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Old July 4th, 2005, 08:56 PM   #261
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Jetstar chases foreign flyers
Steve Creedy
5 July 2005
The Australian

JETSTAR has moved to further open up seat sales to international passengers as it seeks to grab a bigger slice of the inbound market.

The airline last week switched to a "free sale" codeshare arrangement that made more seats available to foreign wholesalers and travel agents, and opened up the scheme to international carriers beyond the Qantas Group, British Airways and American Airlines.

Jetstar believes the move will help it boost the proportion of overseas tourists on its flights beyond the current level of 10 per cent.

Codeshare seats had previously been available on a block basis through Qantas.

But once a block of codeshare seats sold out, it registered internationally that no more seats were available on that flight, even if there were still spare seats in other parts of the plane. The new system gives overseas passengers access to all spare inventory and has the added advantage of allowing wholesalers to book bigger groups on Jetstar.

"Having this ability for freesale will overcome a whole series of problems and allow that inventory to be completely available," said Jetstar chief executive Alan Joyce.

"And over the past week, we've been very impressed with what we've been selling.

"The amount of international sales has improved and we're still promoting this, so we think it can improve even further." Mr Joyce said the airline believed the new system -- developed jointly by Jetstar Amadeus, Qantas and Navitair -- would particularly benefit tourism in areas such as Tasmania, Queensland and Hamilton Island.

He said other proposed changes would make it easier for international tourists to book on the website using their own currencies. There was also an International Air Transport Association facility that would allow wholesalers to book directly with Jetstar using local rather than Australian bank accounts.

The Jetstar boss said the airline also moved yesterday to introduce its digEplayer entertainment units on all nine Airbus A320 aircraft.

"They're selling well and the uptake has been ahead of where we thought it would be," he said.

"That may be the newness of product, so we're going to keep it under close scrutiny over the next few weeks, but the uptake has been very good, particularly on long sectors." The airline is also due to start work on its new A320 maintenance base in Newcastle in the next few weeks.

The base was locked in after Jetstar maintenance engineers endorsed a new enterprise agreement by an 87 per cent majority.
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Old July 4th, 2005, 08:58 PM   #262
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Ozjet signs its pre-flight tech deals
Simon Hayes
5 July 2005
The Australian

START-UP airline OzJet has signed a $4 million deal with Macquarie Corporate Telecommunications to run the airline's voice, data, web environment and information technology hosting.

The Macquarie deal is the second big technology contract signed by the airline, which is backed by Minardi Formula One boss and British airline operator Paul Stoddart.

In April, OzJet signed an agreement with Sabre to install its reservations system.

The airline has been battling comments by competitors such as Patrick Corp boss Chris Corrigan that it will not be ready to get its air operator's certificate, and launch on schedule.

According to OzJet, all aspects of the launch, ranging from airworthiness checks to technology systems, are on schedule.

The airline has hired pilots and is interviewing for cabin staff.

It says its talks with the Civil Aviation Safety Authority over its air operator's certificate have been "productive" but it is refusing to speculate on when it will be issued.

Chief executive Hans van Pelt said the three-year agreement with Macquarie Corporate would help support the Sabre rollout, which began recently and was expected to be finished in September.

"With Sabre, the airline portion is being built, and one of my guys is in Dallas working with the Sabre team to get the airline portion set up for all the rules and specifications for selling an OzJet ticket," Mr van Pelt says.

"They are also sorting out all the communications, which obviously involves the Macquarie guys as well.

"The rollout will be finished at the end of August or in early September and will coincide with staff training on the system."

OzJet's Sabre system will link directly to travel agents' global distribution systems, giving the fledgling airline access to the coveted business travel market.

Mr van Pelt said OzJet would pay commission of about 5 per cent, compared with the more common industry rate of about 1 per cent.

Sabre's seamless access to the GDS networks was a key factor in the airline picking up the system.

It rejected Navitaire's Open Skies, a favourite of budget carriers, because it interfaced with the GDS in a limited way.

Amadeus was scratched early in the race because of its deal with Qantas, leaving Sabre or Galileo as the choice.
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Old July 5th, 2005, 06:53 PM   #263
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Australia's OzJet Needs Less Than 50% Loads To Break Even
1 July 2005

MELBOURNE (Dow Jones)--Australia's OzJet Airlines, owned by Minardi Formula One team boss Paul Stoddart, needs to carry less than 30 passengers per flight to break even, Chief Executive Hans van Pelt said Friday.

OzJet is aiming for an October take-off, flying a fleet of Boeing 737-200 and BAE 146 aircraft fitted with 60 business class seats.

Two years ago, after market leader and national carrier Qantas Airways Ltd. (QAN.AU) announced it would start up its own low-cost carrier, Stoddart and van Pelt shelved their original plan to start a discount airline and decided to launch an all-business class model. Qantas now holds about two-thirds of the domestic market, with the rest held by Virgin Blue Holdings Ltd. (VBA.AU).

OzJet is seeking a 4% to 6% market share on its limited route network between Adelaide, Canberra, Sydney and Melbourne. It will challenge Qantas' monopoly on the Sydney-Canberra route.

"We'll only ever look for single digit marketshare," van Pelt said. He said he may be able to get as much as a 10% share between Melbourne and Canberra but only about 2.5% between Sydney and Melbourne.

The airline will be capable of flying a higher proportion of empty seats on each flight than its competitors because it will own its aircraft outright, van Pelt said.

"We're targeting 60% load factors in our modeling, which is well under the industry average," van Pelt said on a conference call. "Our break-even load factor is well under that... at under 50%."

Latest passenger traffic figures from Qantas show the airline's load factor for its domestic operations was 80.4% in May. Virgin Blue filled 77.7% of seats for the year ended March 31.

Adelaide-based OzJet will have a capitalization of between US$33 million and US$35 million when it starts, he said.

OzJet has one refurbished flight-ready 737-200 in Australia now and will have another delivered next month. By this time next year, van Pelt said the airline's fleet will have 10 planes.

OzJet will pay a base commission to travel agents of "around 5%", higher than Qantas' rate of 1% for domestic bookings.

Passengers will be able to book OzJet tickets through the Sabre reservation system, used by most international and local travel agents including the federal government's travel agent, Qantas Holidays.
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Old July 6th, 2005, 04:32 PM   #264
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Australia's Virgin Blue To Cut 2 Unprofitable Routes
01 July 2005

MELBOURNE (Dow Jones)--Australia's Virgin Blue Holdings Ltd. (VBA.AU) said Friday it plans to cut two unprofitable routes to destinations in the Northern Territory.

Virgin Blue Chief Commercial Officer Stefan Pichler said from Sept. 4 the airline will no longer offer direct flights between Adelaide and Alice Springs and between Sydney and Darwin.

"We have been monitoring unsatisfactory loads for some time and demand for these flights has been below our initial expectations," Pichler said in a statement.

Virgin Blue's management has been focussing on improving margins since Patrick Corp. (PRK.AU) gained control of the airline in March after a hostile takeover.
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Old July 7th, 2005, 01:31 AM   #265
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Qantas defends higher air fares on its passage to Africa
4 July 2005
The Age

QANTAS has defended its practice of charging up to double for an air fare to South Africa compared with other airlines flying indirect services on the route.

In response to concerns that its two-year-old code-share agreement with South African Airways has led to a lack of competition, Qantas says that because many customers prefer the convenience of a direct service, "indirect operators have to undercut direct carriers' fares to draw traffic on their services".

The International Air Services Commission will renew the code-share agreement on Monday, even though it has raised concerns about "growing evidence of the impact of a lack of competition" between the two carriers.

Qantas and SAA are the only airlines flying direct services from Australia to South Africa.

After highlighting the "continuing high fares and increasingly high load factors" enjoyed by Qantas on services from Sydney to Johannesburg, the commission will only renew the agreement on the condition the two airlines add an extra weekly flight to the current nine services from December 18.

In April, the Australian Competition and Consumer Commission said there was "a suggestion" Qantas and SAA set their fares higher by "a margin adjudged to represent the convenience cost of non-stop travel".

The travel.com.au website yesterday quoted a Qantas return economy fare from Sydney to Johannesburg on September 1 at $2244.40 (before taxes and surcharges), a SAA fare was quoted at $2135.40.

Singapore Airlines and Cathay Pacific quoted fares of $1729.40 and $1761.40 respectively. A Qantas business class fare for travel on the same day was $9472.40 compared with Cathay's $5002.40.

But in response to the decision to extend the code-share agreement only for as long as the airline maintains an extra weekly flight, Qantas said: "We reject the simple conclusion that fares should be lowered because efficiency gains have been made on the services, as this ignores the significantly better product offering that these gains (from the code share) have delivered."

Under the code-share agreement, SAA passengers can book tickets on Qantas flights from Sydney to Johannesburg, while Qantas passengers can fly on SAA services from Perth.

In a letter to the International Air Services Commission, Qantas head of government relations David Hawes argued that the fares charged by the indirect operators partly reflected the ability of those airlines to offer cheaper fares to fill empty seats.

Singapore Airlines says it has little excess capacity on its services to South Africa. Qantas justifies its higher business class fares to South Africa by citing the cost of installing its new SkyBeds. It says the beds take up 27 per cent more space.
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Old July 8th, 2005, 06:06 AM   #266
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Qantas capacity slashed by 10pc
Steve Creedy
7 July 2005
The Australian

QANTAS domestic operations slashed capacity by 10 per cent in May and carried 185,000 fewer passengers than a year ago as the airline's strategy to use lower-cost operations on marginal routes continued to bite.

Figures released by the airline yesterday showed the number of passengers on Qantas mainline domestic flights fell 12.6 per cent in May to 1.28 million as traffic dropped 9 per cent.

Mainline domestic passenger numbers for the year to May were 9.2 per cent down on the previous year while traffic fell 5.4 per cent and capacity -- the number of available seats -- dropped 5.7 per cent.

Domestic yields to May were down 2.8 per cent.

In contrast to the mainline falls there was a 7 per cent jump in May Qantaslink passenger numbers compared with a year ago and a 5.2 per cent rise traffic.

A small fall in capacity meant Qantaslink planes flew with 70.9 per cent of their seats full, compared with 67.3 per cent the previous May.

Jetstar also fared well to carry 380,000 passengers in the month with load factors for May stable at 68.9 per cent despite a year of continuous growth.

Between them, Jetstar and Qantaslink accounted for a third of the group's domestic passengers in May and helped push up overall domestic passenger numbers by 8.8 per cent as traffic rose 8 per cent and capacity increased 7.7 per cent.

The changes produced a marginal increase in the percentage of domestic seats filled to 74.3 per cent.

The good news on international operations was a rise in yields for the year to May of 4.4 per cent.

A rise in traffic for the month of 1.8 per cent combined with a small decrease in capacity to push up the seat factor by 1.7 points to 69.5 per cent.

The figures emerged as Qantaslink started flying 115-seat Boeing 717s in Western Australia as part of a plan to gradually replace its smaller BAe146s.

Qantaslink will eventually fly eight of the twin-engined 717 jets on routes in Western Australia, Queensland and the Northern Territory.

Qantas also said yesterday that former Australian Defence Force chief Peter Cosgrove had been appointed a non-executive director. General Cosgrove was chief of the ADF from July 2002 until his retirement this month.
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Old July 8th, 2005, 08:09 AM   #267
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Australia's Qantas Plans No Increase In Fuel Surcharge
7 July 2005
The Wall Street Journal

LONDON -- Qantas Airways said it has no immediate plans to increase its passenger fuel surcharge despite rising oil prices.

Geoff Dixon, chief executive of Australia's largest airline, made the announcement after an industry luncheon here. He said any surcharge increase could "possibly do more harm than good" to the airline's domestic operations.

Mr. Dixon declined to comment on the company's results for the 12 months ended June 30, which are due next month, repeating the company's official line that "they're in line with what the market expects."

Once again calling for industry consolidation, Mr. Dixon said governments are harming the industry by providing financial support to troubled airlines. "Governments, basically, should get as far away from airlines as they possibly can."

Qantas has been recently linked to rival Singapore Airlines in a possible merger, which Mr. Dixon labeled as "hypothetical."

Late last month, Qantas confirmed that its Singapore-based budget offshoot, Jetstar Asia Ltd., was in preliminary merger talks with rival Valuair Ltd. Mr. Dixon said it was "still too early" in the process to comment, but confirmed that Valuair initiated the talks.

But he said "consolidation is very hard to achieve," noting Qantas' failed bid to buy a controlling stake in Air New Zealand Ltd. three years ago, due primarily to regulatory opposition.
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Old July 10th, 2005, 01:54 AM   #268
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Adelaide : At last, an airport to make us proud
9 July 2005
The Advertiser

The bold use of glass in Adelaide's most anticipated new building - and its aerobridges - is an architectural masterstroke, says JOANNE CYS.

TO arrive by air at Adelaide Airport's domestic terminal is to set foot on the tarmac, rain or shine, and breathe the av-gas. Some of us enjoyed the contact with the open air. Others have long bemoaned the lack of aerobridges - it was as if Adelaide couldn't be taken seriously as a city unless it had them.

In October, 14 glass-sided aerobridges will be unveiled as part of the new airport building. No other city in Australia has them. Their inclusion was one of the most significant design decisions made by the project architects, Hassell's Adelaide office. They will allow travellers a last outside view before boarding and provide a welcome vista for arriving passengers emerging from the confined cabin. They will also give voyeurs in the departure lounges even more to watch.

Transparency is the dominant quality of not just the aerobridges but the entire building. Long, lean and filled with light, the terminal is designed to expose the hustle and bustle of arrivals, departures and all the attendant activity of a busy airport.

By revealing the activity that occurs both inside and outside, the architecture clearly expresses the terminal's function. With the capacity to process thousands of passengers an hour at peak times, the action is indeed something worth revealing. Once fully operational, the new terminal will accommodate all international and domestic air traffic, as well as a 27-shop retail mall.

The building's location and form are the direct result of its site and proximity to existing runways. Unlike many other international terminals in Australia and around the world, the new Adelaide Airport building is not at some distant site far from the city.

From the upper level of the 750m-long, two-storey terminal, the closeness of the Adelaide Hills and the city is breathtaking. Full-height glass walls frame Adelaide's unique topography and emphasise the slim strip of coastal plain that lies between the gulf waters and the Hills. You feel you could reach out and grab the small cluster of multistorey buildings that is the CBD.

From inside the terminal, the visibility of Adelaide as a destination (and point of departure) is ever present and will create a powerful impression on travellers as they pass through this new gateway to and from our region.

The qualities of transparency and clarity are also expressed through the design of the terminal's vast interior spaces, particularly the 42-desk check-in hall and 16-gate departure concourse. Hassell's design for the airport acknowledges that air travel is now an everyday activity for many, by restoring some of the sense of excitement and occasion travel once had. The designers aspired to create a terminal that referred to the grand arrival and departure halls of various forms of air and land travel around the world.

The transparency of the new building reflects the qualities of terminals by Foster and Partners at London's Stansted Airport and Chek Lap Kok in Hong Kong, as well as Japan's Kansai Airport by Renzo Piano Building Workshop. The double-height glass, generous spaces and clear expanses are in marked contrast to our existing domestic and international terminals.

The design also assists the more pragmatic functions of the terminal and, in this respect, the new building again joins recognised international examples. Renzo Piano's design for the Kansai Airport demonstrates Piano's belief that "the structure of an air terminal should be the diagram of people moving through it".

Although less than half Kansai's length, the new Adelaide terminal is also characterised by a continuous departure concourse. The linear design allows views through the terminal from drop-off to take-off, thus providing an instinctive destination for people moving through. From the check-in hall, you can look directly through the terminal centre to the departure-lounge windows on the opposite side of the building. The clarity of this perspective will help travellers to find their way to the departure concourse and aims to encourage effective movement through the security X-ray stations between check-in hall and retail mall.

With its clean, transparent envelope, great control has been exercised in the terminal's interior design. A rich, natural palette of materials has been expertly manipulated by Hassell's design team to define spaces and circulation routes.

Reconstituted marble tile has been used as one of the main flooring materials, from fine to large aggregate, to define various floor areas. Similarly, carpeted areas within the terminal are defined by a change in depth of colour, ranging from a rich chocolate in the international departure lounges to mid-tone in the domestic departure lounges.

At all lounges, a lighter tone helps to distinguish the queuing and service space from the seating areas. The terminal seating, designed by South Australian furniture designer Simon Zappia, will also add richness as the depth of the upholstery leather colour varies across the seats.

In the departure concourse, lounges are marked by floor-mounted screens along the concourse and by a solid infill in the otherwise completely glazed external wall at the departure gate.

Retail outlets, including SA brands Cibo Espresso and Coopers General Store and Alehouse, have a clean backdrop on which to make their mark. Recognising that travellers are inclined to lose track of time when surrounded by the allure of things to buy, the designers have created clearly visible blackwood ceiling bulkheads that punch through the surrounding, and much paler, sassafras-lined bulkheads to indicate the way out of the mall and into the departure area.

Throughout the terminal, care has been taken to minimise suspended signage and information screens. As with Oslo's elegant Gardermoen Airport terminal designed by Aviaplan AS, the new Adelaide terminal will be one of the few that does not allow branding or advertising on terminal signage.

Hassell has filled the brief for a contemporary terminal with a design that is arguably of international standard, yet its unique characteristic is its unashamed acknowledgment of its surrounding regional context.

* Joanne Cys is senior lecturer in interior architecture at the University of South Australia and immediate past SA president of the Design Institute of Australia.
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Old July 10th, 2005, 06:45 PM   #269
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O'Leary's cost cutting ways helped Jetstar off the ground
RICHARD WEBB
10 July 2005
Sunday Age

THE Ryanair revolution has indirectly changed the face of flying in Australia. Big chunks of the Irish-based airline's business model were used as the basis for Qantas' successful budget airline start-up Jetstar, according to Jetstar's chief executive Alan Joyce.

Qantas employed two senior Ryanair executives as advisers during the airline's development.

Mr Joyce says Jetstar mimicked the brutal efficiency of the Ryanair operation with concepts such as the 25-minute plane turnaround to get the maximum use out of their aircraft and reduce the cost of flight crew stopover expenses. This is five minutes or so faster on average than Virgin Blue and 10 minutes better than its parent.

It also took on Ryanair's approach to inflight entertainment and aspects of the way the European airline markets itself.

"Jetstar sought to adopt the efficiency of Ryanair," Mr Joyce said. "Ryanair has also achieved notable success with their direct ticket sales via the internet."

Mr Joyce should know. Before coming to Australia, he learnt the ropes in direct competition with Ryanair, playing a key role in devising Aer Lingus' low-cost strategy.

One of the biggest savings Jetstar made on standard air travel in Australia was by not offering baggage connectivity. That means that if you have a connecting flight, you have to collect your baggage at the end of the Jetstar run and recheck it in for your next flight.

"The infamous Irish boss of Ryanair, Michael O'Leary, has proclaimed he would rather catch a social disease than introduce connectivity on his airline," Mr Joyce told the National Aviation Press Club recently.

"Whilst I don't feel that level of passion about this issue, non-connectivity is core to our low-cost culture at Jetstar."

Another concept brought over was the controversial one of free seating - that is, unallocated seats.

"Despite free seating being an entrenched feature of some of the world's most profitable carriers outside of Qantas - such as Southwest, Ryanair and most recently AirAsia - the net benefits to Jetstar and our customer base have far outweighed the negative PR the procedure originally produced," Mr Joyce said. "Our free seating process saves Jetstar around five minutes on each aircraft turn, helps return a flight crew to its home operating base by shift's end . . . and overall allows for tighter scheduling across our network."

Gerry Turner, one of the Ryanair senior employees that helped get the airline up and running, remains as head of customer service. But this was one area Jetstar avoided copying from the Irish-based operation.

"Ryanair is notorious for its level of customer service - or lack of it," Jetstar spokesman Simon Westaway said. "We sought not to go down that path. We are very aware of our customers and their needs and you just wouldn't get away with what Ryanair does in Australia."

ABN AMRO aviation analyst Anthony Srom says the launch of Jetstar has been a success for Qantas and for consumers. Australians are flying something like 10 per cent more than they were before the airline was launched, which is partly why it hasn't damaged its parent's business - Jetstar has expanded the airline market, rather than take business away from Virgin and Qantas.

Of the 450,000 people that used the Avalon airport in its first year of operation, four in 10 visited the Great Ocean Road, while traffic rose 8 per cent on the key Sydney-Melbourne run to 6.3 million passengers a year.
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Old July 11th, 2005, 06:37 PM   #270
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Australia's Qantas To Offer Seasonal Svcs To South Korea
11 July 2005

MELBOURNE (Dow Jones)--Australia's Qantas Airways Ltd. (QAN.AU) said Monday it will take advantage of Australia's increasing popularity as a holiday destination for South Koreans by operating seasonal services between the two countries from late December to early February.

Qantas will fly 18 return services between Brisbane and Seoul using Boeing 767-300 aircraft, Executive General Manager John Borghetti said.

"The number of (South) Korean visitors traveling to Australia has increased by 10% in the last 12 months and by 24% in the past five months," Borghetti said.

Qantas hasn't flown to Seoul since 1998 but has had a code-share arrangement with Asiana Airlines Inc. (020560.KQ) that provides daily services from Sydney to Seoul.

Last year more than 211,000 South Koreans visited Australia and spent about A$554 million during their stay, Australia's Tourism Minister Fran Bailey said in a statement issued on the first day of her official visit to South Korea.

The Queensland state government last week announced Korean Air Co. (003490.SE) will offer seven charter flights between Seoul and Cairns between July 27 and Aug. 18, South Korea's summer vacation period.

Queensland Tourism Minister Margaret Keech said the midyear charter flights were expected to match the success of similar services between December 2004 and Feb. 2005.

"The first seven charters brought 1,837 visitors to Cairns and pumped an estimated A$2.9 million into the regional economy," Keech said in a statement.
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Old July 14th, 2005, 06:37 PM   #271
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Ski air route year round
13 July 2005
Daily Telegraph

QANTAS' popular holiday service to Queenstown is to become a year-round operation.

The airline currently flies to Queenstown from Sydney and Brisbane only during the ski season.

From October 1, the route will be added to its permanent network.

The start of the weekly Queenstown service, operating from Sydney on Saturdays, will coincide with the end of the region's ski season.

"The decision to extend the Sydney-Queenstown service to a permanent operation reflects the growing attraction of Queenstown as a year-round holiday destination for Australians," Qantas executive general manager, John Borghetti, said.
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Old July 15th, 2005, 01:03 AM   #272
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INTERVIEW-Minister says Australians want to keep Qantas
By James Grubel

CANBERRA, July 13 (Reuters) - Australia will consider easing foreign ownership limits on Qantas Airways Ltd. as it looks at revamping national aviation policy, but wants the "Australian icon" to stay down under.

Australian Transport Minister Warren Truss said foreign ownership limits on Qantas, the country's largest airline, were part of the government's review of aviation and should be completed in three or four months.

"Qantas has a special place in the heart of Australians. I think all Australians have an attachment to Qantas and would want to see it remain as Australian," Truss told Reuters in an interview.

However, the review will also examine efforts by rival Singapore Airlines Ltd. , the world's second-biggest airline by market value, to fly the lucrative Sydney to Los Angeles air route.

"The trans-Pacific route is on the agenda, and some kind of response on that issue is possible by the end of the year," Truss said.

"The possibility of other airlines operating on the trans-Pacific route has not been ruled out."

Under laws enacted in 1992, overall foreign ownership of Qantas is limited to 49 percent.

Single foreign investors are restricted to no more than 25 percent, while foreign airlines are limited to a maximum 35 percent of Qantas.

If the ownership limits in the Qantas Sale Act are scrapped, the government's Foreign Investment Review Board will still have to examine any majority foreign ownership, giving the government the power to veto any foreign takeover.

Qantas, founded in the Australian outback in 1920, was originally registered as the Queensland and Northern Territory Aerial Services Ltd.

Truss, Australia's former Agriculture Minister, was appointed Transport Minister a week ago by Prime Minister John Howard.

His predecessor, John Anderson, told his Singapore counterpart Yeo Cheow Tong in June that Australia was not yet ready to open up access to the Australia-United States route.

Qantas and bankrupt U.S. carrier United Airlines, part of UAL Corp. , are the only airlines offering direct flights from Australia to the U.S. mainland. Discount carrier Virgin Blue also wants access to the United States.

Truss said while he supported the idea of opening the skies to competitors, the government had to balance its policy against what it sees as distorted international aviation markets and unfair government support for some airlines.

"We do have to recognise the world aviation market is anything but pure and free and fair," he said.

Howard has publicly questioned whether Qantas and Singapore Airlines might some day merge.

For its part, Qantas supports an end to foreign ownership limits.

Qantas chief executive Geoff Dixon has said he believes Qantas would have to consider an "association" with another airline in five to 10 years. ($1=A$1.32)
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Old July 18th, 2005, 03:45 AM   #273
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Virgin Blue adds Samoa to list
Jamie Freed
15 July 2005
The Sydney Morning Herald

Airline's new offshoot to start flying in October

Virgin Blue has extended its Pacific reach and will begin flights to Samoa through a new offshoot - Polynesian Blue - after finalising a deal with the island nation's government yesterday.

Virgin Blue will have 49 per cent ownership of a new company which, starting in October, will operate routes now flown by Polynesian Airlines' lone Boeing 737-800 jet.

It may also dedicate up to three more planes from its Pacific Blue fleet to Polynesian Blue but Polynesian Air will continue to operate turboprop flights.

The government-owned airline, which was managed and partly financed by Ansett from 1982 to 1992, has a chequered past. The Samoan government sought a partner after the insolvent airline lost about $35 million between 2001 and 2003.

Virgin Blue beat rival partnership offers from Air New Zealand and Qantas last December. Polynesian Air has had a code-share arrangement with Qantas that will presumably end once Polynesian Blue begins operations.

Flights on the new partner airline were originally expected to begin in March but Virgin Blue spokeswoman Heather Jeffery said the delay was not "untoward".

"Simply, it's a brand new project to form a joint venture carrier with a government and a private sector partner," she said.

The Samoan government insisted on the Polynesian Blue name rather than extending the Pacific Blue brand, so the aircraft will feature newly designed livery.

Flights from Australia to Apia in Samoa will connect in Auckland or Christchurch before making the four-hour flight from New Zealand to Samoa.

Virgin Blue will soon decide whether to keep Polynesian Air's Apia-Honolulu route, which would represent the Brisbane-based airline's first foray into the US market, albeit a small one.

Virgin Blue has scrapped plans to form a low-cost carrier in Macau and recently focused on the possibility of trans-Pacific flights from Sydney to Los Angeles.

Ms Jeffery said the airline would also consider further South Pacific expansion but 90 per cent of revenue came from the Australian domestic market, which remained the main focus.

Meanwhile, United Airlines said it would add three flights a week from Sydney to Los Angeles between December and next April, in addition to its current daily services.

The move comes one month after Singapore Airlines was blocked from the trans-Pacific route, leaving United and Qantas as the only airlines flying direct from Sydney to Los Angeles.

Although United remains under bankruptcy protection, it has beefed up services to Asia in recent months.

Virgin Blue shares closed up 0.5c at $1.68 but analysts maintain a bearish outlook as the airline has no fuel hedging in place.
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Old July 18th, 2005, 04:52 PM   #274
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Smith Barney cuts Virgin Blue earnings forecasts

SYDNEY, July 15 (Reuters) - Citigroup Smith Barney has cut its fiscal 2005 and 2006 profit forecasts on Virgin Blue Holdings Ltd. by 12.6 percent and 20.7 percent, respectively, and lowered its 12-month share price target to A$1.38 from A$1.43. "We believe VBA's share price could remain under pressure as fuel costs continue to increase, yields remain under pressure and the company undergoes a strategic review post Patrick Corp taking control," Smith Barney analyst Jason Smith, who kept his "sell" rating on the budget airline, said in a report.

Patrick owns about 62 percent of Virgin Blue. Richard Branson's Virgin Group [VA.UL] owns 25.6 percent.

Virgin Blue shares ended Thursday at A$1.68.
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Old July 20th, 2005, 01:25 AM   #275
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Non-stop to London a reality
Alexandra Smith
18 July 2005
The Sydney Morning Herald

Forget spending hours in Qantas's transit lounges. At last, non-stop flights between Sydney and London could be reality - but only if Boeing can persuade the national carrier to buy its newest plane.

Boeing's latest aircraft, the 777-200 long range, flies in to Sydney today, and the aircraft manufacturer has a clear agenda. It must sell this jet to Qantas or risk surrendering to its nemesis, Airbus.

Qantas is one of three leading international airlines (the others are Emirates and Singapore) to order 12 of the new super jets, the double-decker 500-seat Airbus A380. The plane will revolutionise air travel.

The A380, the biggest advance in commercial air travel since Boeing's 747 about 30 years ago, was due to enter service early next year, but it has been delayed by at least six months.

But despite its commercial appeal, the A380 will not provide Qantas with what it calls the "holy grail" of air travel: non-stop flights between Sydney and London, or between Sydney and New York.

The A380 may allow Qantas to increase the number of passengers it carries into congested airports such as Heathrow, but the Boeing jet would avoid stops in hubs such as Singapore or Bangkok.

The 777-200LR was first slated as a London to Sydney direct option, with the reverse route unlikely because of tail winds. But it is understood that Boeing is close to improving its new jet's range.

A spokeswoman for Qantas, Jodie Taylor, said that the airline was looking at Boeing's long-haul options as it would with all new aircraft. But it is understood that Qantas is looking at the 777-200LR with renewed interest.

Pakistan International Airlines was the first airline to order the jet, followed by Eva Air.

The new Boeing aircraft will arrive from Singapore this morning, but it is expected to completed its first record-breaking 24-hour flight in September.
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Old July 20th, 2005, 08:42 PM   #276
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Virgin Blue Holding Back Australia's Patrick: Broker

MELBOURNE, July 20 Asia Pulse - Budget airline Virgin Blue (ASX:VBA) has become a noose around the neck of majority stakeholder Patrick Corp Ltd (ASX:PRK), according to broker Citigroup Smith Barney.

Citigroup analyst Jason Smith said the logistics and ports operator would have a brighter future without its 62.4 per cent controlling stake in Virgin Blue.

"Virgin Blue continues to be a noose around Patrick's neck, with fuel prices remaining high, with (Qantas low cost rival) Jetstar adding 30 per cent capacity in the next year and with Virgin Blue's muddled attempt at trying to be something to everyone," Mr Smith said in a client note.

Virgin Blue was also trying to cope with management change, a rising cost base, successful segmentation of the market by Qantas, Jetstar's strong growth and recent disappointing operating statistics.

"The unfortunate thing is that without its 62.4 per cent holding in Virgin Blue, we believe that Patrick would be the stand-out stock in the sector on a two- to three-year view," Mr Smith said.

Patrick's future earnings were expected to gain from the expansion of its Fisherman's Island and Port Botany ports, the introduction of auto straddle technology in Brisbane and the removal of a container movement levy in mid-2006.

The outlook for Pacific National - Patrick's joint-venture rail operations with Toll Holdings Ltd - was also very robust as governments spend more on improving rail infrastructure, the expansion of Pacific National into Queensland and the return to normal grain harvests following good rains in June.

But following Virgin Blue's recent operating statistics Citigroup has cut its estimated reported net profit for Patrick Corp by 5.5 per cent to $210.4 million for the 2005 full year and by nine per cent to $248.8 million for 2006.

It warned that further downside risk was possible given Jetstar's rapid expansion, with fuel costs unhedged and with Virgin Blue's decision to expand internationally.

Patrick shares fell two cents to $5.51 while Virgin Blue was steady at $1.655.
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Old July 20th, 2005, 08:43 PM   #277
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Sydney Airport Sees Earnings Rise 14% in 2004/05

SYDNEY, July 20 Asia Pulse - Sydney Airport's earnings grew 14 per cent in 2004/05 thanks to higher passenger numbers and a revenue boost from its property and shopping interests.

But increased security requirements pushed up its operating expenses for the year.

Sydney Airport manager Southern Cross Airports Corporation Holdings (SCACH) today reported a 14 per cent increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to A$495.2 million (US$372 million) for 2004/05, excluding non-recurring expenses.

Sydney Airport Corporation Ltd executive chairman Max Moore-Wilton said the result was boosted by a 12.9 per cent increase in revenue to $619.2 million.

"Sydney Airport has delivered another strong financial year performance thanks to ongoing passenger growth and a diversified revenue base," he said.

"Passenger growth continued to underpin a solid performance from retail, property and other commercial activities."

But increased security requirements pushed up the airport's operating expenses by 8.7 per cent to $124 million for the year to June 30, excluding one-off specific expenses.

A significant enhancement of security is underway with $90 million committed to implement 100 per cent checked baggage screening by December 2005 at the international terminal, and followed at a later date at the T2 terminal, Sydney Airport said.

Increased passenger screening, greater curbside management and enhanced security services are also in the pipeline.

In addition, Sydney Airport is participating in the federal government's recently announced measures to strengthen security and crime management at major Australian airports.

Sydney Airport will also spend more than $100 million to prepare itself for the arrival of the Airbus A380, taking the total capital expenditure spent since privatisation to $465 million.

Kerrie Mather, chief executive of Sydney Airport's major shareholder Macquarie Airports (MAp) said the investments, coupled with ongoing management of operational expenses, provided a solid platform to support the airport's future financial performance.

"Sydney Airport has achieved its third consecutive year of double-digit earnings growth since privatisation and is well positioned for the future following a year of significant investment and business development," she said.

MAp, whose 55.5 per cent ownership of Sydney Airport makes up the majority of its $6 billion portfolio, said the airport's aeronautical revenue growth was up 7.1 per cent, in line with traffic growth.

Sydney Airport's passenger numbers totalled 28.289 million for the financial year, MAp said.

Commercial trading revenue increased 9.8 per cent, with the property business up 15 per cent over the financial year.

Duty Free shoppers and a redevelopment of the airport's terminal one food court helped boost retail revenue by 13.3 per cent.

Qantas is expecting 12 of the Airbus A380 double decker new generation super jumbos from Airbus to be delivered in April 2007.
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Old July 22nd, 2005, 04:53 AM   #278
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Airport seeks security cash
NEIL McMAHON
22 July 2005
The Age

AUSTRALIAN airports need more federal money to pay for anti-terrorism measures and should be policed by a new agency dedicated to aviation security, Sydney Airport management said yesterday.

In a written submission to a parliamentary inquiry into aviation security held in Sydney, airport chief executive Max Moore-Wilton called for a national aviation crime management program, saying there was "confusion between the responsibilities of state and national bodies, a lack of co-ordination at operational levels and underutilised resources."

The Transport Workers Union presented a submission backing the airport's call for a single agency to co-ordinate aviation security.

The Sydney Airport Corporation also called for tighter controls on the issuing of airport identity security cards, saying the current test for a "fit and proper person" needed to be revised.

The airport's corporate affairs manager, Rod Gilmour, told the inquiry that four employees had been stripped of their cards out of 9500 staff members rechecked in the past month.

The TWU repeated its long-standing call for full background checks to be carried out on anyone working in Australian airports.

Sydney Airport has been at the centre of controversy over alleged drug trafficking involving baggage handlers since March, with the smashing of a cocaine ring and claims by convicted smuggler Schapelle Corby that marijuana was planted in her luggage when she left for Bali.

The longest section of the airport's submission dealt with the cost of upgrading security. This "continues to escalate and burden the (aviation) industry", which was forced to pass on the costs to passengers, it said.
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Old July 23rd, 2005, 04:51 AM   #279
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Sydney Airport says its earnings are up 14 percent for year ending June 30
20 July 2005

SYDNEY, Australia (AP) - Australia's Southern Cross Airports Corp., which operates Sydney Airport, said Wednesday its earnings rose 14 percent for the year ending June 30, driven by higher passenger numbers and hinger sales from its property and shopping businesses.

Earnings before interest, tax, depreciation and amortization hit 495.2 million Australian dollars (US$372 million) for the fiscal year ending June 30, up from A$434.4 million (US$326.7 million) in the previous year.

Max Moore-Wilton, the executive chairman of Sydney Airport Corp. Ltd. said the result was boosted by a 12.9 percent increase in revenue to A$619.2 million (US$465.6 million).

"Sydney Airport has delivered another strong financial year performance thanks to ongoing passenger growth and a diversified revenue base," he said. "Passenger growth continued to underpin a solid performance from retail, property and other commercial activities."

However, increased security requirements pushed up the airport's operating expenses by 8.7 percent to A$124 million (US$93 million) for the year.
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Old July 24th, 2005, 08:17 AM   #280
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Security on tarmac costs too much
Neil McMahon
22 July 2005
The Sydney Morning Herald

Australian airports need more federal money to fund anti-terrorism measures and should be policed by a new agency dedicated to aviation security, Sydney Airport management says.

The airport's chief executive, Max Moore-Wilton, has also called for tighter controls on the issuing of security cards, the identity documents at the centre of controversies over security near airport tarmacs.

In a submission to a parliamentary inquiry into aviation security, which sat in Sydney yesterday, Sydney Airports Corporation calls for the creation of a single agency to manage airport policing.

The document, signed by Mr Moore-Wilton, says there is "confusion between the responsibilities of state and national bodies, a lack of co-ordination at operational levels and underutilised resources such as Australian Protective Service".

"Without an effective crime prevention unit operating with the necessary resources and powers of state and federal law enforcement agencies ... passengers, staff, members of the public and other users will translate the alleged weakness in preventing criminal activity to an overall lack of aviation security," the submission says.

It also calls for the introduction of a National Aviation Crime Management Program. This would address "recently highlighted crime management issues", which the submission does not identify.

Since March, Sydney Airport has been at the centre of controversy over alleged drug trafficking involving baggage handlers, including the smashing of a cocaine ring and claims by convicted smuggler Schapelle Corby that marijuana was put in her luggage.

The submission backs recent changes to provision of the aviation security identity card, but says the test of a "fit and proper person" should be looked at again and responsibility for applications and approvals given to a central department.

The airport's corporate affair's manager, Rod Gilmour, told the committee four employees out of 9500 staff members rechecked in the past month had been stripped of their cards for failing the existing "fit and proper person" test.

The longest section of the submission deals with the cost of upgrading security, which "continues to escalate and burden the [aviation] industry", forcing it to pass on the costs to passengers.

"The notion that the passenger should pay extra for such protection, normally provided as part of government arrangements, is a major policy issue" for governments and the industry, it says.

Sydney Airport expected to cover significant security costs as part of normal expenses, but a better balance was needed. "The aviation industry seems to require counter measures far in excess of other infrastructure providers or transport operators."

Attacks such as the September 11 strikes demanded a national response and this extended to supporting the aviation industry. "If there is a risk to the national economy from aviation, then the cost of counter-measures justifies a government-driven and funded approach far greater than is currently in place."

GIVE MAX MORE

Sydney Airport boss Max Moore-Wilton wants:

* More federal money to cover the cost of upgrading security, which he says is an unfair burden on the industry.

* A national body to police airports to end confusion and overlap between state and federal agencies.

* Tighter controls over how aviation industry security cards are issued.
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