Wirraway
24th Apr 2003, 00:57
Thurs "The Australian"
Qantas pulls in its wings
By Steve Creedy and Claire Harvey
April 24, 2003
QANTAS is expected to delay new aircraft orders because of severe acute respiratory syndrome – a move it says could affect its flying schedule for the next 18 months.
Other airlines are also suffering from the SARS breakout, with Air New Zealand slashing its earnings forecast by 13 per cent to NZ$200 million ($180 million) and cancelling some flights to Japan, Hong Kong and the US.
Hong Kong's Cathay Pacific and Singapore Airlines are believed to be looking at parking aircraft in Australia. Cathay apparently wants to park 20 of its Airbus aircraft at Victoria's Avalon Airport and Singapore is looking for a home for at least four 747-400s.
Singapore has slashed almost 20 per cent of its capacity because of SARS and said yesterday it would retire its fleet of Airbus A340 airlines five months early. Cathay has suspended about 45 per cent of its flights.
Qantas said yesterday it would talk to Airbus about delaying delivery of nine A330 aircraft because it now believes capacity cuts already announced will now last longer than first anticipated.
"Obviously the SARS crisis is deeper and longer than what we anticipated and there doesn't seem to be an end in sight at this stage," chief financial officer Peter Gregg said.
"While we aren't seeing any further declines in booking intakes obviously the . . . levels are quite low in comparison to what we had planned."
Mr Gregg said the airline was also looking at retiring older Boeing 767-200 and 747-300 aircraft but that it could turn out cheaper for the airline to keep them flying.
This particularly applied to the 747s, which were undergoing a $100 million upgrade.
"It would seem nonsensical to take them out of flying at this stage, having spent so much money on them, so deferred deliveries is probably a more appropriate thing," he said.
Qantas has cut its flights by about 12 per cent, with some routes down as much as 20 per cent, and has announced it will axe 1400 jobs.
Low-cost subsidiary Australian Airlines has also announced the suspension of its Cairns-Taipei flights and two of three weekly Cairns- Hong Kong services.
Mr Gregg said it was difficult to say whether Qantas would need to further reduce capacity, but it was more likely to be a case of existing cuts lasting longer.
Asked about the airline's deal with Air NZ, Mr Gregg said he and chief executive Geoff Dixon had met with Air NZ chief Ralph Norris. Mr Gregg said the NZ Commerce Commission had identified several areas to be addressed that the airlines believed they could work on.
Mr Norris said yesterday the global aviation industry was "extremely volatile", with more cancellations possible if passengers begin cancelling flights later in the year.
"These booking cancellations may result in short-term consolidation of flying to some markets and further cancellation of flights," he said.
Mr Norris said the SARS outbreak meant fewer travellers from Asia, and other travellers stopping over in the US rather than traditional hubs like Singapore or Hong Kong.
==========================================
Thurs "The Australian"
How SARS could lift Qantas fortunes
by Mark Westfield
April 24, 2003
THE SARS virus that health authorities are battling in the Asia-Pacific region is proving to be a double-edged sword for Australia's listed airline Qantas.
The carrier will probably emerge as the world's largest capitalised airline as a result of the crisis which threatens to cripple Asia-based airlines Singapore and Cathay Pacific. Regional travel has collapsed as a result of fear of contracting the mysterious virus.
Qantas chief executive Geoff Dixon has decided to cut flights from Australia to Hong Kong by a whopping 40 per cent in anticipation of a dramatic fall in business out of the former colony, but has the luxury of an offsetting lift in Australian domestic tourism.
Roughly 20 per cent of Australians travelling overseas have cancelled or postponed their trips and most of these are expected to opt for a domestic trip instead.
As Qantas has about 75 per cent of the domestic market, any loss of offshore business – where it holds about 40 per cent of the outgoing traffic – will be largely offset by an increase in internal business.
Cathay Pacific and Singapore have no such buffer. They are entirely international airlines and are fully exposed to the severe downturn in travel caused by fear of contracting SARS in Asia, where it is most prevalent.
Since China "came out" this week to admit it had a problem with SARS, the official toll is 2158 cases in China with 97 deaths; 1434 in Hong Kong with 99 deaths reported; and then a drop to Singapore with 186 cases and 16 deaths.
The virus is nowhere near as severe as the occasional flu viruses which race around the globe killing up to 1500 people, but SARS is so feared because authorities are still unsure how it is transmitted and have not developed a cure.
Australia's main contact to date, given that it has only three reported cases and thankfully no deaths from this potentially devastating virus, is primarily through its international carrier and major operator in the Asian region, Qantas.
Unlike purely international carriers Cathay and Singapore, Qantas has a domestic business accounting for about 43 per cent of its earnings before interest and tax. The sudden, sharp impact of SARS on international traffic inevitably will result in an increase in domestic business for Qantas, but the ratio of international cancellations to take-up of domestic travel is still uncertain.
One thing that is certain is that Qantas in a troubled market will emerge in a more powerful position vis-a-vis main rivals Cathay and Singapore. It will also strengthen its efforts to strike an alliance with its nearest international competitor, Air New Zealand.
Despite the pure economic interpretation taken by outgoing Australian Competition and Consumer Commission chairman Allan Fels in rejecting the alliance, the reality of the international airline business is that Qantas either does this deal, or Air New Zealand collapses.
As the parties this time applied for authorisation rather than the strict interpretation of the Trade Practices Act that Fels delivered them, Qantas and Air New Zealand deserve a balanced assessment rather than a textbook lecture.
The reality is that the international airline business will be turbulent for years to come. How can Fels be so sure that the pretext on which he knocked back the Qantas-Air New Zealand union – that SARS and the falling traffic post-September 11 which is bankrupting several US and European airlines was a temporary glitch – is legitimate?
How in the heck would he know? In fact, he has no idea.
The world will not stop spinning on its axis because Fels makes a bad decision. As costly as the consequences of his ill-formed decision may be, it will only deliver to Qantas what it sought in the first place.
===========================================
PIC: Qantas 767-200 VH-EAJ on finals to rwy 01 BNE.
http://www.jetphotos.net/viewphoto.php?id=67395
Photo: Wirraway
===========================================
Qantas pulls in its wings
By Steve Creedy and Claire Harvey
April 24, 2003
QANTAS is expected to delay new aircraft orders because of severe acute respiratory syndrome – a move it says could affect its flying schedule for the next 18 months.
Other airlines are also suffering from the SARS breakout, with Air New Zealand slashing its earnings forecast by 13 per cent to NZ$200 million ($180 million) and cancelling some flights to Japan, Hong Kong and the US.
Hong Kong's Cathay Pacific and Singapore Airlines are believed to be looking at parking aircraft in Australia. Cathay apparently wants to park 20 of its Airbus aircraft at Victoria's Avalon Airport and Singapore is looking for a home for at least four 747-400s.
Singapore has slashed almost 20 per cent of its capacity because of SARS and said yesterday it would retire its fleet of Airbus A340 airlines five months early. Cathay has suspended about 45 per cent of its flights.
Qantas said yesterday it would talk to Airbus about delaying delivery of nine A330 aircraft because it now believes capacity cuts already announced will now last longer than first anticipated.
"Obviously the SARS crisis is deeper and longer than what we anticipated and there doesn't seem to be an end in sight at this stage," chief financial officer Peter Gregg said.
"While we aren't seeing any further declines in booking intakes obviously the . . . levels are quite low in comparison to what we had planned."
Mr Gregg said the airline was also looking at retiring older Boeing 767-200 and 747-300 aircraft but that it could turn out cheaper for the airline to keep them flying.
This particularly applied to the 747s, which were undergoing a $100 million upgrade.
"It would seem nonsensical to take them out of flying at this stage, having spent so much money on them, so deferred deliveries is probably a more appropriate thing," he said.
Qantas has cut its flights by about 12 per cent, with some routes down as much as 20 per cent, and has announced it will axe 1400 jobs.
Low-cost subsidiary Australian Airlines has also announced the suspension of its Cairns-Taipei flights and two of three weekly Cairns- Hong Kong services.
Mr Gregg said it was difficult to say whether Qantas would need to further reduce capacity, but it was more likely to be a case of existing cuts lasting longer.
Asked about the airline's deal with Air NZ, Mr Gregg said he and chief executive Geoff Dixon had met with Air NZ chief Ralph Norris. Mr Gregg said the NZ Commerce Commission had identified several areas to be addressed that the airlines believed they could work on.
Mr Norris said yesterday the global aviation industry was "extremely volatile", with more cancellations possible if passengers begin cancelling flights later in the year.
"These booking cancellations may result in short-term consolidation of flying to some markets and further cancellation of flights," he said.
Mr Norris said the SARS outbreak meant fewer travellers from Asia, and other travellers stopping over in the US rather than traditional hubs like Singapore or Hong Kong.
==========================================
Thurs "The Australian"
How SARS could lift Qantas fortunes
by Mark Westfield
April 24, 2003
THE SARS virus that health authorities are battling in the Asia-Pacific region is proving to be a double-edged sword for Australia's listed airline Qantas.
The carrier will probably emerge as the world's largest capitalised airline as a result of the crisis which threatens to cripple Asia-based airlines Singapore and Cathay Pacific. Regional travel has collapsed as a result of fear of contracting the mysterious virus.
Qantas chief executive Geoff Dixon has decided to cut flights from Australia to Hong Kong by a whopping 40 per cent in anticipation of a dramatic fall in business out of the former colony, but has the luxury of an offsetting lift in Australian domestic tourism.
Roughly 20 per cent of Australians travelling overseas have cancelled or postponed their trips and most of these are expected to opt for a domestic trip instead.
As Qantas has about 75 per cent of the domestic market, any loss of offshore business – where it holds about 40 per cent of the outgoing traffic – will be largely offset by an increase in internal business.
Cathay Pacific and Singapore have no such buffer. They are entirely international airlines and are fully exposed to the severe downturn in travel caused by fear of contracting SARS in Asia, where it is most prevalent.
Since China "came out" this week to admit it had a problem with SARS, the official toll is 2158 cases in China with 97 deaths; 1434 in Hong Kong with 99 deaths reported; and then a drop to Singapore with 186 cases and 16 deaths.
The virus is nowhere near as severe as the occasional flu viruses which race around the globe killing up to 1500 people, but SARS is so feared because authorities are still unsure how it is transmitted and have not developed a cure.
Australia's main contact to date, given that it has only three reported cases and thankfully no deaths from this potentially devastating virus, is primarily through its international carrier and major operator in the Asian region, Qantas.
Unlike purely international carriers Cathay and Singapore, Qantas has a domestic business accounting for about 43 per cent of its earnings before interest and tax. The sudden, sharp impact of SARS on international traffic inevitably will result in an increase in domestic business for Qantas, but the ratio of international cancellations to take-up of domestic travel is still uncertain.
One thing that is certain is that Qantas in a troubled market will emerge in a more powerful position vis-a-vis main rivals Cathay and Singapore. It will also strengthen its efforts to strike an alliance with its nearest international competitor, Air New Zealand.
Despite the pure economic interpretation taken by outgoing Australian Competition and Consumer Commission chairman Allan Fels in rejecting the alliance, the reality of the international airline business is that Qantas either does this deal, or Air New Zealand collapses.
As the parties this time applied for authorisation rather than the strict interpretation of the Trade Practices Act that Fels delivered them, Qantas and Air New Zealand deserve a balanced assessment rather than a textbook lecture.
The reality is that the international airline business will be turbulent for years to come. How can Fels be so sure that the pretext on which he knocked back the Qantas-Air New Zealand union – that SARS and the falling traffic post-September 11 which is bankrupting several US and European airlines was a temporary glitch – is legitimate?
How in the heck would he know? In fact, he has no idea.
The world will not stop spinning on its axis because Fels makes a bad decision. As costly as the consequences of his ill-formed decision may be, it will only deliver to Qantas what it sought in the first place.
===========================================
PIC: Qantas 767-200 VH-EAJ on finals to rwy 01 BNE.
http://www.jetphotos.net/viewphoto.php?id=67395
Photo: Wirraway
===========================================