Wirraway
25th Aug 2002, 17:53
Mon "The Australian" 26/8/02
Qantas targets sick US carriers
By Andrew Dodd
August 26, 2002
CASHED-UP Australian airline Qantas is planning a raid on the financially stricken US aviation market if that country's foreign investment rules are relaxed.
Qantas chairman Margaret Jackson believes opportunities may develop for the Australian carrier if stringent regulations restricting foreign ownership are relaxed to inject cash into struggling US airlines. Yesterday she told the ABC's Inside Business: "There may be opportunities that emerge that have never existed for an Australian airline."
Under current US law, foreign-owned airlines are not allowed to compete in the domestic market.
However, since the September 11 terrorist attacks on Washington and New York, an already struggling US aviation industry has plunged into deep depression. In the past year, US aviation has lost an estimated $US7.2 billion ($13.3 billion) and similar losses are expected over the next year despite US federal Government aid for the industry totalling over $US4 billion.
Several US carriers are reeling in the face of low consumer demand and cheap airfares.
US Airways filed for chapter 11 bankruptcy on August 11 and United Airlines may follow suit later this year if it fails to meet a debt repayment of $US875 million.
Industry insiders believe Washington might relax its ban on foreign ownership in order to bring fresh capital into the aviation business.
Qantas is one of the world's few financially healthy airlines. It last week announced a $428 million net profit and launched an $800 million capital raising to help it buy new aircraft.
Chief executive officer Geoff Dixon yesterday told the Nine Network's Business Sunday program that Qantas would be on track for another record profit next year if it kept up the momentum of 2001-02.
"We don't have to do much more than we've already done to get a record result," he said.
Qantas has bucked international trends by benefiting from the shake-up of the global industry following September 11. The collapse of Ansett has driven the company's success on domestic routes where it has increased market share despite the arrival of Virgin Blue as a viable competitor.
Now midway through an already oversubscribed $800 million capital raising, Qantas is set to complete its fleet upgrade and perhaps follow through with the purchase of a minority stake in Air New Zealand if regulatory hassles can be sorted out.
"If there's a good enough deal there and if it can get over the various impediments it will be done, if it's not, we'll just get on with our lives," Mr Dixon said.
Mr Dixon claimed Air NZ was neither the number one priority for Qantas nor the main reason for its capital raising.
"We are in discussions with Air NZ that will really depend on what sort of case we can make for the regulatory authorities and also whether the board and senior management and chief executive and chairman of Air NZ want to do this deal," he said.
If the Air NZ deal falls through and the US becomes too risky, Qantas has an eye on other international markets.
Ms Jackson said: "Asia is of great importance to us and we will be watching for opportunities that will exist in Asia and likewise Europe."
Qantas targets sick US carriers
By Andrew Dodd
August 26, 2002
CASHED-UP Australian airline Qantas is planning a raid on the financially stricken US aviation market if that country's foreign investment rules are relaxed.
Qantas chairman Margaret Jackson believes opportunities may develop for the Australian carrier if stringent regulations restricting foreign ownership are relaxed to inject cash into struggling US airlines. Yesterday she told the ABC's Inside Business: "There may be opportunities that emerge that have never existed for an Australian airline."
Under current US law, foreign-owned airlines are not allowed to compete in the domestic market.
However, since the September 11 terrorist attacks on Washington and New York, an already struggling US aviation industry has plunged into deep depression. In the past year, US aviation has lost an estimated $US7.2 billion ($13.3 billion) and similar losses are expected over the next year despite US federal Government aid for the industry totalling over $US4 billion.
Several US carriers are reeling in the face of low consumer demand and cheap airfares.
US Airways filed for chapter 11 bankruptcy on August 11 and United Airlines may follow suit later this year if it fails to meet a debt repayment of $US875 million.
Industry insiders believe Washington might relax its ban on foreign ownership in order to bring fresh capital into the aviation business.
Qantas is one of the world's few financially healthy airlines. It last week announced a $428 million net profit and launched an $800 million capital raising to help it buy new aircraft.
Chief executive officer Geoff Dixon yesterday told the Nine Network's Business Sunday program that Qantas would be on track for another record profit next year if it kept up the momentum of 2001-02.
"We don't have to do much more than we've already done to get a record result," he said.
Qantas has bucked international trends by benefiting from the shake-up of the global industry following September 11. The collapse of Ansett has driven the company's success on domestic routes where it has increased market share despite the arrival of Virgin Blue as a viable competitor.
Now midway through an already oversubscribed $800 million capital raising, Qantas is set to complete its fleet upgrade and perhaps follow through with the purchase of a minority stake in Air New Zealand if regulatory hassles can be sorted out.
"If there's a good enough deal there and if it can get over the various impediments it will be done, if it's not, we'll just get on with our lives," Mr Dixon said.
Mr Dixon claimed Air NZ was neither the number one priority for Qantas nor the main reason for its capital raising.
"We are in discussions with Air NZ that will really depend on what sort of case we can make for the regulatory authorities and also whether the board and senior management and chief executive and chairman of Air NZ want to do this deal," he said.
If the Air NZ deal falls through and the US becomes too risky, Qantas has an eye on other international markets.
Ms Jackson said: "Asia is of great importance to us and we will be watching for opportunities that will exist in Asia and likewise Europe."