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Old February 17th, 2005, 03:31 PM   #101
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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.
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Old February 19th, 2005, 06:36 PM   #102
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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;
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Old February 20th, 2005, 06:15 PM   #103
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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.
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Old February 20th, 2005, 06:18 PM   #104
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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.
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Old February 21st, 2005, 11:05 PM   #105
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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.
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Old February 21st, 2005, 11:06 PM   #106
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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.
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Old February 22nd, 2005, 06:37 PM   #107
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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.
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Old February 22nd, 2005, 06:38 PM   #108
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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.
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Old February 22nd, 2005, 06:39 PM   #109
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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.
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Old February 23rd, 2005, 05:34 PM   #110
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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
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Old February 24th, 2005, 07:51 PM   #111
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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.
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Old February 24th, 2005, 08:07 PM   #112
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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.
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Old February 24th, 2005, 08:09 PM   #113
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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.
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Old February 27th, 2005, 06:11 PM   #114
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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."
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Old February 28th, 2005, 05:56 AM   #115
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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.
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Old March 1st, 2005, 03:48 PM   #116
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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.
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Old March 2nd, 2005, 05:44 PM   #117
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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.
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Old March 4th, 2005, 10:12 AM   #118
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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.
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Old March 6th, 2005, 12:21 AM   #119
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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.
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Old March 6th, 2005, 06:41 PM   #120
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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".
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