been detected but were not posing any safety problems.

In addition, workers have unearthed a previously unknown reef system at the end of the runway.

The paper said fisheries officials suspect the system may house endangered species of sea horses and fish, meaning that repair work may have to take the protection of the reef into account.

Subsidence problems were identified in 2001 and the company which built the 200-million-dollar (154 million US) runway is planning major engineering work.

Sydney Airport Corporation confirmed a project was planned to repair the sea wall.

"Field trials are being carried out to prepare the final stages of design for a repair program to the sea wall that runs along the third runway," a spokesman said.

The Civil Aviation Safety Authority said the problem posed no problems for aircraft, with the runway itself and the taxiway unaffected.

Meanwhile, the airport in Australia's second city Melbourne reopened its main runway Wednesday after a 50-million-dollar upgrade to prepare for flights by the Airbus A380.

The runway was widened by 15 meters (50 feet) to accommodate the plane, which will be the world's largest airliner when it goes into service.

Melbourne Airport is the first in Australia able to accommodate the A380.

Its chief executive Chris Barlow said this phase of an overall 220-million-dollar expansion was completed ahead of schedule and in time for the Commonwealth Games in the city next year.

National carrier Qantas will receive 12 A380s over a two-year period from October next year. The plane can carry 550 passengers on two decks, 100 more than the largest 747.

Ansett name to fly again in North Queensland
5 May 2005
The Cairns Post

THE Ansett name is set to fly again - as a regional carrier in North Queensland.

A Townsville businessman has registered the name and hopes to launch passenger and freight services by August.

Terry Byrt has even adapted the old Ansett logo and red, black and white colours used by the airline in the late 1960s.

The new carrier will be formed by merging existing small carriers and the purchase of five 50-seat Fokker Friendships.

Mr Byrt said he was using the Ansett name "because everyone knows what it is".

Mr Byrt, who has a background in mining and fishing industries, has formed a private consortium, backed by $20 million funding.

"It's no joke and we haven't treated it like that," he said.

The names Ansett Airways, Ansett Air Freight and Ansett Airways Holdings were registered with the Australian Securities and Investments Commission five weeks ago.

"We've purchased five existing airlines in charter and RPT (regular public transport) operations. Just small ones."

One of the airlines already holds a flying licence for high-density flights, he said. The contracts would be settled after regulatory approval, he said.

Former Ansett staff had already contacted him with their opinions about the proposal, he said.

"A lot of them are saying congratulations, it'll be great to see the Ansett name back in the air.

"Others are a bit more sceptical. We don't propose to be anywhere near the size of Ansett."

Mr Byrt said he hoped the carrier would fly routes to Gladstone, Mackay, Hamilton Island, Townsville, Mt Isa, Cairns, Brisbane and Horn Island in the Torres Strait.

Ansett, founded by Sir Reginald Ansett in 1936, collapsed in September 2001 with massive debts.

Angry agents divert clients around Qantas
Jamie Freed
7 May 2005
The Sydney Morning Herald

Qantas's cut in base commission fees paid to travel agents on the trans-Tasman route had resulted in agencies directing bookings to rivals such as Emirates and Air New Zealand, Flight Centre managing director Graham Turner said on Friday.

Qantas dropped its base commission rate on trans-Tasman flights to 1 per cent in January from 5 per cent, and will lower its domestic payouts by the same amount from July 1.

"Obviously we are booking elsewhere," Mr Turner said. "I think every travel agent would be."

Bureau of Transport and Regional Economics statistics showed Qantas's market share and the number of passengers carried on the trans-Tasman route declined in January compared with the previous year. Air NZ overtook Qantas as the number one passenger carrier on the route.

But on July 1, Air NZ will follow Qantas and reduce its base commission to 1 per cent. In contrast, Emirates pays a 9 per cent base commission to travel agents.

In a research note, Credit Suisse First Boston analysts said the cuts would transfer a key distribution channel to carriers such as Emirates if the trend continued.

"While we expect this will initially be focused on leisure traffic, this could be seen as an initial move by Emirates to increasingly compete with Qantas internationally, prior to the delivery of its 43 A380 aircraft and a more general attack on the business market," the analysts said.

Qantas and Air NZ maintain a key advantage over Emirates: frequency. And while the base commission rate has been cut - hurting smaller agents with little negotiating power - the larger agencies have individual contracts with airlines that include incentives and other forms of payment.

"We're very comfortable with our contractual arrangement with Qantas," Corporate Travel Management managing director Jamie Pherous said.

Jetstar offered no commissions and Virgin Blue and Pacific Blue had moved to an all-incentive model, so Qantas's domestic cuts should have little effect when they are introduced on July 1, analysts said.

"There's always been a love-hate relationship between agents and airlines," Centre for Asia-Pacific Aviation managing director Peter Harbison said.

"Airlines had to toe the line in the past because agents sold the tickets. But because of online buying, the reliance on agents has become smaller."

Qantas Announces All-Inclusive Pricing for Airfares
Corporate Press Release
Sydney, 29 April 2005

The Qantas Group today announced that it would move to all-inclusive pricing for its airfare and package holiday advertising from Wednesday, 11 May.

The Chief Executive Officer of Qantas, Geoff Dixon, said the airline had made the decision in support of the Federal Government's recent announcement that it would amend the Trade Practices Act in relation to component pricing in a number of industries.

"We will be making the change to our advertising ahead of any change to the Act, in the interest of establishing consistency for our customers as quickly as possible," Mr Dixon said.

Qantas currently provides a breakdown of costs in its advertising, providing the base airfare with taxes and charges listed separately.

"We are aware that, with airfares often very low in comparison, customers want the total cost of their purchase clearly spelled out."

Qantas, QantasLink, Australian Airlines and Jetstar will all move to the new advertising style.

^thats beacouse it has to, the law came through just a few days ago ..

Rescue officials say plane with 15 people aboard crashed in northern Australia
By ROD McGUIRK
7 May 2005

CANBERRA, Australia (AP) - A plane carrying 15 people slammed into a hillside in Australia's remote far northeast on Saturday, probably killing all on board in the nation's worst air disaster in almost a decade, authorities said.

The twin-propellor plane was heading for Lockhart River, an Aboriginal community of 350 people in Queensland state known as an artist colony.

Its wreck, burning in dense tropical forest on the side of a hill 11 kilometers (seven miles) from the plane's intended destination, was spotted late Saturday by a search aircraft, Australian Search and Rescue spokeswoman Tracey Jiggins said.

"It's impossible to say at this stage if there's been any survivors. It appears unlikely though," Jiggins told The Associated Press.

Peter Gibson of the Civil Aviation Safety Authority told Australian television's Nine Network the plane had been flying in rain, low clouds and moderate winds when it slammed into the side of the hill.

The Fairchild Metroliner plane, operated by north Queensland-based airline Aero-Tropics, had been due to arrive at Lockhart River at about midday. It had radioed it was about to land before the crash, police Superintendent Michael Keating told reporters.

Two pilots and 13 passengers were aboard, Jiggins said.

The aircraft was en route from Bamaga, a community of 2,000 near the tip of the Cape York Peninsula, about 280 kilometers (170 miles) from Lockhart River, she said.

Keating said Sunday 20 emergency response personnel would be flown to Lockhart River by noon (0200 GMT) and federal accident investigators would accompany them to the crash scene.

"The weather may be a factor; we just don't know at this stage what the cause of this incident is," Keating told Seven Network television.

He said most of those on board were from the city of Cairns, almost 1,000 kilometers (620 miles) south of Bamaga. Others were from far north Queensland, the state capital Brisbane and southern Australia, he said. The passengers included a state police officer, he said.

No names have been released.

The crash was Australia's worst air disaster since two army Black Hawk helicopters collided near the Queensland city of Townsville, killing 18 people in 1996. It was also Australia's worst civil air crash since 1968, when an MMA Viscount crashed near Port Hedland in Western Australia state, killing 26.

Airlines stand by for turbulence on pricing
Nick Galvin
7 May 2005
The Sydney Morning Herald

Qantas, Virgin Blue and Jetstar will be anxiously watching the behaviour of air travellers after the carriers agreed to advertise "real" fares and end the controversial practice of hiding extra fees and charges in small print.

Yet this apparent leap in fares could bring some bargains for travellers - in the short term.

Aviation analyst Peter Harbison said the airlines might have to "absorb a bit of pain" in falling ticket sales as travellers digested the new headline prices.

"I think they [the airlines] will probably watch for a few days to see what the impact is," Mr Harbison said. "If they do see people walking away from these prices they will probably introduce some $1 net fares to make sure people get back flying."

None of the major carriers would be drawn on their plans to counter any temporary downturn in sales, but Jetstar's Simon Westaway said the airline would "try to keep something back".

"We've got to continue to keep the market excited," he said. "We've got to continue to keep the consumer interested - clearly the move to all-inclusive pricing will see a different headline price out there."

The moves were forced on the airlines when the Treasurer, Peter Costello, last month foreshadowed changes to the Trade Practices Act to stamp out the practice of two-part or "component" pricing in aviation and other industries.

The extras loaded on to a domestic fare include fuel surcharge, baggage screening tax, domestic head tax and GST.

Virgin Blue was this week advertising a Sydney-Melbourne fare for $29. However, the actual fare was $68 when $39 in extras was taken into account.

Virgin Blue spokeswoman Heather Jeffery said the airline, which moves to all-inclusive pricing on Tuesday, was only forced into two-part pricing to compete with Qantas. "We think one-price, all-inclusive fares is the honest way to advertise," she said.

Qantas said it would change its policy from Wednesday. "We are aware that, with air fares often very low in comparison, customers want the total cost of their purchase clearly spelled out," said its chief executive, Geoff Dixon.

It's a move the Australian Consumers Association has long advocated. "They [the airlines] are treating the consumers like idiots," said the association's Norm Crothers.

"If you caught a taxi from your home to the airport tomorrow and the taxi driver says it's $5 to the airport and then when he got there he said, 'This is the airport parking levy, this is the registration, this is the insurance, this is the third-party insurance, this is the fuel levy', you wouldn't be very happy - you'd probably thump him. But this is what the airlines are doing - they are applying that sort of stunt and we put up with it."

However, it may not all be good news for the consumer. Folding fees, charges and levies back into one fare reduces the visibility of the extra imposts.

"There is one good side to having charges isolated in that way," said Mr Harbison. "That is that the public is made very much aware of how much it is being held to ransom by the Federal Government and the airports."

TAKING FLIGHT

A typical Qantas Sydney-Melbourne flight sold through Flight Centre costing $120.45 includes the following taxes and levies:

$10.95 (GST)
$24.18 (fuel levy)
$2.59 (safety and security charge)
$7.73 (domestic passenger service charge)
Source: Flight Centre

Qantas Says Jetstar Unit Considers Asian Destinations
9 May 2005

SYDNEY (Dow Jones)--Jetstar, the Australian discount airline operated by Qantas Airways Ltd. (QAN.AU) is considering launching services to several destinations around the region, including the Indonesian tourist island of Bali.

"Asia is definitely in the frame and has a lot of potential," Jetstar corporate affairs manager Simon Westaway said Monday.

"There are some destinations thoughout Asia that we see a great deal of interest," Westaway said.

While he declined to put a time frame on any possible push into Asia, Jetstar chief executive Alan Joyce said early last month that the group wanted to be flying short-haul international routes within two years.

Westaway said the airline is scheduled to take delivery of another two Airbus A320s shortly, which will be in the sky in July. It will be operating a full fleet of 23 of the A320 planes, which are capable of comfortably flying five-and-a-half hours, by mid-2006.

"That means there are destinations in Asia which the A320 is capable of reaching," he said.

"But we've still got a lot of work to do, and we are working through the regulatory framework," he said.

He also said Jetstar is close to launching services to New Zealand and while the group is still finalizing overall plans for the market, including possible destinations and schedules, Westaway said Jetstar could be flying across the Tasman as soon as September.

"We are pretty well advanced with the New Zealand markets we seek to enter," Westaway said. "We will seek to be in the market sooner rather than later," he said.

The carrier's expansion will add to the already-fierce competition on trans-Tasman routes, with Qantas, Air New Zealand Ltd. (AIR.NZ) and Virgin Blue Holdings Ltd.'s (VBA.AU) Pacific Blue offshoot along with Emirates Airlines (EA.YY) already offering Australia-New Zealand services.

"We are working through with Qantas as to how to best we can fit into the mix," he said.

While he declined comment on how Jetstar would work with and compete with Qantas, he noted that Jetstar already competes against Qantas on several key routes.

"We will compete vigorously in any market we enter, and we would treat the trans-Tasman market as we would treat any other," he said.

Meanwhile, Westaway said the carrier remains committed to launching services to other domestic destinations, including Perth.

"We haven't put a date on it but we will in that market at some point in time, but I think we are looking at a 2006 proposition for the west," he said.

Plane's warning system too late
10 May 2005
The Australian

AN aircraft that crashed in north Queensland at the weekend, killing all 15 people on board, was about to be fitted with a sophisticated warning system that could have prevented the crash.

An enhanced ground-proximity warning unit that would have alerted pilots that they were flying towards dangerous terrain was required to be installed by June 30 as part of a mandatory nationwide safety upgrade for all passenger aircraft.

The Aero Tropics Metroliner slammed into the 400m-high South Pap ridge on Saturday after failing to clear its jungle-covered crest by just 50m while preparing to land at the Lockhart River Aboriginal community on Cape York Peninsula.

Cut-price fares just the start for Jetstar
Stephen Dabkowski
10 May 2005
The Sydney Morning Herald

Now it's gunning for the upmarket end of the market. Stephen Dabkowski reports.

Phase two of Jetstar is about to begin. Having established itself as a profitable cut-price airline, Jetstar is now going upmarket, offering something new in a major marketing campaign to be unveiled to coincide with its first birthday on Saturday, May 28.

The new campaign will still concentrate on low fares, but will also emphasise hot meals to be served from July and the introduction of frequent flier points and onboard entertainment.

The blurred lines between itself and owner Qantas will become even hazier.

That will also allow Jetstar to begin its international operations to New Zealand and other destinations in Asia, taking over Qantas routes where necessary.

Yesterday the official line was that operations to New Zealand would certainly begin later this year - but September, as some news reports suggested, was too ambitious.

Jetstar's shift to a broader market follows a new strategy from Virgin Blue, inspired by its new owner in Chris Corrigan's Patrick Corp.

The battle for the business traveller is about to shift the focus from just a price war. Discount airfares as low as $1 may soon be a thing of the past.

Jetstar's new marketing campaign is still being finalised by Melbourne agency Dewey & Horton.

Ted Horton (the man behind the last four Liberal Party election advertising campaigns, including last year's interest rate scare strategy) says the establishment of the Jetstar brand has allowed the airline to expand its reach.

"It was the most successful launch of an airline anywhere in the world last year," he boasts.

Jetstar's website records about 20,000 hits a day and the company has grabbed a 10 per cent share of Australia's aviation market.

The multi-million dollar advertising campaign planned for the end of the month followed a $15 million advertising blitz which accompanied the airline's launch.

The creative team behind Jetstar has always been small, led by chief executive Alan Joyce, but effective. Plans for the new airline began in secret in Sydney in December 2003, when 12 focus groups around Australia were quizzed about what sort of discount airline they might support.

A handful of executives, led by Joyce - and with Horton advising in the background - worked from a small office in Sydney's CBD, away from Qantas headquarters to keep the new airline secret.

The focus groups were clear what they wanted.

"What we found were a few characteristics they wanted from an airline," Joyce says. "They wanted a professional airline which had safety and security taken for granted. Being part of the Qantas group was a big advantage for us, so we wanted to make it clear that we are part of the group.

"They also wanted an airline to project an Australian image - they wanted an open, accessible and egalitarian airline. They also wanted us to have an image of fun as well."

Based on this research, Horton offered only one option as the face of the airline - Magda Szubanski.

"Magda is much loved and she's also fun. We couldn't allow ourselves in an image sense to compete with Qantas. We needed something different. Everyone warms to all the characters played by Magda (including Sharon in Kath & Kim) and we knew she would be a great fit," Horton recalls.

Without overtly saying so - Jetstar was also trying to get as far away as possible from Virgin Blue's sexy air hostess image.

The next two tasks were to agree upon a name and colour for Jetstar.

"We wanted a name which linked it back to Australia," Joyce says. "The star in our logo comes from the small star on the Australian flag. It is the only five-pointed star on the flag, representing our small, humble beginnings."

While they were researching names, Jetstar's marketing team broke them into four categories - Australian-orientated (Ozjet - now taken up by Paul Stoddart - and Aussie Airlines), quirky (Wow Airlines, Bravo One), low-fare (Fare Go airlines, Fares Fair Airlines) and those revolving around the word jet.

"Jet in the name worked because people like the cleanness of it, so we were considering Jetone, Jet X, Jet Black and even Jet Stream," Joyce says. "But in the end we kept coming back to Jetstar. Jet worked all the time with focus groups because it described in a single word we are an airline."

Next came the colour. The executive team at Jetstar tested purple, black and silver before deciding on orange.

"We picked orange because no-one owned orange in the marketing environment and it is a colour which stood out, particularly in ads and it reduced print costs because you are only using one colour," Joyce recalls.

As it turned out, orange is also the favourite colour of Qantas chairwoman Margaret Jackson. The decision quickly got the board's rubber stamp.

Jetstar is a fully owned subsidiary of Qantas and was formed out of the defunct Impulse Airlines.

Qantas took over 14 near-new Boeing 717 twin-jets in 2001 from Impulse. Those aircraft, plus six new Airbus A320 planes, now operate under the Jetstar banner on east coast routes. Seventeen more A320 aircraft are due to be put into service in the next year - an indication of how confident Jetstar is of achieving its growth strategy.

Joyce and his team have not finished refining the marketing message yet. The next round of ads will revolve around the airline offering hot meals and possibly even inflight entertainment.

"But one thing is for certain - we will never deviate far from our simple message, which has been the core of our success, which is low fares. The game plan is clear for us," Joyce says.

Australia to launch direct flights to Antarctica

SYDNEY, May 11 (AFP) - Direct flights to Antarctica will soon be available from Australia after the government announced Wednesday it will build a 3.6 kilometre (2.2 mile) runway at one of its bases.

The flights would leave from the southern island state of Tasmania, with trial trips expected to be operating by 2006-2007, Environment Minister Ian Campbell said.

The government would spend 46.3 million dollars (35.9 million US) over four years building the glacial blue-ice runway and supporting the air link between Hobart and Australia's Casey station which lies about 2,500 kilometres (1,553 miles) from the South Pole, the minister said.

Tasmania is already the base for Australia's research on and shipping services to Antarctica and the government wants to encourage other international programmes to use the state as the base for their activities.

The air service would use long-range, jet aircraft which could fulfill the dual function of carrying out surveillance on Southern Ocean fisheries during the 9-10 hour return trip, Campbell said.

"Australia claims 42 per cent of Antarctica -- but unlike many of our counterparts, has no efficient means to access the continent," the minister said in a statement.

"The air link... will improve access to Australia's research stations. This will in turn cut the time it will take to gather and relay important data."

The 3,440 kilometre (2,138 mile) link will also allow quick access to Australian stations in the event of an emergency.

However, leader of the Greens opposition party in Tasmania Peg Putt said the air link could increase tourism and lead to damage to Antarctica's wilderness.

Australia's Antarctic team has used two aircraft, ski-equipped CASA-212 twin-engine turboprop aircraft, to travel between its three bases on Antarctica since December 2004.

Jetstar on top in Virgin blue
Steve Creedy
13 May 2005
The Australian

The airline's CEO is showing how it's done, writes Steve Creedy

LOW-COST carrier Jetstar expects to have a 12per cent market share by the end of the financial year, driving another nail into Richard Branson's boasts that Virgin Blue could take 50 per cent of the market.

As the Qantas offshoot approaches it first birthday on May 25, Jetstar boss Alan Joyce is thumbing his nose at the naysayers who claimed starting a low-cost subsidiary of a full-service airline was a recipe for disaster.

The carrier has emerged from a sometimes rocky launch to become a significant player in the market and a big thorn in the side of Virgin Blue.

It is already making money, with earnings before interest and tax of $19 million for the first half of 2004-05, and Joyce saying profitability remains "ahead of expectations".

It also expects to beat passenger predictions and carry about 4 million people in its first financial year.

Operationally, it is achieving turnaround times of less than 30 minutes and its on-time performance has consistently topped the other major players. Dispatch reliability on its A320s is said to be ahead of the Airbus global average.

Joyce is particularly pleased the carrier is now widely recognised among eastern state travellers, including trendy "prosumer" 18 to 30-year-olds that Qantas has trouble reaching.

"The research we've done in the eastern states shows we're now up to 90 per cent recognition, which is very important for a retail business," he says. "When you want to get people to come to jetstar.com they just have to know the name.

"We're also getting the characteristics that we wanted out of the brand -- ownership of the low fares, which is crucial, but also to be seen as fun, egalitarian and Australian."

Looking back over the first year, Joyce nominates the celebration of the airline's two millionth passenger and the enthusiasm of the airline's staff as the high points.

He is also pleased one of his riskier strategies -- flying to Victoria's Avalon Airport, near Geelong -- appears to be paying off.

The airline expected to get 250,000 to 300,000 passengers through Avalon in the first year of operation but looks like hitting about 400,000.

Joyce says research shows about 30 per cent is traffic that would otherwise have flown through Melbourne's Tullamarine Airport but switched to Avalon because it was cheaper.

Another 30 per cent comes from Avalon's natural catchment of Geelong and Melbourne's western suburbs and the rest is interstate traffic heading for tourist attractions such as the Great Ocean Road.

The airline says much of its growth has been through developing new leisure markets and attracting people who previously were not flyers.

However, March traffic figures showing a fall in Qantas mainline domestic traffic and passenger numbers suggest there has been an element of cannibalism.

Nonetheless, Joyce hails the strategy as a success.

"I think one of the great things about the Jetstar strategy is that it really did define the marketplace here in terms of Jetstar and Virgin being the budget airlines and Qantas being the full-service airline," he says.

"Qantas got a halo effect there; the research said that people just saw it differently after the entry of Jetstar, and the strategy slowed down Virgin's growth in the overall domestic market. Jetstar and Qantas mainline are making money domestically and are growing.

"For the first time, we've now got Virgin thinking that they are not going to go up to 50 per cent market share. They're happy with 35." Of course, not everything has been smooth sailing.

Jetstar started out with no frequent-flyer scheme but was forced by a customer backlash and a fear it would lose business to Virgin to offer Qantas points on its fully flexible fares. It also now gives customers with more expensive tickets priority boarding, although it plans to retain unallocated seating for reasons of efficiency.

The airline buys the points from its parent but says it recovers costs by prompting people to buy more expensive tickets and attracting back customers.

Joyce, who was keen to pre-empt Virgin's long-awaited move to introduce a frequent-flyer scheme, says the Jetstar program has produced a revenue gain that offset its cost.

"What we've found is while it is costing us money and it will increase our cost base in having it, what we are getting out of it is that we have captured back on some routes, the big business routes, an immense amount of the business traffic that I think we lost," he says.

Another backlash prompted changes to the carrier's controversial policy that people who failed to check in on time lost their tickets.

Jetstar still closes flights 30 minutes before departure but now charges a fee of $50 for individual latecomers and $100 for families to book on another flight.

"We were too harsh at the start and it was causing us a couple of difficulties," Joyce says. "With the passengers, I think there was a danger that they went over to Virgin ... because they were so pissed off with Jetstar."

However, Joyce has no plans to rest on his laurels. Now bedding down its existing network, Jetstar is planning new services to the Northern Territory, Perth and New Zealand by the end of the year or early next year.

It continues to grow as it replaces its fleet of Boeing 717s with 177-seat Airbus A320s. The bigger planes will allow it to reduce frequencies on some leisure routes and redeploy the aircraft to new destinations.

It is already 2 1/2 times the size of Impulse Airlines and expects capacity in terms of available seat kilometres to grow by 30 per cent in its second fiscal year.

So far it has added eight A320s and will bring on board another 15 by the middle of next year. It has applied to the Civil Aviation Safety Authority for extended twin engine operations certification that will allow it to take a shorter route to Perth and also fly overseas.

New Zealand will be the airline's first international destination but Joyce says it will look at other possibilities -- such as Bali or the South Pacific -- within the four to five-hour range of its aircraft.

'We are adding extra features that give people the choice but don't increase our cost base' Alan Joyce Jetstar CEO Joyce says a big element of the trans-Tasman market has become price-sensitive and there are several destinations ideally suited to the low-cost carrier. But he says reports that the airline will launch transTasman services by September are "too aggressive".

"There's a possibility that will happen this year - let me phrase it like that - and New Zealand will be the first off the rank," he says.

The airline will launch a new advertising campaign, also featuring Magda Szubanski, to coincide with its first birthday. Joyce says Jetstar's top objective and customer proposition remains price.

But he believes the new features such as the portable digEplayer video-on-demand unit will make longer sectors more palatable to customers and help counter Virgin's moves to upgrade its offering .

"We are adding extra features that give people the choice but don't increase our cost base," he says.

"They are the in-flight entertainment, the digEplayer, and the first one will be on an aircraft, we hope, on our birthday on May 25.

"Then we have hot meals appearing and we also have added features appearing on our website, vouchers and opportunities for people to prepay for activities."

It plans to put the digEplayers on A320 flights longer than 75 minutes, charging $5 for a journey lasting up to two hours and $10 for a longer trip.

Joyce is confident the devices will be a winner for the airline, despite a decision by European low-cost operator Ryanair to abandon them.

"Ryanair only has very short markets and we think the take-up will be bigger here," he says.

"The digEplayer people are very confident and we've gotten a very good deal out of them that's a very low-risk profile for us."

Looking at challenges coming up, Joyce quickly nominates fuel prices, the economy and, of course, the battle with arch-rival Virgin Blue.

He views Virgin as an aggressive competitor and says the airline's move to pre-empt the arrival of Jetstar by boosting capacity led to hard-fought battles in several markets.

"We've got a lot of growth coming in and that's always a challenge for us, picking the right markets at the right time and the competitive environment around that," he says.

"But I think we've doneOKin the last year and hopefully we can continue with the successes by picking the right destinations."

I just hope the Australian market sustains 3 carriers. It would be a shame to see one of them die off.

It's quite interesting watching the Australian aviation market. For a country of about 20 million, 3 main airlines is quite a lot of competition.

Qantas push for cameras
Steve Creedy
13 May 2005
The Australian

QANTAS will ask for changes to workplace laws so it can legally install covert surveillance equipment to monitor baggage handlers and other airport staff.

Most states have workplace surveillance legislation that prevents Qantas from carrying out covert surveillance inside aircraft.

The airline's head of security, Geoff Askew, said it had extensive camera surveillance in its baggage area but these were positioned where the staff could see them. Qantas now wants to increase that surveillance and add hidden cameras in aircraft holds.

"What we're seeking is co-operation from the state governments to review that legislation to carry out covert surveillance where we deem appropriate," Mr Askew said.

Qantas security came under scrutiny again this week after Australian Federal Police linked a cocaine-smuggling operation to baggage handlers at Sydney International Airport.

Mr Askew said the difficulty with installing hidden cameras in aircraft was that the planes travelled between states. "That's why we need a whole-of-government solution and not just one state," he said.

Qantas is also talking to the federal Government about increased screening for employees in baggage handling.

At present some workers with the appropriate security clearance do not need to go through screening.

Mr Askew said the airline would continue investigating all facets of baggage handling and airport security, as well as a program of ad hoc employee searches. But he said it was important not to overreact to the drugs controversy.

Qantas chief executive Geoff Dixon said the airline regretted the drug-smuggling allegations but defended the carrier's operational and security procedures as among the world's best.

Lightening pilots' loads - Jetstar Case Study
Kelly Mills
10 May 2005
The Australian

PDAs are reducing an airline's turnaround times, says Kelly Mills

LOW-COST airline Jetstar is using handheld devices to boost its bottom line by shaving critical minutes off the time it takes to get its aircraft in the sky.

Time is money to airlines and Jetstar operates on a 25-minute turnaround schedule.

Reducing this time over a number of sectors could boost the airline's balance sheet, Jetstar flight operations fleet technical support manager Captain Maurie McBain says.

"The quicker you can turn an aircraft around, the more flying you can do during the day and the more money it makes for the company," he says.

"If we can reduce the turnaround time by just a couple of minutes, over eight to 10 sectors, we may save between 10 and 20 minutes per day." Pilots working for most of the world's low-cost airlines must calculate manually the aircraft's weight and balance before takeoff, unlike bigger airlines, which receive this information automatically from a load control centre.

Taking into account an aircraft's empty weight, fuel on board, passenger load and baggage weight, a pilot works out the aircraft's weight and balance for takeoff.

To comply with Civil Aviation Safety Authority regulations, airlines must keep all load charts on file for three months.

Most budget-priced airlines use a paper-based system for all this.

McBain says Symbol PDAs, introduced last May when the airline was launched, has reduced mistakes.

Under strict audit requirements, Jetstar conducted a small survey of pilots to see how long they took to fill in the complex form.

"We got a bunch of pilots in and gave them some data and asked them to produce a load chart as quickly as they could," he says.

"This was under controlled circumstances, sitting at a desk instead of on a flight deck, which is a bit more hectic. About 80 per cent of the people had made some sort of mistake." Captain McBain said most of the mistakes were minor and along the lines of ticking a wrong box or not ticking at all, rather than inaccurate calculations.

The study showed production of the charts could take between seven and 20 minutes.

"When you're trying to turn a plane around in 25 minutes you want the calculation to be quick. The PDA gives us speed and accuracy," McBain says.

Qantas-owned Jetstar uses about 30 handheld devices, one for each of its 22 aircraft, and has spares at each airport and at head office.

The hardware cost more than $100,000 but the program to calculate weight and balance was developed in-house.

PDAs are used to calculate the load chart, but pre-flight processes are still manual.

Information from the baggage area about the number of bags loaded into each compartment of the aircraft, and from the customer service officer on the number of passengers on board, are given to the pilot on paper before takeoff.

This information, and the quantity of fuel on board, together with the aircraft's operating weight already stored, produces the load chart.

"Realistically from start to finish you could do a load chart quite comfortably in three to four minutes," McBain says.

The pilot prints out the chart on a mobile thermal printer, signs it off and gives it to the customer service officer for filing.

McBain says Jetstar is considering other uses for the PDAs.

"We hope in the future to use the PDAs for pilot records, showing the number of takeoffs, night flights, etc, that they do," he says.

At present this information is recorded manually.

"We are hoping to produce a program that tracks this information so that at the end of the day the pilots just dock the PDA and the information will go to our operations department," he says.

Baggage handlers may also be equipped with PDAs so they can send information to pilots using Bluetooth.

McBain says the airline is considering a study later this year to see if this would be worthwhile.

McBain says Jetstar is planning to use the PDAs to track fuel usage. After an aircraft has been fuelled, a receipt is issued and at the end of the day a log is filled out, with the information passing to a clerk in Melbourne, who reconciles the entries against bills from the oil companies.

THE PROBLEM

Jetstar needed to keep its costs low, which meant pilots had to manually conduct pre-flight checks.

THE PROCESS

To minimise airport turnaround times the airline needed to automate the production of load charts by pilots.

THE RESULT

A program using Symbol handheld devices enables pilots to complete load charts quickly and pay greater attention to other pre-flight checks.

Two die as light plane crashes and bursts into flames
16 May 2005
The Australian

TWO men were killed last night when their light aircraft crashed and exploded into flames about 100km north of Adelaide.

The two-seater single-engine aircraft crashed into a paddock at Stonefield, near Truro on the cusp of the Barossa Valley.

Police were last night investigating the charred wreckage of the plane to identify its occupants, believed to be a 17-year-old youth and a 63-year-old man from Adelaide.

The tragedy happened only metres from an airstrip, and it is believed the pilot was trying to take off at the time of the accident.

The Australian Transport Safety Bureau is sending a team from Canberra this morning to investigate the cause of the crash.

Three police officers guarded the site overnight until the bureau's investigators arrived.

A police spokesman last night said the cause of the accident was unknown.

"We have no ideas as to the cause at this stage, but we will prepare a report for the state coroner and the ATSB will investigate into the cause.

"It happened about 20-30km out of the Barossa Valley ... the weather was fine, it was a clear day." The spokesman said the victims' families had been informed but would not confirm if the pair were related.

The accident comes just over a week after 15 people were killed in the Lockhart River air disaster, Australia's worst plane crash in almost 40 years.

In that crash, an Aero-Tropics Metroliner slammed into a 400m-high ridge while preparing to land at Lockhart River on Cape York Peninsula. Investigators are examining the plane's black box and in-flight voice recorder, looking for a potential cause of the crash.

Jetstar may have to fasten its seatbelt
Tansy Harcourt
16 May 2005
Australian Financial Review

The carrier is approaching a difficult growth phase, writes Tansy Harcourt.

Behind the secure doors of Jetstar's head office in Melbourne, a large model of a Virgin Blue aircraft sits for all staff to see.

For Jetstar chief executive Alan Joyce, keeping the competition in sight is a critical component in the budget airline's success.

"Virgin Blue is constantly the major focus. If I ask one of our revenue managers what the lead-in fare on Brisbane-Rockhampton is for Virgin on Tuesday I expect them to know it straight away," Mr Joyce said.

And they do. Mr Joyce estimates that Qantas-owned Jetstar and its arch rival Virgin Blue keep such a close eye on each other's air fares that within an hour of either one of them setting a new price, the other has reacted.

"You've really got to know what the competition is. If we put a fare in the market they will match it or react to it within an hour," Mr Joyce said.

Tough head-to-head competition between the two discount carriers has been a boon for consumers, who are benefiting from an extended period of discount air fares without precedent in this country.

But the air fare war has had a far more sinister impact on the profit growth prospects of Australia's airlines.

So far Virgin Blue has been the only one to stumble, while Jetstar and parent Qantas appear to have avoided the turbulence.

While Jetstar produced a better-than-expected first-half operating profit of $19 million, rival Virgin Blue will reveal this week as much as a 15 per cent drop in full-year profit.

The airline, now controlled by Chris Corrigan's Patrick Corp, has suffered from the brutal price war, soaring oil prices and too fast an increase in capacity.

At first glance the two airlines appear to be travelling in opposite directions on the path to success or failure. But the reality is that Jetstar like Virgin Blue, a phenomenally successful start-up is just about to enter the same difficult growth phase that caused its rival to come slightly unstuck.

Jetstar has ambitious growth plans that include video-on-demand and international flights by the end of calendar 2005. The airline is targeting a capacity increase of 30 per cent in 2006, including flights to New Zealand.

To be sure, it's a slower rate than Virgin Blue's 60 per cent capacity growth last year, but it's still enough to cause a few logistical headaches.

Mr Joyce said he was well aware of the challenges facing Jetstar in moving from successful start-up to established carrier.

"What we have to do is digest that growth," he said.

"There are a few factors that are critical: keeping the efficiencies and making sure we don't get bloated as a result of growing too fast, picking the right routes, and the third thing is that we are part of the Qantas group and we don't want to cannibalise them."

The third point, cannibalisation, has been a problem for flagship carriers such as British Airways after starting low-cost airlines.

So far Qantas and Jetstar have managed to divide the market nicely so that the high-yielding passengers on key Qantas routes such as the busy business route of Sydney-Melbourne stay with the main carrier, while the holiday travellers on routes such as Melbourne-Gold Coast are pushed onto Jetstar.

The strategy has helped Qantas pull down its overall domestic costs per seat and contributed to its strong profit result for the half year.

But analysts believe the decision to switch some Qantas services to its lower-cost carrier has annoyed many once-loyal passengers and provided an opportunity for Virgin Blue.

"We believe that Qantas's domestic stranglehold is eventually subject to challenge from a fuller-service version of Virgin Blue," said Merrill Lynch analyst Simon Mitchell.

Virgin Blue has started making moves on Qantas's high-yielding business customers.

In the past few months it has announced flexible, refundable tickets, and it is working on its own frequent-flyer program.

Under the close watch of new majority shareholder Patrick, the airline is expected to keep a better eye on costs and productivity than it has in the past few years.

While the two airlines eyeball each other and look for the next way to get ahead, their paths appear to be moving closer together.

Hopes for air alliance revived
Scott Rochfort
17 May 2005
The Sydney Morning Herald

Qantas and Air New Zealand won a consolation point in their campaign to form a trans-Tasman alliance yesterday when the Australian Competition Tribunal overturned the local competition watchdog's September 2003 rejection of the deal.

Qantas abandoned plans to take a 22.5 stake in Air NZ eight months ago after New Zealand's High Court supported a similar rejection of the alliance by the NZ Commerce Commission.

But the competition tribunal yesterday ruled in favour of the airlines, reviving talk that some form of deal might be resurrected in the future.

In handing down the tribunal's ruling in Sydney yesterday, Justice Alan Goldberg said the decision had been swayed by the growing competition from Emirates and Pacific Blue over the Tasman.

"We were satisfied that Emirates has made a commitment to the trans-Tasman market at least for the five-year period for which authorisation was sought, and that Pacific Blue is committed to the trans-Tasman market, and that both airlines would attract passengers from Qantas and Air New Zealand if the alliance sought to raise its prices or restrict its capacity," Justice Goldberg said.

"Although we reach a different conclusion to that reached by the [Australian Competition and Consumer] Commission, it should be pointed out that at the time the commission made its determination, Pacific Blue had just started its trans-Tasman flights and Emirates had not sought to promote its brand and build up its schedules across the Tasman in the manner it did between the time of the determination and the time at which the hearing commenced," he said.

The ACCC rejected the proposed Qantas-Air NZ alliance in September 2003 on the grounds it would result in higher air fares and less choice for travellers.

This was one month after Emirates entered the trans-Tasman route and well before Pacific Blue started its maiden Brisbane to Christchurch flight in January 2004.

"We will continue to talk to Air New Zealand about opportunities without breaching competition laws," a Qantas spokesman said.

Qantas and Air NZ said they would read the tribunal's findings before making further comment.

Air New Zealand's head of corporate communications, Mike Tod, said: "We will not be making any comment until we digest the contents [of the findings]."

Chief executive of the Centre for Asia Pacific Aviation's consulting arm, Andrew Miller, said the tribunal's findings would boost Qantas and Air NZ's arguments that they are disadvantaged against "hub" carriers such as Singapore Air and Emirates.

Despite the NZ High Court killing the alliance last September, Mr Miller said the tribunal's ruling would give a clearer picture for both airlines on where they could go next.

Both airlines have continually hinted about cooperating in some operational areas.

Virgin denies it is about to start a loyalty program
Rhys Haynes and Liliana Molina
18 May 2005
The Courier-Mail

DESPITE market speculation, low-cost carrier Virgin Blue Holdings has denied it will launch a $60 million frequent flyer program as part of its profit announcement today.

Market analysts have speculated the airline could spend $60 million to start up a loyalty program to build market share and increase its passenger load factor -- the amount of paying passengers it carries on average -- by 5 percentage points over five years.

The speculation comes as the airline is expected to post lower annual earnings, in line with guidance.

It will be the first report from chief executive Brett Godfrey since ports operator Patrick Corp increased its stake in the airline to take majority control in April. Mr Godfrey said the company had been looking at the loyalty program idea "for some time".

"But we are not going to be announcing anything like that," he said.

Analysts say the profit announcement will be examined for signs of a change of strategy or business model driven by Patrick chief Chris Corrigan to boost the airline's earnings. Mr Godfrey acknowledged the company had to focus more on its "bread and butter" but denied Patrick Corporation's 65 per cent share impeded its introducing new products.

"I'm very entrepreneurial," he said. "Chris (Corrigan) is probably less so. But in terms of the things we do it's initiated in our business development unit."

Australia's Virgin Blue FY net profit hit by fuel costs, competition
17 May 2005

SYDNEY (AFX) - Virgin Blue Holdings Ltd said its full year net profit was hurt by increased fuel charges as well as greater competition following Qantas Airways Ltd's start up of rival low-cost carrier Jetstar a year ago.

Virgin, now majority owned by transport logistics group, Patrick Corp Ltd, reported net profit for the year ended March 31 fell to 138.24 mln aud from 158.5 mln a year earlier.

The result was in line with the budget carrier's previous guidance that its annual net profit would be below last year's result by 10-15 pct.

In a statement Virgin Blue said its financial performance in the year to March 31 was affected by record increases in the cost of jet fuel and the continuing escalation of airport charges.

Total operating costs rose 28.6 pct to 1.47 bln while revenue rose 22.5 pct to 1.67 bln.

Virgin Blue said these challenges will be carried forward into 2005-06, with the dual threats of record fuel prices and continuing yield pressure foremost.

'Guidance given by management earlier this year has changed little, and the uncertainty of unchecked airport pricing only adds to these concerns,' the airline said.

But it remains optimistic, saying that in the highly competitive domestic environment, Virgin Blue maintained its 2004 position, controlling one third of the market.

In contrast, it said Qantas' market share dropped to just over 50 pct, having passed some 12 pct of its share to Jetstar during the last 12 months.

Virgin Blue said the next 12 months will be a period of consolidation for the company, with more moderate levels of capacity growth planned, down from the growth of 50 pct experienced in 2003-04 and 40 pct in 2004-05.

It said less capacity growth will allow the airline to focus on product and service development, and on improving the quality of its revenue streams.

'Having secured over 30 pct of the Australian domestic market, we are now focused on strengthening our network, developing our product for the business market and steadily building our presence as the low-fare value-based carrier in our region,' Virgin Blue chief executive officer Brett Godfrey said in a statement.

'We now have the size, scale and frequency to truly address the needs of Australia's business travellers, and we are determined to bring even greater value to business travel, just as we brought lower airfares permanently to the leisure market.'

Godfrey said the airline will introduce further innovative initiatives this year that will help drive higher yielding business while keeping its cost base competitive, 'and ensuring it does not lose touch with the price sensitive leisure segment'.

(1 usd = 1.32 aud)

Selling a cheap, upmarket airline
ELIZABETH KNIGHT
19 May 2005
The Sydney Morning Herald

Virgin Blue's chief executive, Brett Godfrey, has a dilemma. He has to promote the image of Virgin as a value airline while pushing it as an upmarket carrier that appeals to the business market.

Right now he knows that while his cost base, apart from fuel, is largely under control and looks good by global comparisons, his yields are constrained because he is unable to compete at the upper end of the market with Qantas.

Qantas's budget airline, Jetstar, is eating into Virgin's market at the bottom end, but Virgin has not managed to make serious inroads into the business market where travellers are prepared to pay a premium for tickets.

There are plenty of differences between Qantas mainline and Virgin. Top of the list comes the frequent flyer program.

Regular travellers - not the leisure market - want to earn free flights. Corporate flyers reckon it's one of the perks of travelling.

They also want lounges at all major ports and they want frequent flights on the main routes.

Those who have to get to the airport every couple of weeks want all these things that make travelling easier.

Qantas has them but to date Virgin doesn't.

Godfrey has decided to bite the bullet on some of these concessions. In other words, he needs to position Virgin well ahead of Jetstar by making the airline user-friendly to regular travellers.

Over the past couple of months Virgin has introduced a policy that, for a price, means travellers who don't make their flights don't lose their tickets and can catch the next available flight.

But that's just the beginning. Virgin will now certainly be looking at introducing a frequent flyer program, one that is attached to a major bank credit card.

As Godfrey says, "Jetstar has been eating our lunch ... we have to take some of Qantas's dinner."

He's certainly right about that. The earnings before interest and tax released by Virgin yesterday for the half year to March was down 9.6 per cent. Qantas improved EBIT for the half to December by 20 per cent from its domestic mainline and Jetstar operations.

A major contributor to this was Qantas's better hedging policy for fuel costs. The other outstanding difference was Qantas's frequent flyer credit card. It's a neat profit centre.

Virgin will clearly be trying to replicate Qantas's success with a frequent flyer offer. It begs the question of why it has taken so long for Virgin to jump on board the program - the answer being that with traditional load factors at 80 per cent, why would it give away seats?

Fair enough. But thanks to the capacity overloading that both airlines have engaged in over the past couple of years, there is plenty of room for Virgin to make something of those spare seats.

That Qantas has no real competition in the rewards market has given it ample opportunity to reduce the currency of its points and reduce the ability to use them.

But will a frequent flyer program and some extra allowances be enough? It might go some way but there is more to it than that.

Aspirational flyers are like aspirational shoppers. Shoppers will choose Myer over Target if the prices are comparable. People view Qantas mainline as the business airline and Virgin as the economy airline.

This is where Godfrey will have difficulty. The pitch of his seats stacks up better than the marketing pitch.

This is all a medium-term objective. In the short term and on the cost side, Godfrey yesterday outlined a series of measures to tweak the business.

These include a better reservation system that will allow it to take feeder traffic from offshore airlines, a slightly better enterprise bargaining agreement with staff, and better scheduling.

It will all assist at the margin.

But sadly Virgin is still hostage to fuel prices and the general state of economy.

If fuel prices, which sliced $70 million from profits in the past year, fall then Virgin (and Qantas) will be major beneficiaries.

It they rise then things get worse because the airline has no hedging.

A softening in the economy will be yet another blow for the industry. Some downside can be mitigated by better cost performance, but ultimately most of Virgin's performance is now largely out of its control.

After filling the Ansett vacuum, Virgin Blue has run out of levers to pull and may settle for stability
STEPHEN BARTHOLOMEUSZ
19 May 2005
The Age

AIRLINES have lots of financial and operational leverage. For most of its history, Virgin Blue rode that leverage into the vacuum that Ansett left. Today the leverage is working against the carrier.

While the profit dip announced yesterday was in line with expectations Virgin Blue itself had downgraded, the 13.2 per cent fall was the first setback for the cheeky carrier in its relatively short but remarkably successful history.

Virgin Blue is suffering a form of growing pains. It grew, deliberately, too fast and will now have to take it easy for a while waiting for the economics of its businesses to realign themselves. Having almost doubled its capacity in the past two years to ensure it maximised its share of the post-Ansett and post-Jetstar market, the airline will add only two new planes this year and appears to have settled for its one-third of the domestic market.

The Virgin team underestimated the impact that the Jetstar launch and its own boosting capacity would have on prices, load factors and yields. Whether or not the team would do things differently if it had a chance to revisit its decisions, however, is a moot point. To maximise its long-term market position, the airline had to hold its share of a market the Jetstar launch was destined to expand, which meant increasing capacity.

The metrics of last year were straightforward. Capacity increased 40 per cent against a 27 per cent increase in the number of passengers carried and a 30 per cent increase in revenue-passenger-kilometres. Load factors were down 4.9 per cent and yield down 5.6 per cent.

Allowing capacity to blow out ahead of demand in an environment where prices were, thanks to the Jetstar launch, diving, was always going to have an adverse impact on Virgin Blue. It tried to offset that impact by focusing even harder on its already market-leading cost base. Costs per available seat kilometre (ASK) were reduced from 8.16 ¢ to 7.49 ¢.

Where the airline was unlucky, or not sufficiently prudent, was that the soaring price of crude oil blew out fuel costs. Non-fuel costs fell from 7.44 ¢ per ASK in the first half of last year to 6.08 ¢ but those hard-won gains were offset by an increase in fuel costs per ASK from 1.28 ¢ to 1.63 ¢.

Virgin Blue's exposure to the crude oil price is unhedged, whereas Qantas was fully hedged until last December and retains partial hedging to dampen the impact of high oil prices. That blunts Virgin Blue's ability to exploit properly its status as the low-cost airline in the domestic market.

It has not helped that airport fees are also surging, with Virgin Blue chairman Chris Corrigan telling a transport conference in Canberra yesterday that airport charges had risen between 50 per cent and 200 per cent over the past three years and CEO Brett Godfrey saying the charges now account for about 15 per cent of the airline's operating cost base.

The other restriction on its ability to compete more aggressively without sacrificing its profitability is that Virgin Blue is a high-margin airline. In the year to March it maintained its margin of earnings before interest, tax, depreciation, amortisation and aircraft rentals at a still-healthy 25 per cent (30 per cent previously). It would want to protect those margins.

During Patrick Corporation's bid for Virgin Blue this year, Corrigan - Patrick's chief executive - made it clear he did not want to get caught up in a price war with Jetstar and that capacity growth would be constrained to protect yields and margins. Yesterday Godfrey spoke of a "period of consolidation" and a focus on product and costs rather than capacity.

The continued focus on costs is Godfrey's response, not just to the sector's competitive intensity, but the leveraged economics of airlines.

Whether Qantas' Geoff Dixon and Jetstar's Alan Joyce will allow Virgin the breathing space it is seeking is another issue. Joyce, coincidentally or otherwise, chose yesterday to announce the sale of a million seats at $29, including taxes and charges, to celebrate the anniversary of Jetstar's first flights on May 25 last year. If he does not want to lose share, Godfrey will have to respond.

Dixon and Joyce are not in the business of trying to destroy Virgin Blue. They want to keep it from gaining share and limit its ability to attack Qantas' core business and government franchise. Forcing it to match heavy discounts might help achieve those objectives.

In the longer term, it would suit Corrigan and Dixon - both of whom have long experience of operating within duopolistic markets - if the three airlines engaged in civilised competition without major market share shifts to destabilise the relationships and undermine the sector's profitability. The latest Jetstar offering is probably more tactical than strategic.

With no let-up in the sector's competitive intensity, the escalating impact of rising jet fuel prices and a slowing economy, the outlook for Virgin Blue is challenging. The years of easy gains post-Ansett and the simpler challenge of attacking the higher-cost, full-service Qantas are over. Dixon's launch of Jetstar, which locked Virgin Blue into the middle ground and gave the Qantas group the ability to match Virgin Blue in price-sensitive segments, changed the game.

For a more mature Virgin Blue, having grabbed a far larger share of the market than it anticipated, the future is now about grinding out and maximising the profits from its existing share and capacity and growing incrementally rather than, as once appeared possible, destroying Qantas' domestic franchise as value-based airlines have done to incumbents offshore.

Australia's Patrick H1 earnings rise 11 percent

SYDNEY, May 19 (Reuters) - Australian transport group Patrick Corp. Ltd. , which holds a majority stake in airline Virgin Blue Holdings Ltd. , said first-half net profit excluding one-off items rose 11 percent as its rail and port units offset lower earnings at the airline.

Patrick, which owns around 62 percent of the discount carrier that Richard Branson founded in 2000, said Virgin Blue contributed 28 percent less to earnings during the half.

"Virgin Blue faces a number of immediate challenges including excess capacity, higher jet fuel costs and rapidly rising airport charges. In the short run these are combining depress margins," Patrick said in a statement on Thursday.

Margin growth was also hindered at Patrick's ports business.

"This is likely to continue for the balance of the financial year but should progressively improve thereafter," Patrick said.

About half Patrick's earnings are from its ports, coastal shipping and stevedore operations, a quarter from its 50 percent stake in Pacific National and the remainder from Virgin Blue.

Patrick shares rose 2.5 percent to A$5.29 in early trade in an overall market up about 1 percent.

Patrick's net profit before one-off items was A$105.9 million ($80.2 million) in the six months to March 31.

After one-off items, net profit fell to A$99.87 million from A$121.06 million, Patrick said. Analyst forecasts in a Reuters survey averaged A$97.9 million.

Capital expenditure of A$127.7 million was up 94 percent in the half. High investment rates would continue for at least 18 months as Patrick invested in its port, rail and logistics business.

Virgin Blue, in which Branson's Virgin Group holds a 25.6 percent stake, said on Wednesday its annual net profit fell 13 percent, cut by increased competition and a 60 percent rise in fuel costs. Profit would be lower again this year, it said.

Virgin has snared about a third of the domestic market from its main competitor, Qantas, but Qantas has fought back by launching no-frills Jetstar.

Patrick's port unit competes with Britain's Peninsular & Oriental Steam Navigation Co. . The company has a 50 percent stake in Pacific National, Australia's largest privately-owned rail network, which transports mainly coal and grain. ($1=A$1.32)

Macquarie Airports: Sydney April Traffic Up 5.7%
19 May 2005

SYDNEY (Dow Jones)--Australia's Macquarie Airports (MAP.AU) said passenger traffic at all of its airports grew in April, except at Birmingham Airport in the U.K., where it fell by 1.2%.

In a statement to the Australian Stock Exchange, MAP Chief Executive Kerrie Mather said the result was pleasing as Easter fell in March this year rather than April as in last year.

Traffic at Sydney airport rose 5.7% from April last year. [ 19-05-05 2351GMT ]

Passenger traffic at Brussels airport rose 2.7%, and traffic rose 5.2% at Bristol, compared to a year earlier.

Overall, passenger traffic rose 5.9% at MAP's Rome airports, with Fiumicino traffic up 2.4% and Ciampino rising 46.7% compared with April 2004.

MAP said traffic in Rome was negatively impacted by temporary reductions in flights due to increased security for the funeral of Pope John Paul II and the inauguration of Pope Benedict XIV.

Business Times - 23 May 2005

Virgin Blue targets govt, business passengers

It will undercut bigger rival Qantas to help stem its declining earnings

(SYDNEY) Virgin Blue, Australia's second-biggest airline, is targeting a 30 per cent share of the nation's business and government passengers by undercutting bigger rival Qantas Ltd to help stem declining earnings.

'We've got 30 per cent of the overall market, we should be able to get something like 30 per cent of the business and government market,' Chris Corrigan, chief executive of Patrick Corp, which took control of the carrier in March, told Channel Nine's Business Sunday programme yesterday. 'I'd be disappointed if we can't do that.'

Virgin Blue, founded by UK billionaire Richard Branson in 2000, had a 20 per cent drop in half-year profits as fuel costs rose and competition jumped. The airline aims to boost its 'very small percentage' of more-profitable government and business passengers by offering cheaper seat prices, Mr Corrigan said. 'We're not aiming to get up to the price level of Qantas, we're aiming to be well under the price level of Qantas,' he said. 'If we can be 10 per cent under that's going to attract people to come to us.'

Virgin Blue shares fell 1.5 cent to A$1.68 at the market close in Sydney on Friday. Patrick's shares closed 15 cents higher at A$5.56.

Patrick, Australia's largest port-handler, lifted its stake in Virgin Blue to 62.4 per cent from 45.4 per cent after bidding A$1.90 a share for the rest of the carrier on Jan 28. Mr Branson's Virgin Group retains a 25.6 per cent stake.

Virgin Blue said on May 18 that net income declined to A$75.1 million (S$94.7 million) in the six months to March 31 after its fuel bill surged 65 per cent and competition from Qantas' one-year-old Jetstar unit drove down ticket prices.

Mr Corrigan, who has blamed rising airport fees for denting profits, said there were few extra cost efficiencies the company could bring in to bolster profits. 'I don't think there are any great cost downs that we can achieve,' he said.

Australian domestic airlines carried more than 38.7 million passengers in 2004, a 14 per cent increase from 2003, according to the government's Bureau of Transport and Regional Economies.

Since Virgin Blue began flying in 2000, the number of passengers carried by domestic airlines increased 29 per cent.

Qantas said on Feb 17 that net income in the six months ended Dec 31 rose 28 per cent to a record after cost cuts and a tax benefit.

OzJet Airlines Pty, owned by Minardi Formula One racing team boss Paul Stoddart, is also seeking to tap the market for business-class passengers in Australia.

OzJet, an all-business class airline to be based in Adelaide, South Australia state, is trying to obtain an air operator's licence from the Civil Aviation Safety Authority and will probably get approval for a September launch date, Mr Stoddart also told the programme.

OzJet was unlikely to receive a licence that soon because the airline's aircraft were 30 years old and it took Virgin Blue even longer to gain approval with new planes, Patrick's Mr Corrigan said.

'I saw the start of the last Grand Prix and two Minardi were stillborn on the starting line and it sort of was a little prophetic for me,' Mr Corrigan said. Mr Stoddart will 'find it very difficult indeed'. - Bloomberg

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Virgin circles for Qantas loyalty
Steve Creedy
25 May 2005
The Australian

RICHARD Branson's Virgin Atlantic has moved to take advantage of angst about today's Qantas frequent flyer changes by launching its own loyalty scheme in Australia with a double points offer.

In a bid to steal some of the local carrier's top-tier members, Virgin's "Flying Club" is also offering 500 gold Qantas or Cathay Pacific cardholders the ability to retain their status if they fly to Hong Kong or London.

The loyalty scheme comes as Atlantic last weekend launched a 2-for-1 fare offer to Hong Kong -- which prompted Qantas to respond with two-night packages from $679.

Atlantic's Australian sales and marketing manager, Gia Acitelli, confirmed yesterday that the offer was timed to take advantage of changes today to the Qantas frequent flyer scheme, which would require members to use more points to redeem tickets on many longer routes.

She said the loyalty scheme and the aggressive fare campaign were designed to raise brand awareness of its Sydney-Hong Kong-London flights and was not a response to low load factors.

"Load factors have been creeping up," she said.

"Virgin Blue has got such a strong brand in Australia and we basically need to do thing