Shlonghaul
9th Sep 2009, 01:16
Steve Creedy, Aviation writer | September 09, 2009
Article from: The Australian
QANTAS has confirmed it is in talks with the Fijian government to sell its 46 per cent stake in Air Pacific as it lobbies for capacity to introduce Jetstar flights to the holiday island.
The airline, which is competing with Virgin Blue for seats on the route, admitted it was looking at the potential sale in a submission to the International Air Services Commission, arguing the case for its low-cost subsidiary.
The proposal stemmed from a review of its investments in light of the global financial crisis.
Qantas spokesman David Epstein confirmed last night that the Air Pacific stake was under review and that the airline was in discussions with the Fijian government about possible terms.
"While that's at very early stages, we can now confirm that the continuation of the shareholding is formally under review," he said.
Mr Epstein said talks with the Fijian government had mapped out a possible way forward but there would need to be agreement on valuation procedures before there was a commercial conversation.
This included maintaining commercial arrangements with the Fijian flag-carrier.
It is understood the Fijian government is favourably disposed to the idea of Qantas exiting its stake to allow it to take complete control of the carrier and remove vetoes the Australians have on some decisions.
But it is unclear how the Fijian carrier has fared in the global downturn and after crippling floods earlier this year. The latest available profit appears to be the record $F38.2 million posted in 2007-08.
Qantas brought forward its plans to introduce Jetstar on the route after Virgin Blue applied for an additional 1260 seats and to transfer another 1260 from Pacific Blue to allow it to operate V Australia's 360-seat Boeing 777-300ERs on the route.
The IASC asked for further submissions after Qantas applied for almost 1500 seats on the route. It told the airlines they were applying for the same capacity and to justify their applications on public benefit grounds.
Jetstar plans to start daily services between Sydney and Nadi using 213-seat Airbus A321 aircraft from next April.
Qantas wants to codeshare with Jetstar services on the route and to continue codesharing with Air Pacific.
However, there will be no codeshare between Jetstar and Air Pacific and the low-cost carrier will operate independently of other carriers on the route.
Virgin wants to fly the 777s to Nadi as part of moves to work the widebody jets harder.
The daily service would allow a plane that currently spends 12 hours on the ground in Sydney between flights to the US to be used on the nine-hour return trip to Fiji.
Virgin says this type of incremental flying needs only to recover its direct operating cost and it expects the B777 to generate a higher average ticket price than its smaller B737s by attracting upmarket passengers whom the airline has not previously served.
Article from: The Australian
QANTAS has confirmed it is in talks with the Fijian government to sell its 46 per cent stake in Air Pacific as it lobbies for capacity to introduce Jetstar flights to the holiday island.
The airline, which is competing with Virgin Blue for seats on the route, admitted it was looking at the potential sale in a submission to the International Air Services Commission, arguing the case for its low-cost subsidiary.
The proposal stemmed from a review of its investments in light of the global financial crisis.
Qantas spokesman David Epstein confirmed last night that the Air Pacific stake was under review and that the airline was in discussions with the Fijian government about possible terms.
"While that's at very early stages, we can now confirm that the continuation of the shareholding is formally under review," he said.
Mr Epstein said talks with the Fijian government had mapped out a possible way forward but there would need to be agreement on valuation procedures before there was a commercial conversation.
This included maintaining commercial arrangements with the Fijian flag-carrier.
It is understood the Fijian government is favourably disposed to the idea of Qantas exiting its stake to allow it to take complete control of the carrier and remove vetoes the Australians have on some decisions.
But it is unclear how the Fijian carrier has fared in the global downturn and after crippling floods earlier this year. The latest available profit appears to be the record $F38.2 million posted in 2007-08.
Qantas brought forward its plans to introduce Jetstar on the route after Virgin Blue applied for an additional 1260 seats and to transfer another 1260 from Pacific Blue to allow it to operate V Australia's 360-seat Boeing 777-300ERs on the route.
The IASC asked for further submissions after Qantas applied for almost 1500 seats on the route. It told the airlines they were applying for the same capacity and to justify their applications on public benefit grounds.
Jetstar plans to start daily services between Sydney and Nadi using 213-seat Airbus A321 aircraft from next April.
Qantas wants to codeshare with Jetstar services on the route and to continue codesharing with Air Pacific.
However, there will be no codeshare between Jetstar and Air Pacific and the low-cost carrier will operate independently of other carriers on the route.
Virgin wants to fly the 777s to Nadi as part of moves to work the widebody jets harder.
The daily service would allow a plane that currently spends 12 hours on the ground in Sydney between flights to the US to be used on the nine-hour return trip to Fiji.
Virgin says this type of incremental flying needs only to recover its direct operating cost and it expects the B777 to generate a higher average ticket price than its smaller B737s by attracting upmarket passengers whom the airline has not previously served.