Tag Archives: Qantas

Qantas climbs back to profit

Updated February 21, 2013 20:02:09

Qantas has bounced back from a steep full-year loss last financial year, to post a $111 million half-year profit.

The airline’s net profit after tax for the six months to the end of December 2012 jumped 164 per cent on the same period a year earlier, and was up from a $287 million loss in the previous half-year.

Underlying profit before tax, which also excludes most one-off costs and gains, was up more than 10 per cent on the same period last year to $223 million.

However, both the underlying and statutory profits include $125 million in revenue from an agreement negotiated between Qantas and Boeing in August 2012 to restructure the airline’s order for B787 Dreamliners.

The airline’s chief executive, Alan Joyce says the cancellation of 35 Dreamliners and the sale of its half share in road-freight venture StarTrack is paying off.

“Today’s result includes $125 million of compensation income from Boeing,” he said.

“This compensation settlement, negotiated by Qantas management, recognises the opportunity cost to our business incurred by the delay in the delivery of the 787s, which affected Jetstar, Qantas International and Qantas domestic.”

The major difference between underlying and statutory profit was $136 million in one-off “transformation costs”, as the airline restructures some of its businesses.

The company says all parts of its business were profitable in the half, except Qantas International which posted a before tax loss of $91 million.

However, it noted that its international division cut its losses by 65 per cent in the half compared with a year earlier.

The airline’s chief executive Alan Joyce says Qantas is now starting to reap the benefits of its restructuring program, which resulted in large short-term costs when management grounded the airline in response to staff industrial action.

“In total, the group achieved $172 million in transformation benefits in the first half of 2013,” he noted in the report.

“The operating environment remains complex and volatile, but we are now beginning to realise the benefits of the tough decisions that we have made over the past 18 months.”

Despite this improvement, Qantas has warned its outlook for the current six months remains challenging and volatile, and has declined to provide profit guidance due to uncertainty around fuel costs, competition, exchange rates and the global economy.

The airline has elected not to pay an interim dividend, but investors are still happy with the result, pushing Qantas shares up 4 per cent to $1.68 by 10:32am (AEDT).

Topics: business-economics-and-finance, company-news, air-transport, australia

First posted February 21, 2013 09:20:00

Business concern as Qantas cuts Singapore link


Tourism and business leaders are disappointed Qantas has cancelled its last international sector into and out of Adelaide.


The airline will end its Adelaide-Singapore service next month as part of a restructuring of its Asian operations.


Francis Wong, from the Council for International Trade and Commerce, said most international travellers to Adelaide preferred direct flights rather than travelling via east coast cities.


“We want Qantas to fly to every port including Adelaide, South Australia. If we’re not on the international scene that Qantas is flying down here, we send the wrong message that Adelaide is not up to the international standard, that it does not warrant an international flight,” he said.


Mr Wong said losing a valuable cargo service also was a problem.


“If we can make it more convenient for people to ship stuff overseas it will encourage more exports and also reduce the costs of the shipment and that will make our product more competitive in the international market,” he said.


Qantas is making changes as it forms an alliance with Emirates and moves more of its travellers via Dubai rather than Singapore.


The deal remains subject to government and regulatory approval.


As part of its latest changes, Qantas also will reduce its Perth-Singapore services.


But the airline said it would increase its Brisbane-Hong Kong service from four per week to seven and add four more Sydney-Singapore services each week.

Topics: air-transport, industry, transport, tourism, business-economics-and-finance, travel-and-tourism, adelaide-5000, singapore, sa, australia

First posted February 05, 2013 11:17:38

Qantas to introduce Dreamliners despite safety issues


Qantas says it remains committed to introducing the Boeing 787 Dreamliner to its fleet despite safety issues with the fuel-efficient jets.


All Boeing’s 787s are out of action as investigators in Japan and the United States try to find the cause of two incidents with the plane’s lithium-ion batteries.


Qantas chief executive Alan Joyce says despite the problems, the airline’s order for the planes remains.


“We believe that Boeing are a great airline manufacturing company, they’re a great engineering company and they will fix this problem eventually,” he said.


“They’re still producing the aircraft, so the production line hasn’t stopped. They have stopped delivering aircraft to customers.


“Our aircraft are due to arrive, the first one in August. We haven’t been advised of any delay at this stage.”


Japan’s transport safety agency says it is still unclear whether battery chemistry or an electrical issue caused the main battery on an All Nippon Airways (ANA) 787 to overheat last month.


The ANA flight was forced to make an emergency landing after the battery problems triggered an onboard smoke alarm.


The head of Japan’s Transport Safety Board, Norihiro Goto, says investigators may widen their probe of the battery problems to other equipment on the technologically advanced aircraft.


Mr Goto said CT scans showed six of the main battery’s eight cells on the Dreamliner were badly damaged, charred and deformed.


In a separate incident, a battery on a Japan Airlines 787 caught fire at a US airport.


US officials said on Friday that they were making progress in their investigations but were yet to set a timetable for completion.


ABC/AFP

Topics: business-economics-and-finance, air-transport, australia, japan, united-states

Qantas cancels Adelaide-Singapore flights


Qantas will axe its direct flights between Adelaide and Singapore in April as part of a national restructure of its Asian services.


Adelaide Airport says the airline provides three weekly flights direct from Singapore to Adelaide and another three from Adelaide to Singapore via Sydney.


The airport says the decision is disappointing and comes as the number of international passengers using the terminal continues to grow.


Adelaide Airport says the loss of the Qantas flights will be partially offset by Singapore Airlines’ decision to increase its Adelaide services in July.


But Senator Nick Xenophon has labelled Qantas’s decision an insult to the state.


He says Adelaide is being marginalised by the airline.


“We now have a crazy situation where other countries’ airlines are bringing more and more flights into Adelaide from overseas yet Qantas has now severed its last remaining flights in and out of Adelaide on an international route,” he said.


“That, to me, is a disgrace.


“Qantas says that they’ve been losing money on the Adelaide-Singapore route when Qantas employees tell me that they’re flights out of Adelaide to Singapore have invariably been incredibly full.”


The Transport Workers Union says it expects the airline’s decision will lead to job losses.


Branch organiser Matthew Spring says Qantas workers were given no warning about the changes.


“They only found out in the same that way we did, through the media and through us ringing them. They’re shocked,” he said.


“One of my delegates said ‘I don’t understand that, those flights are coming in loaded, they’re not empty, they’re coming in fully loaded. Why would you want to get on a domestic flight and fly to Melbourne to fly out to Singapore, when you go straight from here to Singapore on another flight?’”


Qantas says it is working on a deal with Dubai-based airline Emirates.

Topics: air-transport, travel-and-tourism, sa, adelaide-5000, singapore

First posted February 04, 2013 17:18:36

Australia’s Qantas says no changes to Dreamliner order

qantasSYDNEY: Australian airline Qantas said Wednesday there were no changes to an order for 15 Dreamliners for its low-cost carrier Jetstar after Japan’s two biggest airlines grounded the Boeing models.


 


“There are no changes to our order,” a Qantas spokeswoman told AFP.


Copyright AFP (Agence France-Presse), 2013

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Qantas health irrelevant in Emirates tie-up: ACCC


Australia’s competition watchdog says there does not appear to be any evidence that Qantas is exaggerating the problems in its international business in order to garner approval for a joint venture with the Middle Eastern carrier, Emirates.


In December, the Australian Competition and Consumer Commission granted draft approval for a tie-up between the two airlines.


Unions and the independent senator, Nick Xenophon, have called for the ACCC to undertake an audit of Qantas’s finances to see if costs are being shifted around.


However, the ACCC’s chairman Rod Sims has told the AM program that an audit is not necessary because the deal will not have a significant effect on competition.


“Had we said, look the competitive detriment is really strong, therefore the only way you could justify this is the fact that Qantas is going to get off these routes and is in dire trouble, then you would have needed to do what Senator Xenophon in particular is talking about,” he explained.


“But we didn’t find that amount of detriment to justify that.”


Mr Sims says the ACCC’s analysis of the deal found there would be some small benefits to passengers through increased connections and greater access to reward programs, and little reduction in competition because the routes currently serviced by both Qantas and Emirates also have many other airlines operating on them.


“When we looked at the Qantas accounts and we looked at the logic of their business, we really didn’t see that absent the deal, there’d be much change to their flying to the US or Asia, for example, but we did think that they are under some pressure on the European legs, but we didn’t think there was going to be much change there,” he said.


“It’s a very competitive route there so, whether Qantas and Emirates combine or not, there really isn’t going to be much competitive detriment because of all the other airlines that can help you fly between Australia and Europe.”

Topics: business-economics-and-finance, company-news, air-transport, regulation, australia

First posted January 14, 2013 10:23:20

Tourism Australia backs chief in Qantas row

Sydney: Australia’s official tourism agency on Thursday threw its full support behind its boss Geoff Dixon despite claims by national carrier Qantas that he is trying to unseat the airline’s management.

Dixon ran Qantas from 2001 until 2008 when current chief Alan Joyce took over and their relationship has descended into a bitter feud over the direction the airline is taking.

On Wednesday, Qantas severed its 40-year relationship with Tourism Australia, cancelling an Aus$50 million (Dh191 million) deal “due to a potential conflict of interest of the agency’s chairman”.

It claimed Dixon was a member of a syndicate “committed to unravelling Qantas’ structure and direction”.

Article continues below

But Tourism Australia said Dixon had previously declared his interest in Qantas, in line with governance requirements and as far as it was concerned, there was no “unmanageable conflict of interest”.

“As per regular Board protocols, having declared the interest, chairman Geoff Dixon will continue to absent himself from all matters relating to the Qantas Group,” Tourism Australia deputy chair Kate Lamont said following a board meeting on the issue.

Tourism Australia stressed that, “while important”, its partnership with Qantas represented about six per cent of its total marketing spending and “we are confident that our future spend won’t be compromised in any way”.

Tourism Australia “will continue to aggressively market Australia to overseas consumers”, said managing director Andrew McEvoy.

“Tourism Australia works with many commercial partners, including 20 international airlines as well as the States and Territories, Australian industry and international travel distributors.”

Media reports said Tourism Minister Martin Ferguson had also backed Dixon, a long-time friend, satisfying himself there was no breach of governance rules.

Dixon’s consortium is said to include retail entrepreneur Gerry Harvey, advertising guru John Singleton and another former Qantas executive Peter Gregg.

Media reports say the group has been buying up Qantas shares and scouting for global investors, mainly from China, to support a takeover and stymie Qantas’ planned 10-year tie-up with Emirates.

The proposal was unveiled in September but has yet to be cleared by the competition regulator.

In August, Qantas posted its first loss since privatisation in 1995, plunging Aus$244 million into the red due to intense competition in the region, rocketing fuel costs and the strong Australian dollar.

Qantas cuts ties with Tourism Australia

Updated November 28, 2012 20:59:34

The deepening ill feeling between current Qantas management and former chief executive Geoff Dixon has resulted in the airline severing a 40-year partnership with Tourism Australia.

Qantas this morning confirmed it had “suspended any future dealings” with Australia’s official tourism agency, saying: “Qantas cannot continue to collaborate with an agency whose chairman is a member of a syndicate committed to unravelling Qantas’s structure and direction.”

The airline’s chief executive, Alan Joyce, wrote to Tourism Minister Martin Ferguson yesterday to tell him of the decision to suspend the $50 million marketing deal.

Qantas says it will shift its financial support of the tourism industry to state bodies and today Mr Joyce told an aviation meeting the company would continue to support tourism operators.

“We deemed it prudent to suspend our partnership with Tourism Australia, we will of course continue to be a proud sponsor of tourism in Australia through other means,” he said.

“The tourism industry can be assured that not one dollar of tourism marketing will be lost as a result of this decision.

“We believe we are better off working with the states closely in terms of tourism activity.

“We are not pulling back on tourism support, we are working and have been working in the past with some states like Queensland, like Victoria, like NSW – all the states in the country.”

Tourism Australia’s chairman, Mr Dixon, is a former chief of Qantas and part of a group of investors reportedly seeking control of the airline.

A spokesman for Tourism Australia says it has received a letter from Qantas about the split.

In a statement, Mr Ferguson said the split was a commercial matter that had nothing to do with Tourism Australia or the Government.

He said he had referred the issues raised by Qantas to the board of Tourism Australia to consider and report back.

“This conflict has arisen from the involvement of Tourism Australia’s chairman with a syndicate that is actively canvassing fundamental changes to the Qantas Group strategy, including the proposed partnership with Emirates,” Qantas said in a statement.

Meanwhile, Harvey Norman chairman Gerry Harvey has shed light on rumours he is involved in the takeover bid for Qantas.

Mr Harvey admitted to being a passive investor in the national carrier amid speculation he was part of the consortium pushing for strategic change at the airline.

Rumours about the possible takeover bid have been swirling for months.

Other names linked to the consortium include former Qantas chief financial officer Peter Gregg, venture capitalist Mark Carnegie and ad man John Singleton.

“That is what happens with companies when they go below their asset backing,” Mr Harvey said.

“They are not performing that well and they become the subject of rumour.

“And when that happens, often there is substance to that rumour and there are people out there that would be interested in investing in Qantas with a view to influencing the company in some manner to do some things differently and consequently they’d end up making a little profit.”

Topics: business-economics-and-finance, air-transport, industry, tourism, australia

First posted November 28, 2012 09:05:45

Qantas cuts tourism board ties

28 November 2012 Last updated at 04:02 GMT Qantas planes Goeff Dixon was in charge at the national flag-carrier between 2001 and 2008 Qantas said it has severed ties with Australia’s official tourism agency over its chairman’s ‘conflict of interest’.

Qantas informed the tourism ministry it was suspending a A$50m ($52m; £32m) marketing deal.

Tourism Australia’s chairman, Geoff Dixon, who is a former Qantas chief executive, is part of a group of investors reportedly seeking changes at the airline.

The move ends a 40 year partnership.

“This conflict has arisen from the involvement of Tourism Australia’s chairman with a syndicate that is actively canvassing fundamental changes to the Qantas Group strategy, including the proposed partnership with Emirates,” Qantas said in a statement.

Mr Dixon was in charge at the national carrier between 2001 and 2008, after which the current chief executive Alan Joyce took over.

“Qantas cannot continue to collaborate with an agency whose chairman is a member of a syndicate committed to unravelling Qantas’ structure and direction.”

However, the airline said this did not mean Qantas would stop supporting the tourism industry in Australia.

“Not one dollar will be removed from tourism marketing as a consequence of this decision.

“Rather than providing this support through the federal agency, Qantas will instead look to do so through the states,” it said.

The carrier also said some key initiatives already underway would not be halted.

Qantas ends Tourism Australia link amid sabotage claim

Sydney: Qantas Airways on Wednesday severed a lucrative marketing deal with Tourism Australia after claiming its boss was leading a consortium trying to unseat the airline’s management and buy out the company.

The carrier said it had advised the country’s official tourism agency it was halting the A$50 million (Dh192.2 million) deal “due to a potential conflict of interest of the agency’s chairman”, former Qantas chief Geoff Dixon.

Dixon ran the national flag-carrier between 2001 and 2008, when Alan Joyce took over. The two men, previously confidantes, are now locked in a bitter feud over the direction the airline is taking.

“This conflict has arisen from the involvement of Tourism Australia’s chairman with a syndicate that is actively canvassing fundamental changes to the Qantas Group strategy, including the proposed partnership with Emirates,” Qantas said.

Article continues below

“Qantas cannot continue to collaborate with an agency whose chairman is a member of a syndicate committed to unravelling Qantas’ structure and direction.”

Media reports have said the consortium, which is also said to include retail entrepreneur Gerry Harvey, advertising guru John Singleton, and another former Qantas executive Peter Gregg, have been buying up shares.

The reports say they were scouting for global investors, mainly from China, to back a takeover and stymie Qantas’s 10-year tie-up with Emirates, which was unveiled in September but remains before the competition regulator.

The syndicate is reportedly disaffected with the performance of Joyce and the company’s floundering share price, preferring to sell off the “Flying Kangaroo’s” frequent flyer programme and low-cost offshoot Jetstar.

They were also believed to be lukewarm on the proposed partnership with Emirates, which will see Qantas’s hub for European flights shift to Dubai from Singapore, with the airlines cooperating on pricing, sales and scheduling.

Joyce told a media lunch that selling the frequent flyer programme and Jetstar would be a big mistake and said shareholders were behind the current management’s strategy.

“We have full support for the strategy that is there,” he said.

Joyce wrote to Tourism Minister Martin Ferguson on Tuesday to tell him of the Tourism Australia decision, warning that Qantas would refuse to have any further dealings while Dixon was chairman.

Despite ending the 40-year partnership, Qantas said it remained committed to supporting the tourism industry.

“Not one dollar will be removed from tourism marketing as a consequence of this decision. Rather than providing this support through the federal agency, Qantas will instead look to do so through the states,” it said.

Tourism Australia managing director Andrew McEvoy said in a statement the organisation “will consider the matter of Qantas’ suspension of future activities later today {Wednesday]”.

Back in August, Qantas posted its first loss since privatisation in 1995, plunging A$244 million into the red due to intense competition in the region, rocketing fuel costs and the strong Australian dollar.

It was a significant reverse from a net profit of A$250 million a year earlier and Joyce has set about cutting aircraft orders, dropping unprofitable routes, shedding jobs.

Qantas shares ended 2.24 per cent lower at A$1.31.

Qantas ends Tourism Australia link amid sabotage claim

Wednesday, 28 November 2012 09:30 Posted by Imaduddin

194352-01-02SYDNEY: Qantas Airways on Wednesday severed a lucrative marketing deal with Tourism Australia after claiming its boss was leading a consortium trying to unseat the airline’s management and buy out the company.

The carrier said it had advised the country’s official tourism agency it was halting the Aus$50 million (US$52 million) deal “due to a potential conflict of interest of the agency’s chairman”, former Qantas chief Geoff Dixon.

Dixon ran the national flag-carrier between 2001 and 2008, when Alan Joyce took over. The two men, previously confidantes, are now locked in a bitter feud over the direction the airline is taking.

“This conflict has arisen from the involvement of Tourism Australia’s chairman with a syndicate that is actively canvassing fundamental changes to the Qantas Group strategy, including the proposed partnership with Emirates,” Qantas said.

“Qantas cannot continue to collaborate with an agency whose chairman is a member of a syndicate committed to unravelling Qantas’ structure and direction.”

Media reports have said the consortium, which is also said to include retail entrepreneur Gerry Harvey, advertising guru John Singleton, and another former Qantas executive Peter Gregg, have been buying up shares.

The reports say they are scouting for global investors, mainly from China, to back a takeover and stymie Qantas’s 10-year tie-up with Emirates, which was unveiled in September but remains before the competition regulator.

The syndicate are reportedly disaffected with the performance of Joyce and the company’s floundering share price.

The Emirates alliance will see Qantas’s hub for European flights shift to Dubai from Singapore, with the airlines cooperating on pricing, sales and scheduling.

Joyce wrote to Tourism Minister Martin Ferguson on Tuesday to tell him of his decision, warning that Qantas would refuse to have any further dealings with Tourism Australia while Dixon was chairman.

“While it is clear the chairman of Tourism Australia is part of that consortium, that is very much out there briefing against the company, we believe we are better off working with the states on tourism activity,” Joyce added at a lunch function.

Despite ending the 40-year partnership, Qantas said it remains committed to supporting the tourism industry.

“Not one dollar will be removed from tourism marketing as a consequence of this decision. Rather than providing this support through the federal agency, Qantas will instead look to do so through the states,” it said.

“The suspension includes both Qantas and Jetstar, but to avoid penalising the tourism industry, will not include some key initiatives that are already underway.”

Tourism Australia managing director Andrew McEvoy said in a statement the organisation “will consider the matter of Qantas’ suspension of future activities later today”.

Back in August, Qantas posted its first loss since privatisation in 1995, plunging Aus$244 million into the red due to intense competition in the region, rocketing fuel costs and the strong Australian dollar.

It was a significant reverse from a net profit of Aus$250 million a year earlier. Qantas shares were down 1.7 percent at Aus$1.31 in afternoon trade.

Copyright AFP (Agence France-Presse), 2012

Qantas to buy back shares, repay debt

Updated November 15, 2012 11:35:32

Qantas has announced it will buy back some of its shares and repay some of its debt early, as it tries to boost returns for its shareholders.

The struggling airline, which has seen its share price plummet this year, will buy back about 4 per cent of its shares for up to $100 million from next month.

Qantas chairman Leigh Clifford says the company’s shares are trading well below their true value.

“The board believes the current Qantas share price does not reflect fair value of the group, particularly considering the underlying strength of its domestic, loyalty and Jetstar businesses and the proposed partnership with Emirates,” said Mr Clifford.

“Our continued progress towards the turnaround strategy for Qantas International, plus cash inflows from recent transactions, gives the board confidence to approve these capital management measures.”

The airline is also paying off a large amount of debt early, and is aiming to reduce its borrowings by $1 billion over the current financial year.

The moves are being funded by the sale of the airline’s stake in road freight company StarTrack and the settlement from Boeing in relation to the company’s 787 aircraft order.

Qantas shares closed yesterday at $1.23 after hitting an all-time low of 97 cents in June, but had risen 5 per cent to $1.29 by 11:31am (AEDT).

Topics: air-transport, business-economics-and-finance, australia

First posted November 15, 2012 10:46:05

Qantas cuts 400 engineering jobs

Updated November 08, 2012 20:48:22

Qantas is cutting more staff from its engineering division, with about 400 jobs set to go.

As part of a restructure of its engineering operations flagged in May, the airline is cutting around 200 daily maintenance positions in Sydney due to what it describes as “overstaffing”, as well as some employees at Qantas Defence Services who maintain the Air Force’s C130 Hercules aircraft.

Qantas will also cut around 250 contractors and “a small number” of employees working on a Boeing 747 project at Melbourne’s Avalon airport that finishes later this month.

However, the airline will be filling up to 120 new positions in Brisbane as maintenance is transferred from Melbourne’s Tullamarine operation to the Queensland facility, which is receiving a $30 million upgrade.

Qantas says the changes will result in a net reduction of around 150 employees and 250 contractors.

The head of the airline’s domestic operations, Lyell Strambi, says a more modern fleet of aircraft requires less maintenance and Qantas needs to cut costs to stay internationally competitive.

“Our cost base in heavy maintenance is more than 30 per cent higher than our competitors who do the vast majority of their maintenance overseas,” he said in a statement.

“We must close this gap to secure Qantas’s future viability and this restructure will assist in making Qantas maintenance facilities in Australia more competitive.”

Unions have expressed disappointment at the job losses and are warning staff cuts will risk Qantas’s reputation as one of the world’s safest airlines.

“The engineering job cuts announced by Qantas management today are another step towards turning our national carrier into an unsafe airline,” said Steve Purvinas, the federal secretary of the Licenced Aircraft Engineers Association.

“It beggars belief that Qantas management’s answer to a recent spate of maintenance errors, many being investigated by CASA, is to sack more staff.”

Australian Workers Union (AWU) Victorian secretary Cesar Melham says Qantas should assist employees who want to move to Brisbane to take up positions there.

“There has been no consultation and no consideration for the lives that have been turned upside down by today’s announcement,” he said.

“We understand there are something like 110 positions available in Brisbane heavy maintenance which is small comfort to people whose lives are in Victoria.”

Qantas says further job losses are likely in its engineering division as improved technology continues to lower maintenance requirements, and as it eventually transitions to just one heavy maintenance base in Australia.

The airline says it has no timeline yet set for the transition to one heavy maintenance base.

Qantas says its main daily maintenance base will continue to operate at Sydney Airport, with large daily maintenance bases in Melbourne, Brisbane, Perth, Adelaide, Cairns and Darwin.

Topics: business-economics-and-finance, company-news, air-transport, australia, sydney-airport-2020, nsw, brisbane-4000, qld, tullamarine-3043, vic

First posted November 08, 2012 13:44:58

Qantas captain forced to abort Singapore flight

Posted November 01, 2012 06:52:57

Engineers are assessing a Qantas aircraft that returned to Sydney Airport last night because of a strange smell in the cabin.

The Singapore-bound Airbus A380 left Sydney yesterday evening, but the captain decided to turn around only 30 minutes into the flight after a strong smell filled the cabin.

The plane landed safely in Sydney just after 8.00pm and was met on the runway by paramedics and other emergency workers.

A Qantas spokesperson says the landing was made as a precaution, and that the source of the smell is being investigated by engineers.

The 271 passengers on board were given hotel accommodation overnight and are expected to leave on another flight this morning.

Last month a Qantas Boeing 747, also travelling from Sydney to Singapore, was diverted to Darwin because of a burning smell in the cabin.

Topics: air-and-space, air-transport, sydney-airport-2020, nsw, australia

Joyce’s bonus up in the air at Qantas AGM

By Justine Parker and David TaylorUpdated November 02, 2012 14:19:14

Qantas chief Alan Joyce has faced angry shareholders and unions a year after he grounded the airline’s entire fleet amid bitter industrial disputes.

Shareholders at the company’s annual general meeting in Canberra will decide whether to grant Mr Joyce a long-term pay bonus for this financial year, although his base salary will be unchanged at $2.1 million.

Qantas posted its first annual loss of $245 million last year and announced a restructure that will see the loss of around 2,800 jobs.

Investors have largely turned their back on the company. Qantas Airways shares were trading at just over $6 in late 2007.

Now, after moving up from a low of 97 cents, they are trading around $1.30.

Investors have not received a dividend since 2008.

A defiant Mr Joyce used his speech to the AGM to again defend his decision to ground the Qantas fleet last year.

“We responded in the only way available to us as an employer under the Fair Work Act,” he said.

“The grounding of the Qantas fleet brought certainty for our customers, employees and shareholders.”

Mr Joyce described last year as challenging but pivotal.

He said Qantas’s new alliance with Emirates was the “most significant” in the airline’s history, as it seeks to rescue its loss-making international arm.

Sadly it really doesn’t matter how excellent the rower of this particular boat is, if you’re rowing a boat with a big hole in the side of it, the ship is going to sink.

“I absolutely can say this is not going to be a risk to employment in Qantas,” he said.

“This is going to strengthen and secure jobs.”

Shareholder activist Jack Tilburn was typically frank in his attack on the board, led by chairman Leigh Clifford.

“I would give you four marks out of 10 as chairman, I’d give Joyce as managing director three marks out of 10.”

Mr Clifford said he recognised it had been a difficult period for shareholders.

“However, the significant steps taken over the past 12 months have been consistent with the group’s goal of building long-term shareholder value,” he said.

“We remain committed to resumption of dividends at the earliest opportunity.”

But shareholders are concerned that may take some time.

“The final full 12 months’ dividends, Mr Clifford, for Air New Zealand if you ever do forensic investigations like I do, 5.5 cents per share – Air New Zealand,” Mr Tilburn said.

“Us – bugger all. Nothing. Last year, this year. I forget what three years ago was but I’ll ask Mr Clifford.

“And I’ll end up on that matter of dividends. We want them, we should get them. You’ve got $4 billion in cash that is our money. We should get a dividend next year.”

If the plan developed by Mr Joyce is any guide, it may take years.

“In August last year I sent out the five-year plan for Qantas International along with the broader transformation initiatives for the group as a whole,” Mr Joyce said.

“The plan has the goal of returning Qantas international to profit in the short term.

“It will restore a great Australian airline to financial health, with Jetstar the only Australian-owned international airline serving this country.”

But Qantas International remains an unprofitable business and Qantas’s main rival Virgin has just made moves to take more domestic market share from the airline.

Mr Joyce says his priority is turning around the fortunes of the international business.

“Our focus now is on realising the full benefits of transformation measures and securing approval for the Emirates partnership,” he said.

Investment manager Roger Montgomery likened Qantas to a sinking boat.

“Sadly it really doesn’t matter how excellent the rower of this particular boat is, if you’re rowing a boat with a big hole in the side of it, the ship is going to sink,” he said.

“It’s a business that unfortunately has all the things that we don’t look for in an investment candidate. It is capital intensive, there is irrational and illogical competition, it is labour intensive and you are dealing with unions constantly.”

The Qantas Airways team will no doubt be waiting for the Australian Competition and Consumer Commission decision on Virgin’s proposed push to grab control of Tiger Airways.

Shares in Qantas Airways were unmoved at noon (AEDT).

Topics: business-economics-and-finance, air-transport, canberra-2600, australia, act

First posted November 02, 2012 11:47:56

Qantas loses landmark GST court case

Updated October 02, 2012 17:20:32

The High Court has ruled against Qantas in a landmark case seen as a key test of the Goods and Services Tax.

In a majority decision, the court ruled Qantas must pay GST to the Tax Commissioner on fares received, whether or not the passenger actually took the flight.

Qantas and Jetstar wanted to get back from the Australian Tax Office $34 million in GST that had been collected from customers who did not take flights they had booked.

The airline had argued it did not supply a service and therefore should not have to pay the tax.

However, the High Court found that Qantas and Jetstar’s contracts with their passengers did not provide an unconditional promise to carry passengers or their baggage on a particular flight.

“They supplied something less than that. This was at least a promise to use best endeavours to carry the passenger and baggage, having regard to the circumstances of the business operations of the airline,” the majority judgment of justices Gummow, Hayne, Kiefel and Bell stated.

“This was a “taxable supply” for which the consideration, being the fare, was received.”

Therefore, the promise was a service subject to the GST.

One judge, Justice Dyson Heydon, found in favour of Qantas, but even he acknowledged a victory for the airline would have resulted in customers having paid money to it that they were told would go to the ATO.

“The respondent [Qantas] seeks to acquire money paid by passengers who intended or expected that it would end up in the hands of the appellant [the ATO], not those of the respondent,” he observed.

“If the respondent’s argument is correct, the passengers who have not claimed their fares back have left the respondent in a position to gain money which it was never meant to have.”

In a statement, Qantas said it was disappointed with the court’s decision but said the ruling would not affect the company’s bottom line because the GST had already been paid to the tax office.

The court ruling comes on the same day Qantas and Australia Post announced they would be splitting their freight joint ventures.

Qantas chief Alan Joyce says the deal brings a $30 million windfall.

“That will be primarily focused at reducing our debt position,” he said.

Qantas will take over Australian Air Express and Australia Post will control Star Track.

Qantas shares were up 2.5 per cent at $1.22 following news of the deal

Topics: courts-and-trials, tax, air-transport, australia

First posted October 02, 2012 11:18:32

No high speed rail link: Qantas

Updated October 09, 2012 17:20:29

Qantas boss Alan Joyce has dismissed the idea of a high speed rail link between Sydney and Canberra, saying a second Sydney airport is the only way to meet the growing demand.

However Mr Joyce says Canberra might be a viable origin point for international flights to Asia in the future.

“There’s no point building fast train links to places like Canberra and assuming that will fix the problem,” he said.

“I don’t think even Michael O’Leary from Ryanair would have had a goal to claim that Canberra was a second Sydney airport, and he makes outrageous claims on airports around the world.

“We need a second Sydney airport.”

International flights made a loss for the airline last year, but Mr Joyce says there are business opportunities in putting on more direct flights from Australia to Asia.

Qantas may be flying Boeing 787 Dreamliners on international routes out of Canberra as early as 2016.

“We have looked at the Canberra market internationally on a number of occasions,” he said.

“That’s still potentially on our radar screens.

“We believe we’re one of the few carriers that could make something like that work but it all depends on us making the necessary changes, getting the partnership with Emirates.

ACT Labor and the Canberra Airport have backed the high speed rail link, but Prime Minister Julia Gillard says a feasibility study shows it is not yet viable.

“It’s a lot of money for a fast train that would do not only the interconnection to Sydney and Canberra, but also the interconnection to Melbourne,” Ms Gillard said.

“I think it’s some time away that you would see population density at a point that would make it viable.”

Topics: states-and-territories, urban-development-and-planning, rail-transport, canberra-2600, act

First posted October 09, 2012 17:06:30

Qantas in freight carrier deal to help debt woes

Updated October 02, 2012 14:07:01

Qantas has reached a deal to take over international air freight company Australian Air Express and sell its half stake in domestic road freight company Star Track to Australia Post.

Qantas and Australia Post both currently own half of the two cargo companies, as joint ventures.

The deal must be approved by the Australian Competition and Consumer Commission (ACCC) and the Federal Government.

The $431 million deal is expected to boost Qantas’s bottom line by $30 million.

Chief executive Alan Joyce says the airline will use the cash to pay down debt.

“Part of this was also focusing in on part of the business that we do regard as core, so Australian Air Express which is the air transport side of the business,” he said.

“That’s quite a good business for us to get some synergies out of.

“It’s a business where the top nine customers of the top 15 are freight customers anyway.”

Australian Air Express will be rebranded as Qantas Freight as part of the deal.

Australia Post chief executive Ahmed Fahour says Star Track is an important investment as the mail service seeks to boost its parcel delivery business.

“It offers us some critical infrastructure capabilities that are both strategic and provide significant commercial benefits to Australia Post,” he said.

‘We believe that under a single ownership of Star Track what that will mean for us is that we’re able to offer a far more comprehensive offer to our customers across the full spectrum.”

Qantas shares jumped 2.5 per cent shortly after plans to strengthen its freight network were announced.

Topics: air-transport, industry, business-economics-and-finance, australia

First posted October 02, 2012 13:20:21

Qantas: No alternatives to Emirates deal

Canberra: Qantas Airways Ltd’s chief executive said he was confident Australian regulators would approve a proposed alliance with Dubai’s Emirates and warned that a rejection would leave it no alternatives for operating flights to Europe.

Australia’s biggest airline announced a 10-year alliance with Emirates last month that is currently under evaluation by the competition watchdog, the Australian Competition and Consumer Commission (ACCC).

“There is no going back, and there is no alternative for us to make Europe work except this arrangement,” Joyce told an audience in Canberra on Tuesday. “And that’s fairly clear in the submission to the ACCC.”

Qantas, which is ending a 17-year partnership deal with British Airways, agreed to the alliance with Emirates to shore up its loss-making international business.

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The deal calls for sharing airport lounges and frequent flyer programmes, while Qantas will replace Singapore with Dubai as its hub for European flights.

The Australian government backed Qantas’s move in a submission to the ACCC on Monday, saying the alliance would provide benefits for consumers and deliver competition to the aviation market.

“We believe we do have a solid case,” Joyce said. “And the government agrees we have a solid case and that’s why they put in their submission in the last 24 hours.”

Qantas has been stripping costs out of its business after a year troubled by a record fuel bill, rising competition and a labour union that has opposed its spending cuts.

In August, it cancelled orders for 35 Boeing Co Dreamliner jets to further reduce costs after posting its first net loss in 17 years in the year to June 30.

Qantas shares rose 2 per cent to A$1.28 on Tuesday, down from a 12 month peak of A$1.83 in March.

Qantas CEO no alternative to Emirates deal if regulators balk

Tuesday, 09 October 2012 10:13 Posted by Shoaib-ur-Rehman Siddiqui

qantas CANBERRA: Qantas Airways Ltd’s chief executive said he was confident Australian regulators would approve a proposed alliance with Dubai’s Emirates and warned that a rejection would leave it no alternatives for operating flights to Europe.

Australia’s biggest airline announced a 10-year alliance with Emirates last month that is currently under evaluation by the competition watchdog, the Australian Competition and Consumer Commission (ACCC).

“There is no going back, and there is no alternative for us to make Europe work except this arrangement,” Joyce told an audience in Canberra on Tuesday. “And that’s fairly clear in the submission to the ACCC.”

Qantas, which is ending a 17-year partnership deal with British Airways, agreed to the alliance with Emirates to shore up its loss-making international business.

The deal calls for sharing airport lounges and frequent flyer programmes, while Qantas will replace Singapore with Dubai as its hub for European flights.

The Australian government backed Qantas’s move in a submission to the ACCC on Monday, saying the alliance would provide benefits for consumers and deliver competition to the aviation market.

“We believe we do have a solid case,” Joyce said. “And the government agrees we have a solid case and that’s why they put in their submission in the last 24 hours.”

Qantas has been stripping costs out of its business after a year troubled by a record fuel bill, rising competition and a labour union that has opposed its spending cuts.

In August, it cancelled orders for 35 Boeing Co Dreamliner jets to further reduce costs after posting its first net loss in 17 years in the year to June 30.

Qantas shares rose 2 percent to A$1.28 on Tuesday, down from a 12 month peak of A$1.83 in March.