Qantas is cutting 1,000 jobs after announcing a shock profits warning.
The Australian airline predicted a half-year loss of up to A$300 (£165 million) for July to December.
The airline said trading conditions had seen a “marked deterioration” amid tougher competition and slowing demand.
Chief executive Alan Joyce said the airline was facing “immense challenges”.
“Our November figures have shown us that there continues to be deterioration in the revenue performance of the business and our competitor [Virgin Australia] has just received $350m, meaning they can continue their uncommercial behaviour,” he told a media teleconference after the announcement.
“We are putting all options on the table in a review of our structure.”
The company’s share price fell 14.1% after the announcement. Qantas also said the outlook for its January to June period in 2014 remained “volatile”.
Sourced by Travel Weekly
Current laws restrict foreign stakes in Qantas to 49%, with overseas airlines allowed to own just 35%.
Qantas claims this puts it at a disadvantage to rivals such as Virgin Australia, which is not subject to the regulations.
But Sir Richard, writing on the Virgin.com website, claims that the Australian market is more than competitive already.
He wrote: “We began competing with Qantas in 2000 with just two planes and one route.
“Over the last 13 years we have grown the airline to more than 140 planes but flying in Australia has sometimes been akin to having a bleeding competition with a blood bank.
“Qantas was the giant in the market with a myriad of foreign alliances and advantages determined to bleed Virgin Blue, now Virgin Australia, dry.
“However thanks to the superior quality of Virgin Australia’s management and its staff, it has not only survived but has now managed to create a much more level playing field which is offering the customer more choice and better value.”
Qantas chief executive Alan Joyce wants “urgent, immediate action” from regulators to ensure his airline grows, despite already sealing a tie-up with Emirates and dominating the Australian market, the Daily Telegraph reported.
But Sir Richard said any such move from the authorities would be “grossly unfair”.
“Today Qantas’s alliances are still larger than Virgin’s, but our improved position is having a big impact on Qantas, who are now complaining about the intensified competition.
“It seems strange to me that a Liberal government would even consider tilting the playing field once again in Qantas’s favour.
“It would be grossly unfair, undermine the great work of Virgin Australia’s management team and staff and bewilder investors in Australia and worldwide.
“If Qantas was better managed and offered the public a decent service it would not be in the financial mess it is currently claiming it is in.
“Government should be there to encourage competition, not to prop up the weak when the going gets tough.”
Sourced from Travel Weekly
Ryanair takes a lot of flak for charging passengers extra for everything from checking in luggage to reserving a seat, but passengers flying on rival carrier Jet2.com actually pay more for ancillary services.
In fact, Jet2.com is one of the most successful airlines in the world at squeezing additional revenue out of passengers, according to a new report compiled by IdeaWorks Company.
Jet2.com’s ancillary earnings of $45.83 per passenger last year placed it fourth in a league table of carriers, behind AirAsiaX, Spirit and Qantas.
It is believed to have earned more than 26% of its total revenue from a la carte sales, such as onboard meals and duty-free, while Ryanair makes just over 21% of its income from the sale of extra.
Even though the €1.064 billion earned by Ryanair made it the sixth biggest earner in the world for ancillary revenue, the Irish carrier didn’t even feature in the top 10 league table for income per passenger.
Neither did easyJet, whose total earning of €880.9million were estimated as it declined to provide official figures to the compilers of the report.
Overall, 53 carriers earned a total of $27.1 billion from the sale of ancillary services and products, up from $2.45 billion earned by just 23 airlines in 2007.
Sourced by Travelmole
Cathay Pacific is opposing plans by Qantas to start a budget carrier in Hong Kong.
The Australian airline is seeking to create Jetstar Hong Kong as a joint venture with China Eastern Airlines.
But Cathay has lodged a formal objection to the application, claiming the proposal violates local laws and granting access would be detrimental to the city’s interests.
The airline argues that Jetstar Hong Kong does not meet the requirement that it must have its principal place of business in the city.
About half of Hong Kong’s traffic is controlled by Cathay and Asia’s biggest international carrier is seeking to defend that dominance while China’s economic growth slows, Bloomberg reported.
Cathay said: “The application would set a dangerous precedent by granting control of Hong Kong’s hard-negotiated sovereign air traffic rights to a carrier that is nothing more than a franchise operation controlled by a foreign airline.”
Sourced from Travel Weekly
By April Hutchinson
The rare sight of two A380s flying side by side has cemented a new partnership between Qantas and Emirates.
Each of the airlines had one of its superjumbos fly over Sydney Harbour as part of what Emirates’ president Tim Clark called a “seismic development for the global aviation industry”.
“No carriers have ever come together to do something like that and I think it is a real testament to the bond of our new link – it has taken a herculean effort from all involved to get this kind of structure in place so quickly and effectively,” said Clark, speaking at Emirates’ headquarters in Dubai after flying with Qantas up from Sydney. “This is the beginning of a long-term partnership.”
Clark added that the partnership was “not just a codeshare or interline arrangement”. “It is a joint venture and we will treat each other’s passengers as if they were our own,” he said.
The new partnership will see the airlines cooperate on their combined 98 flights a week between Australia and Dubai.
The carriers will combine operations for five years initially, including coordination on ticket pricing, scheduling and frequent flyer benefits.
Emirates is already in the throes of its own expansion into Australia, but it’s Qantas’ passengers that will really feel the benefit of the tie-up, now with easier access to 65 one-stop onward connections in the UK, Europe, North Africa and the Middle East via Dubai.
Reduced overall flying time from Europe to Australia was also said to be one of the key benefits.
Journey times from Melbourne and Sydney to the “top 10” destinations in Europe are cut by an average of two hours going via Dubai, according to Qantas chief executive Alan Joyce.
The tie-up will also go some way to helping the Australian airline recover from a difficult patch, with the partnership said to be worth around A$90 millionto Qantas and a bolster to its international business.
Joyce said: “We have already seen a six-fold sales increase in bookings to Europe on the joint network over a nine-week period compared to last year. It’s obvious this new partnership with Emirates gives us a fantastic opportunity to grow.”
Before its new partnership with Emirates, Joyce said Qantas had only really been able to access five connecting destinations via Singapore.
The airline will now establish an international hub for itself in Dubai, where it will be the only other airline able to use Emirates’ Terminal 3.
All Emirates and Qantas A380 flights will use the terminal’s specially-built US$3 billion Concourse A which opened in January.
Capable of handling 60 million passengers a year through 20 gates, Concourse A is the world’s first purpose-built A380 facility and has direct boarding from lounge to aircraft for business and first passengers.
Australia’s minister for Infrastructure and Transport Anthony Albanese also flew up to Dubai to mark the official launch of the partnership and saidit was “vital that the national iconic brand of Qantas be successful”,claiming the tie-up would have a significant impact on tourism and trade.
“This partnership opens up new markets for Australians into Europe and North Africa with advantages for tourism, trade and economic opportunities,” he said. “It also allows for greater regional tourism opportunities in Australia.”
Clark said there was no reason why the relationship could not develop further in operational synergies down the line.
Joyce added that Qatar Airways’ imminent arrival into the oneworld alliance, of which Qantas is a member, was not an issue for him or Emirates.
“Oneworld has always been a very loose alliance,” said Joyce. “And we have worked with other airlines in other alliances in the past – we are perfectly free to go and do deals such as this one with Emirates.”
Nor did Clark rule out the option of seeking similar tie-ups for Emirates “if another airline has the chemistry we have with Qantas”.
Qantas has also rolled out a new suite of product enhancements in first and business class to coincide with the new partnership.
What does it mean?
Qantas and Emirates share 98 flights a week between Australia and Dubai every week / 14 per day
There will be 32 destinations in Europe available from Dubai
All Qantas flights to the UK will now be Sydney-Dubai-London & Melbourne-Dubai-London
Qantas flights to London from Melbourne and Sydney via Dubai are about 30 minutes shorter now; stopovers in Dubai are 1hr 30 or 1hr 45mins
Eligible business and first Qantas passengers can now avail themselves of a chauffeur drive service (matching Emirates’ existing service) when travelling to Europe; will extend to other parts of Qantas network from July
Shared lounge access for eligible Qantas and Emirates passengers (although Qantas customers’ oneworld privileges and conditions still apply, i.e. able to use BA’s lounges)
Shared redemption of Qantas Frequent Flyer or Emirates Skywards points
Harmonised baggage policies including an increase in Qantas economy checked baggage to 30kg from 23kg
Sourced by TTG Digital
Australia’s competition watchdog has given the thumbs up to the Qantas joint venture with Emirates on routes between Europe and Australia.
The alliance will see Qantas shift its hub for European flights to Dubai from Singapore after it dropped a long standing partnership with British Airways on the ‘kangaroo route’.
The partnership with Emirates, which was agreed last year, will see the two carriers collaborate on pricing, sales and flight scheduling.
The Australian Competition and Consumer Commission said it thought the benefits of the alliance outweighed the drawbacks.
Chairman Rod Sims said: “The ACCC considers that the alliance is likely to result in public benefits through enhanced products and service offerings by the airlines, and improved operating efficiency.”
But approval was limited to five years, half the time the airlines had originally bid for. The green light was conditional on the two carriers maintaining their pre-alliance capacity on routes between Australia and New Zealand amid concerns about reduced competition.
Emirates president Tim Clark hailed the deal as “game-changing”.
He said: “Dubai is a leading global hub and through it, our two airlines will connect Australia to Europe, the UK and Northern Africa more smoothly than ever before.”
The Emirates alliance is seen as key to attempts by Qantas to turn around its loss-making international operations.
Chief executive Alan Joyce said: “Qantas is an Australian icon and the future of its international business is much brighter with this partnership.
“Customers are already responding very strongly to the joint network that Qantas and Emirates have built, and to the frequent flyer benefits that extend across it, with a significant increase in bookings.
Sourced by Travel Weekly
By Kurt Hoffmann
Lufthansa Technik will perform some Airbus A380 wing rib feet repairs, chairman August Wilhelm Henningsen told ATW in Hamburg.
“We have taken on new responsibilities in terms of A380 support and carrying out the wing rib feet repairs mandated by Air France,” Henningsen said.
Henningsen expects one A380 wing rib repair to take between 40 to 50 days. About 40 technicians will work on the aircraft at the same time. The first aircraft, a Lufthansa A380, is already undergoing repair.
Lufthansa Technik will handle 10 Lufthansa A380 repairs at its base in Frankfurt. It will work with AMECO Beijing to carry out wing rib feet repairs on nine Emirates Airline A380s.
Twelve Qantas A380s will undergo the repair work at the Lufthansa Technik Philippine MRO facility. “A year ago, we opened our third widebody hangar at Lufthansa Technik Philippines. Now we are also able to provide technical support for the A380s. Among one of the first customers in Manila is Qantas with A380 cabin modifications,” he said.
Sourced by ATW
Qantas is dropping a long-standing kangaroo route partnership with British Airways in favour of a 10-year global alliance with Emirates.
The two airlines will collaborate on pricing, sales and flight scheduling as the Australian carrier looks to turn around its loss-making international network.
The move comes just days after Gulf-based rival Etihad doubled its investment to 10% in Virgin Australia and will see Qantas move its hub for European flights to Dubai from Singapore.
Qantas will launch daily Airbus A380 services from both Sydney and Melbourne to London via Dubai. This means that together Emirates and Qantas will offer 98 weekly services between Australia and Dubai.
The airline is to restructure its Asian network in an effort to strengthen its focus on services to and within the region.
Qantas chief executive Alan Joyce said: “Over the past 17 years the joint business with British Airways has been central to the Qantas network.
“However, global operating conditions have changed and partnership with Emirates is the right strategy for Qantas.
“A key objective is to make Qantas International strong and viable, and bring it back to profitability. This partnership will help us do that.
“This Emirates partnership will help us make an orderly withdrawal, and also ensure we can continue to service our customers over the long term,” Joyce said.
Willie Walsh, chief executive of BA parent International Airlines Group, said the end of the joint business with Qantas would not affect the two airlines’ membership of the Oneworld alliance.
He said: “We’re ending the joint business on amicable terms and support Qantas’ decision to work with Emirates.
“The world has changed since 1995 when the joint business started. This is a small part of our overall network and this move fits in with changes in our global strategy.
“Asia has become a key market focus for IAG and we’re talking to a number of airlines about alternative options for us.
“Qantas has made it clear that its international performance has been weak and the termination of the joint business won’t have any negative impact on IAG’s financial targets.”
Qantas announced that “underperforming” flights to Frankfurt will be dropped.
Sourced from Travel Weekly
By Rob Gill
Qantas has admitted that it is in discussions with other airlines including Emirates about “potential alliances”.
The Australian carrier was responding to local media speculation about a possible deal with the Dubai-based airline. Qantas’ shares rose by around 10 per cent following the news.
“Qantas today confirmed it is in discussions with a number of airlines about potential alliances. These airlines include Emirates, among others,” said Qantas in a statement.
“At any one time Qantas may be in contact with a wide range of companies about potential commercial co-operation.
“Qantas’ policy is not to comment on the nature or status of these discussions. Should Qantas have a material announcement to make; it would be disclosed to the market in the normal way at the appropriate time.”
Emirates said in a statement: “Emirates does not comment on rumour or speculation.”
Emirates’ regional rival Etihad, based in neighbouring Abu Dhabi, was last week given permission to double its shareholding in Qantas’ competitor Virgin Australia to 10 per cent. This move has been seen as putting more pressure on Qantas to find a merger partner.
Sourced by ABTN