Qantas CEO To Be Grilled At Luncheon
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1126 [Dow Jones] Qantas CEO Geoff Dixon to be quizzed at luncheon in Sydney about its international operations following increasing tensions between U.S. and Iraq. Qantas shares have come under pressure in recent weeks as oil jumps above US$30/barrel on fears of another Gulf War, and on concerns that its underwriters will have to take up a portion of its A$200 million retail offer at A$4.20 a share, which closes on Friday. Qantas shares down 9 cents, or 2.3%, to A$3.75.
Dow Jones
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Dow Jones
SYDNEY (Dow Jones)--Qantas Airways Ltd. chief executive Geoff Dixon said Wednesday that Australia's national carrier is closely watching the troublesome Middle East political and military situation.
"Now we face a real prospect of a major conflict in the Middle East and Qantas obviously will not be immune," Dixon said in a lunch speech to the Australia-Israeli Chamber of Commerce.
Dixon said one buffer for Qantas in the next few months is the company's fuel hedging program that "provides a substantial level of cover at more favorable rates".
He said the aviation sector remains problematic, and Qantas continues to face stiff competition on domestic and international services.
"The global situation is serious. It was clear well before last year that aviation was in trouble. What Sept. 11 did was compound this situation and precipitated the crisis facing many carriers," Dixon said.
Qantas, which remains in talks with Air New Zealand Ltd. (A.AIZ) to buy a stake of about 25% in that carrier, will continue to seek international partnerships, he said.
"Although we will always remain a principally Australian airline, we are going to need to undertake investments overseas and most likely forge new equity partnerships," he said.
Some analysts have also speculated that once the Air NZ deal is completed, Qantas and regional rival Singapore Airlines Ltd. will consider a medium-term partnership.
Dixon said Qantas is also considering spending more money to upgrade its Australian regional operations.
"One of the next important decisions that Qantas will face is a possible A$2 billion re-equipment of the Qantaslink fleet over the next 10 years to sustain and grow regional services," he said.
"We have also, as you may know, embarked on a program of major capital investments," Dixon said.
"We will spend at least A$13 billion over the next 10 years for aircraft, service improvements and information technology and this number could in fact be as high as A$25 billion.
"This will give us not only the leading edge on quality but much greater flexibility and efficiency," Dixon said.
-By Lilly Vitorovich; Dow Jones Newswires;
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1235 [Dow Jones] Comments by Qantas CEO about need for overseas partnerships could rekindle analyst speculation Australia's national carrier might forge an alliance sooner or later with arch rival Singapore Airlines to form regional powerhouse; CEO Geoff Dixon says "we are going to need to undertake investments overseas and most likely forge new equity partnerships". Comments have immediacy for Air NZ talks but infer more could be afoot longer term.
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SYDNEY -(Dow Jones)- Geoff Dixon, chief executive of Australia's Qantas Airways Ltd. , said Wednesday that talks with trans-Tasman rival Air New Zealand Ltd. are continuing.
Qantas is keen to take up to a 25% stake in the New Zealand carrier.
"We are still talking about it," said Dixon, adding that talks between the two companies are cordial.
Questioned at a luncheon in Sydney about his no-frills domestic rival Virgin Blue, Dixon said the carrier has "a good model and a very, very robust future."
The Qantas chief was also quick to say he benchmarks his airline against regional rivals Cathay Pacific Airways Ltd. and Singapore Airlines Ltd.
-By Lilly Vitorovich, Dow Jones Newswires;