Recovery Too Far - Qantas....
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Recovery Too Far - Qantas....
Recovery too far: Qantas
By ANDREW FRASER
23nov01
QANTAS estimates the international aviation market -- which provides 78 per cent of its profits -- will remain depressed for the next three years.
Qantas chief executive Geoff Dixon told a business lunch in Brisbane yesterday that the international airline industry was in trouble earlier in the year, but "following September 11, that slow-moving crisis turned into an express train".
Since the terrorist attacks in the US, 250,000 people worldwide had been retrenched from the aviation industry, while the International Air Transport Association estimated that worldwide industry losses for 2001 could rise to as much as $20 billion.
"We estimate the real outcome will be worse than IATA is predicting," Mr Dixon said. "I went to London a fortnight ago and it's clear the travelling public has simply put away its passports and suitcases. With a potent combination of fear and economic downturn, people are staying home."
He said no-one knew how long this crisis will last.
The national carriers of Switzerland and Belgium had already collapsed, while several airlines in the US were restructuring to avoid collapse.
"The impact of all this on Qantas is huge," he said. "The downturn in our markets extend far beyond the US. Japan is down by 25 per cent and the UK by 23 per cent.
"Other markets are similarly affected and overall traffic levels have declined market by market by between 10 and 20 per cent."
Qantas had "reluctantly" cut some of its overseas services and reined in capacity on international routes by 11 per cent.
In response Qantas planned to offer "clearly differentiated services to meet the diverse needs of our customers".
In effect, Qantas would become five airlines -- two at international level, one the current standard of international service and the other a cheaper, no-frills airline flying to new destinations; two at domestic level, with much the same sort of distinction; and one, Qantaslink, servicing regional Australia.
By ANDREW FRASER
23nov01
QANTAS estimates the international aviation market -- which provides 78 per cent of its profits -- will remain depressed for the next three years.
Qantas chief executive Geoff Dixon told a business lunch in Brisbane yesterday that the international airline industry was in trouble earlier in the year, but "following September 11, that slow-moving crisis turned into an express train".
Since the terrorist attacks in the US, 250,000 people worldwide had been retrenched from the aviation industry, while the International Air Transport Association estimated that worldwide industry losses for 2001 could rise to as much as $20 billion.
"We estimate the real outcome will be worse than IATA is predicting," Mr Dixon said. "I went to London a fortnight ago and it's clear the travelling public has simply put away its passports and suitcases. With a potent combination of fear and economic downturn, people are staying home."
He said no-one knew how long this crisis will last.
The national carriers of Switzerland and Belgium had already collapsed, while several airlines in the US were restructuring to avoid collapse.
"The impact of all this on Qantas is huge," he said. "The downturn in our markets extend far beyond the US. Japan is down by 25 per cent and the UK by 23 per cent.
"Other markets are similarly affected and overall traffic levels have declined market by market by between 10 and 20 per cent."
Qantas had "reluctantly" cut some of its overseas services and reined in capacity on international routes by 11 per cent.
In response Qantas planned to offer "clearly differentiated services to meet the diverse needs of our customers".
In effect, Qantas would become five airlines -- two at international level, one the current standard of international service and the other a cheaper, no-frills airline flying to new destinations; two at domestic level, with much the same sort of distinction; and one, Qantaslink, servicing regional Australia.
Nunc est bibendum
Came out of Japan a couple of weeks back and it was every bit as bad as he has said.
Have been bouncing between Singapore and Australia over the last week or so and the loads have been 70-80% all the way.
Obviously, I don't know what the yield is like or what the Europe stuff has been like but there you go.
Stories from the 744 drivers indicate that USA are showing some bigger load factors but we have cut a fair bit of capacity to the US so you would expect the load factors to be improving when you send three aeroplanes a day instead of four or five!
Have been bouncing between Singapore and Australia over the last week or so and the loads have been 70-80% all the way.
Obviously, I don't know what the yield is like or what the Europe stuff has been like but there you go.
Stories from the 744 drivers indicate that USA are showing some bigger load factors but we have cut a fair bit of capacity to the US so you would expect the load factors to be improving when you send three aeroplanes a day instead of four or five!
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Did a London trip a few weeks ago. From memory, the loads up to London were in the mid to high 200s (a little on the light side) but then I went back to Singapore, then back to London, then to Bangkok and Sydney with loads in the mid 300s on each sector. I didn't think that was too bad considering it's almost into the northern winter. 
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TODAY'S BUSINESS
Gloomy forecast hits Qantas
Saturday 24 November 2001
Qantas Airways shares fell more than 2 per cent yesterday after chief executive Geoff Dixon warned that the international market would remain depressed for three years.
In further negative news for the company, British Airways chief executive Rod Eddington stepped down from the Qantas board as a non-executive director.
The British airline - which has a crucial alliance with Qantas - had held the right to appoint three directors to the Qantas board while it owned more than 22.5 per cent of Qantas shares. But Qantas' $450 million capital raising last month diluted BA's stake, meaning BA had to pick one director to leave his seat.
Also hurting investor sentiment towards Qantas was a partial rebound in oil prices overnight, and the increased likelihood of Ansett mark II joining the domestic market for good through the Solomon Lew-Lindsay Fox consortium.
The entrepreneurs have wound back their call for taxpayer funding, reducing Qantas shareholders' hopes of a sell-off of the Ansett remains. A definitive end to Ansett would further fireproof Qantas from the international travel crisis.
Mr Dixon on Thursday painted a bleak picture for international travel, telling a Brisbane luncheon that Qantas would face "commercial oblivion" if it did not lay off staff.
Dickson's analyst Michael Heffernan said these negative remarks had sent Qantas shares falling. But Mr Heffernan suggested Mr Dixon might have been overly dramatic, given that Qantas was trying to pressure the last few unions into agreeing to an 18-month wages freeze.
"He doesn't want to be overly optimistic while he is negotiating with the unions," Mr Heffernan said. "I don't know if it will take three years (to pick up internationally). But it is certainly going to take probably 12 months for the American market to get active again."
Analysts were left wondering why Mr Eddington was the one to give up his board seat - leaving BA's Roger Maynard and Nick Tait to represent the British carrier.
"It is very interesting that he should leave the board, outside the other two," Mr Heffernan said. "As an airline exec, he would have been rated the best in the world."
Mr Heffernan said British Airways might have needed Mr Eddington to focus his energies completely at home.
Well before the downturn accelerated by the September 11 events, strong rumors were circulating that BA was trying to sell its stake in Qantas.
A Qantas spokeswoman would not comment on whether Mr Eddington's departure was a loss to the airline.
However, when Mr Eddington was appointed in January, Qantas said it expected him to make a "significant contribution to Qantas board deliberations".
Formerly the chief executive of Ansett, Mr Eddington was also at the helm of Cathay Pacific for four years.
Qantas shares ended down 10 cents at $4.03 on a volume of 2.2 million.
-AAP
Gloomy forecast hits Qantas
Saturday 24 November 2001
Qantas Airways shares fell more than 2 per cent yesterday after chief executive Geoff Dixon warned that the international market would remain depressed for three years.
In further negative news for the company, British Airways chief executive Rod Eddington stepped down from the Qantas board as a non-executive director.
The British airline - which has a crucial alliance with Qantas - had held the right to appoint three directors to the Qantas board while it owned more than 22.5 per cent of Qantas shares. But Qantas' $450 million capital raising last month diluted BA's stake, meaning BA had to pick one director to leave his seat.
Also hurting investor sentiment towards Qantas was a partial rebound in oil prices overnight, and the increased likelihood of Ansett mark II joining the domestic market for good through the Solomon Lew-Lindsay Fox consortium.
The entrepreneurs have wound back their call for taxpayer funding, reducing Qantas shareholders' hopes of a sell-off of the Ansett remains. A definitive end to Ansett would further fireproof Qantas from the international travel crisis.
Mr Dixon on Thursday painted a bleak picture for international travel, telling a Brisbane luncheon that Qantas would face "commercial oblivion" if it did not lay off staff.
Dickson's analyst Michael Heffernan said these negative remarks had sent Qantas shares falling. But Mr Heffernan suggested Mr Dixon might have been overly dramatic, given that Qantas was trying to pressure the last few unions into agreeing to an 18-month wages freeze.
"He doesn't want to be overly optimistic while he is negotiating with the unions," Mr Heffernan said. "I don't know if it will take three years (to pick up internationally). But it is certainly going to take probably 12 months for the American market to get active again."
Analysts were left wondering why Mr Eddington was the one to give up his board seat - leaving BA's Roger Maynard and Nick Tait to represent the British carrier.
"It is very interesting that he should leave the board, outside the other two," Mr Heffernan said. "As an airline exec, he would have been rated the best in the world."
Mr Heffernan said British Airways might have needed Mr Eddington to focus his energies completely at home.
Well before the downturn accelerated by the September 11 events, strong rumors were circulating that BA was trying to sell its stake in Qantas.
A Qantas spokeswoman would not comment on whether Mr Eddington's departure was a loss to the airline.
However, when Mr Eddington was appointed in January, Qantas said it expected him to make a "significant contribution to Qantas board deliberations".
Formerly the chief executive of Ansett, Mr Eddington was also at the helm of Cathay Pacific for four years.
Qantas shares ended down 10 cents at $4.03 on a volume of 2.2 million.
-AAP
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Oil's well for Qantas
25nov01
SHARES in Australia's largest airline Qantas Airways hit a two-year high after oil prices continued to fall.
Qantas also announced that Impulse Airlines would become a wholly-owned subsidiary after Impulse shareholders exercised an option to sell to the airline.
Analysts said Qantas could fast-track its expansion now that Impulse was under direct control.
But the best news for was the cheaper fuel costs, which sent Qantas shares up 11.4c to $4.22. They later closed at at $4.03.
25nov01
SHARES in Australia's largest airline Qantas Airways hit a two-year high after oil prices continued to fall.
Qantas also announced that Impulse Airlines would become a wholly-owned subsidiary after Impulse shareholders exercised an option to sell to the airline.
Analysts said Qantas could fast-track its expansion now that Impulse was under direct control.
But the best news for was the cheaper fuel costs, which sent Qantas shares up 11.4c to $4.22. They later closed at at $4.03.
