SNeha-J-AeroSoft: http://australian-aviation-news.blogspot.com/

1. AVIATION/TOURISM: Qantas restructures, outlines Asia plan

A regional aviation analyst says the restructure announced by Australia’s national carrier, Qantas, could lead to the airline selling its shares in Air Pacific.
Qantas last month announced it was getting rid of about 1,000 jobs in Australia as part of a controversial revamp of its international arm.
The airline says the move is a bid to return its international operations to profit. It plans to launch two Asia-based airlines and buy 110 new Airbus planes.
While the Qantas announcement spoke of expanding in Asia, it made no mention of changing its services in the Pacific.
Qantas has a significant shareholding in Fiji’s national carrier Air Pacific and regional aviation analyst Jim Bradfield (a former chief executive of Solomon Airlines, Royal Tongan Airlines and Palau Micronesia Air) told Radio Australia’s Pacific Beat the changes made by the Australian airline could lead to it selling its investment.
“This may mean that they would be more keen to have that shareholding either purchased by the Fiji Government, or perhaps another player,” he said.
An article by the Centre of Asia Pacific Aviation on July 19 titled ‘Air Pacific ‘will not fail’ as restructuring continues; ownership questions remain’ quoted Dow Jones as saying Qantas wants the government of Fiji to pay F$70 million (US$40 million) to acquire out its stake in the carrier, although the Fiji government only appears to be willing to pay a fraction of this figure.
According to the report, the Fiji Government is wanting to pay Qantas around F$1 per share for the Air Pacific stake, compared with the price Qantas is asking of close to F$5.50 per share.
Concerns have also reportedly been raised about the codeshare element of the agreement. As part of its written proposal, Qantas said it would continue to codeshare on Air Pacific-operated services to Australia, New Zealand and the US (the carrier also has codeshare agreements in place with Alaska Airlines, Air New Zealand and Cathay Pacific and a FFP partnership with American Airlines).
Qantas also offered to step down from Air Pacific’s board and be “pleased to provide” two Qantas executives, Simon Hickey and Paul Edwards, as “advisers” to Air Pacific.
Qantas, according to the Dow Jones report which cited a copy of the proposal from Qantas to the Fijian government last year, had recommended the carrier either cancel new aircraft orders; sell and lease back aircraft; refinance a hangar; and sell the Sofitel Hotel on Fiji’s Denarau Island to fund the acquisition of the 46.3% of Air Pacific owned by Qantas. Fiji’s government is the largest shareholder in Air Pacific with a 51% stake.
While still the largest carrier in the market, Air Pacific has struggled to compete since the arrival in 2009 of Virgin Australia and Qantas LCC subsidiary, Jetstar, and has seen a 51% erosion of its market share.
“LCCs now hold an 18% capacity share of the Fiji market, although the figure is higher on international routes to/from Fiji. Air Pacific has also been affected by the global financial crisis, flooding in Fiji and losses on fuel hedging,” the CAPA article says.
Air Pacific CEO Dave Pflieger, who has held the position for the past 12 months, stated he would not let the airline fail and has introduced a downsizing and restructuring programme to improve the carrier’s competiveness.
In an interview with The Fiji Times on July 16, 2011, Pflieger stated his aims for Air Pacific include returning it to profitability, ensuring an enjoyable flying experience for customers and making the airline a good company for employees. The restructure, he said, was deemed necessary to sustain the longevity and sustainability of the airline and to ensure it can effectively compete on a global scale.
As part of restructuring programme, Air Pacific is implementing a three-pronged approach: having the right skills and expertise; improving the basics such as safety, OTP and customer service; and improving infrastructure, fleet, schedule, network and bringing costs under control. This also involves staff rationalisation and is necessary as Air Pacific is one of the largest foreign income earners in the country.
While various shareholders have come and gone over the years, Air Pacific is now owned by the Fiji Government (51%), Qantas (46.32%), with minor stakes held by Air New Zealand (1.94%) and the governments of Kiribati (0.27%), Tonga (0.27%), Nauru (0.08%) and Samoa (0.12%).

2. Airline unions keep up push for attack at Qantas AGM

ANGER over executive packages at Qantas has re-energised a union push to have a no-confidence vote put to the airline's annual meeting next month and could result in industrial action on the day of the event.

Workers have marshalled enough support to back a vote at the meeting but the move against the board, which was certain to be rolled by institutional investors, has already been rejected by Qantas.

It is understood that the board told unions a no-confidence motion had no effect under company law, regardless of shareholder support, and it had no obligation to place it at the meeting.

A Qantas spokesman confirmed yesterday that a no-confidence motion had no legal effect and was not "technically appropriate". "Therefore, the union's resolution will not be distributed to shareholders and no vote will be taken at the AGM," he said. "However, we have offered to distribute information from the pilots' union to Qantas shareholders in the lead-up to the AGM."

But news that chief executive Alan Joyce's reported package rose 71 per cent last financial year has sparked renewed anger among the airline's unions.

The airline's annual report revealed that Mr Joyce's vested compensation -- the amount he actually received -- fell 9 per cent to $3.04 million.

But the amount reported under financial accounting standards rose from $2.92m to $5m, pushed up largely by an increase in the value of shares awarded under short-and long-term incentive plans from $964,000 to $2.7m.

Some or all of the shares may be vested at a future date provided Mr Joyce can meet certain performance hurdles.

Union officials still stinging from the loss this week of the Jetconnect case before Fair Work Australia and angry about airline moves to establish Asian joint ventures and axe 1000 jobs say they are still looking at ways to have the vote of no confidence taken.

Australian and International Pilots Association vice-president Richard Woodward said there had been a huge amount of feedback and outrage about the remuneration. "Irrespective of the actual quantum, it's the message it sends and the message it sends this time is really bad just when he's trying to make 1000 people redundant, 180 of them supposedly pilots.
Mr Woodward he hoped that the no-confidence motion, put by the wife of a former Qantas pilot, would "go viral" to force the vote to be put at the meeting.

Australian Licensed Aircraft Engineers Association federal secretary Steve Purvina believed the legal requirements to raise a valid motion had been met.
100 shareholders needed to support a motion for it to be put and he had text messages from 400 shareholders that they had signed and submitted the paperwork.

"I fully expect the Qantas board to follow the (company) constitution and hear the motion," he said. "If they choose not to, they stand not only to isolate Qantas employees but they'll also isolate the shareholders."