Wednesday 14 September 2011

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1.  Qantas to Target China Travelers With Five Separate Airlines


Qantas Airways Ltd., seeking to revive unprofitable international operations, is counting on five different airline units to win travelers in China, a country 60 times bigger than its home market.


The Australian company is forming a premium carrier in Southeast Asia and a budget venture in Japan that will give it bases closer to China, Chief Executive Officer Alan Joyce, 45, said in an interview in Sydney yesterday. The two new airlines, which begin flights next year, will add to Qantas' existing operations in Vietnam, Singapore and Australia.


"There is a huge opportunity for Qantas within the Asian markets," Joyce said. Having premium and low-cost units serving China and the rest of the region is "critical," he said.


Winning sales in the world's most populous country is central to Joyce's plans to turn around overseas operations losing around A$200 million ($207 million) a year because of competition from Middle East carriers on routes to Europe. Delta Air Lines Inc. and American Airlines have also added flights to China, where international air travel may grow 11 percent a year through 2014, according to the International Air Transport Association.


"I really think it is hard to over-estimate China's potential," said Peter Harbison, chairman of the Sydney-based CAPA Centre for Aviation. The country's size and rising intra- Asia trade provide "unbelievable upside internationally," he said.


Jetstar China


Qantas's low-cost budget arm Jetstar has led the Sydney- based company's growth in China by offering flights to eight cities from its hub in Singapore. The budget carrier's Vietnam unit also plans to add China flights, Joyce said. The main Qantas airline flies to Shanghai and Hong Kong from Australia.


Chinese services now represent more than 10 percent of Qantas's international revenue, compared with "low single digits" five years ago, Joyce said.


Qantas plans to order as many as 110 Airbus SAS A320s, including 78 of the revamped neo version, to support the new Southeast Asia premium carrier and the Japan budget venture. It announced the new international airlines last month alongside plans to pare flights to Europe and shed 1,000 jobs in Australia.


The job cuts bolstered calls by unions for job-security agreements that would limit the airline's ability to hire specialists such as pilots for the new Asian carrier.


Labor Talks


Joyce said the carrier may reach agreements with labor leaders by the end of the year. The company last month started talks with its long-haul pilots union with help from Fair Work Australia, the nation's industrial regulator.


"We are trying to get some leaders on the same page," Joyce said about labor groups. Still, "some of our unions regard a dollar of profit as enough and anything else as extravagant."


Qantas's net income fell 83 percent to A$9 million in the six months ended June after disruptions caused by earthquakes in Japan and New Zealand, Cyclone Yasi in Australia and a plume of volcanic ash that drifted across the Pacific Ocean from Chile.


The carrier fell 1.6 percent to A$1.495 yesterday Sydney trading. It has declined 41 percent this year, compared with a 27 percent drop for the Bloomberg World Airlines Index, which tracks 30 stocks.


Decision on Base


Qantas plans to make a decision on whether to base its new premium airline in Singapore or Kuala Lumpur within two months, Joyce said. Singapore has the advantage of a bigger business travel base, while Kuala Lumpur may offer less competition and the chance to work with Malaysian Airline System Bhd. and AirAsia Bhd., he said.


Like all of the company's overseas operations, Qantas will work with a local partner on the new premium unit to get around international rules governing airline ownership. The Jetstar Japan venture will be part-owned by Japan Airlines Co. and Mitsubishi Corp.


Joyce founded Jetstar in 2004, four years after joining Qantas following stints at Aer Lingus Group Plc and Ansett, which was Australia's number two carrier before collapsing 10 years ago.


2.  Andrew David To Be Next Leader Of Tiger Airways Australia


Tiger Airways has selected Andrew David, a veteran of the local airline industry, as the person to turn around the fortunes of its troubled Australian operation.


David served as chief operating officer of Virgin Blue from 2005 to November 2010 and previously held senior leadership roles at Air New Zealand. He was considered a contender to take over at Virgin Blue before current CEO John Borghetti was appointed.


The selection of a new leader for Tiger Australia was a particularly crucial decision for parent Tiger Airways Holdings. The airline has recently returned to service after a five-week grounding due to safety concerns by Australian regulators. Even before that, it was a financial drain on the parent company.


With its choice of David, Tiger has opted for someone with strong experience in the Australasian airline market. He will be expected to restore confidence in the carrier and rebuild its network. Tiger is gradually resuming routes after its grounding, but has already said it will have a smaller network than before.


David, who will take over Oct. 17, will be the third CEO Tiger Australia has had in less than three months. CEO Crawford Rix left the airline soon after it was grounded in July, and the CEO of the Tiger Airways Holdings parent company, Tony Davis, was directed by the company's board to take over the Australian operation. The Tiger board announced in late August that Davis would leave on Nov. 1. Chin Yau Seng, who has replaced Davis as head of Tiger Airways Holdings, says that David “brings with him a wealth of experience in the airline business and a proven track record as a leader and manager.”


Aviation NEWS By
Neha Jain
Aviation NEWS Reporter





       
   

              



            
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