Airline News
Herald Tribune: Accidents, Stike & Outsourcing damages Qantas brand
From: International Herald Tribune (more at: www.iht.com) Posted Oct. 18, 2008
It has been a tough year for Qantas Airways. A string of high-altitude scares combined with a protracted labor dispute have battered
the airline's reputation. Union leaders claim that Qantas is putting cost-cutting measures ahead of safety. In the most recent incident,
on Oct. 7, around 40 people were hospitalized, 14 with serious injuries, when a Qantas flight bound for the western Australian city of
Perth plunged 650 feet, or 200 meters, in 20 seconds, hurling unrestrained passengers around the cabin. The Airbus A330-300 flight
from Singapore was forced to make an emergency landing at a remote air strip near Exmouth, where dozens of passengers were
treated for cuts, broken bones and spinal injuries. Qantas rushed to contain the damage by offering travel vouchers and ticket
refunds to all onboard, as well as paying medical expenses for injured passengers. The incident is the latest public relations
headache for Qantas, which has been troubled by safety woes in recent months during a noisy dispute with its unionized work force
over plans to send jobs overseas.
The airline says it needs to outsource more jobs in order to stay competitive as fuel prices rise. "When you start outsourcing, you lose
control," said Dave Oliver, the national head of the Australian Manufacturing Workers Union. "In the airline industry, when you lose
control it may have implications for safety. "In a separate dispute over pay, the union staged an overtime ban in June that delayed
and canceled dozens of Qantas flights, angering passengers and costing the airline millions of dollars. The union has refused to rule
out further action next year if Qantas ignores its calls to keep most of its 5,600 maintenance jobs on Australian shores. Qantas has
acknowledged that the labor dispute has damaged its brand, particularly among frequent fliers affected by the industrial action in
June. Qantas is Australia's largest airline and enjoys a virtual monopoly on the lucrative trans-Pacific route from Australia to the
United States, making it one of the world's most profitable carriers.
Qantas shares collapses to only $1.90 (67% plunge)
From: The Boston Globe (more at: www.boston.com) Posted Oct. 17, 2008
After being offered $11 billion in 2007 for the company, the market capitalization of Qantas has now fallen to less then 3.7 billion.
Shareholders that were told to reject the buyout plan last summer has lost 67% of their money in a company that currently enjoys junk
status as a 'penny stock'. Inside rumors has it that the company's CEO Geoff Dixon is expected to be forced out by the company's
board as soon as early January next year.
Qantas: Price increases likely - Domestic Seat Utilization drops 4.4%
From: The Herald Sum (more at: heraldsun.com.au) Posted April 25, 2008.
Derek Sadubin told BusinessDaily that Qantas has reported reductions in domestic/short-haul yields in February and March. In
seeking to defend its 65 per cent stake in the Australian domestic market, Qantas had increased capacity across the network in
February. These double-digit increases has cut the Qantas group's domestic yield by an estimated 4.4 per cent, he said. Meanwhile,
Peter Gregg, Qantas chief financial officer, has admitted his airline's trading position could worsen after June 30 if fuel continues to
trade above $US100 a barrel. BusinessDaily learned that Qantas managers believe a ticket price rise is preferable to imposing yet
another unpopular oil surcharge on travellers.
Qantas charge Perth-Brisbane business travelers 700% more
Posted by: wearytraveller (notmyqantas.com) Posted April 23, 2008
What is going on!! No wonder Qantas is looking down the barrel of a record profit. Normal fare from Perth to Brisbane on a Sunday
afternoon is between $275 and $350 but today it is nearly $2,000 and the economy fare, in surely must be a first, is dearer than the
business fare.
Australian Gov.: Qantas price Fixing Worse than believed
From: Brisbane Times (brisbanetimes.com.au) Posted April, 16, 2008
Investigators believed an illegal air freight cartel allegedly conducted by "numerous" airlines began five years earlier than previously
thought. Their preliminary inquiries found that a cartel between competing airlines run via telephone conversations, emails and
meetings began from at least 1995. Documents detailing a secret two-year investigation into widespread collusion could be used in
legal action already under way against airlines including Qantas, substantially increasing the damages sought. That action is based
on collusion between 2000 and 2006, but recently released court documents show the consumer watchdog believed carriers were
fixing prices for general freight rates at least five years earlier. "It appears that, from at least 1995, and continuing at various periods
until 2006, some international air cargo carriers may have agreed to fix the prices for, or the methodology for, arriving at various
surcharges and general rates," an Australian Competition and Consumer Commission document on October 31 states. The price-
fixing also relates to security surcharges that airlines imposed after the September 11, 2001, terrorist attacks in the US and war-risk
surcharges arising from the US invasion of Iraq in 2003. Qantas has [already] been fined $US61 million in the US after admitting to
illegally fixing its freight rates. Lawyers Maurice Blackburn launched a $200 million class action in February last year against Qantas
and five other carriers for allegedly fixing cargo rates. The ACCC's highly secretive investigation, which began in February 2006 into
more than 40 airlines, has come to light during a legal battle between the regulator and Korean Airlines.
Qantas relauches Failed frequent flier program
From: The Australian (theaustralian.news.com.au) Posted April 11, 2008
QANTAS has placed the advertising account for its frequent flyer loyalty program out to pitch ahead of an extensive relaunch later
this year. The account, which has resided with M&C Saatchi for a number of years, is understood to be worth several million dollars.
Qantas plans to relaunch its frequent flyer program later this year, creating a two-tiered system that will allow members to use points,
as they did traditionally, to book seats reserved for the frequent flyer program, or use more points to book any seat on any flight
[expect more to need twice as many miles to get access to summer, weekend or holiday travel]. Qantas presently has more than five
million members of its frequent flyer club and estimates have suggested it generates a pre-tax profit of more than $100 million from
selling non-flight rewards alone.
Australian Government force Qantas to improve Frequent Flier Program.
From: Victoria Government (www.consumer.vic.gov.au) Posted Mar. 18, 2008
Qantas has agreed to change the terms and conditions of its frequent flyer program following in-depth discussions with Consumer
Affairs Victoria (CAV). The Australian Minister for Consumer Affairs, Tony Robinson, stated "The changes ensure the Qantas
Frequent Flyer program complies with Victoria's unfair contract terms legislation," Mr Robinson said. CAV has negotiated several
changes to the Qantas Frequent Flyer terms and conditions including: Improvement in notification to consumers when there are
changes to the program's terms and conditions, and true disclosures including liability and consumer protection legislation, clearer
expression of terms and conditions [that used to be hidden].
Toilets Overflowing and Stinking Planes
From: Sydney Morning Herald. P. Gavan, January, 16, 2008 (www.smh.com.au)
I find flushing the toilet on aeroplanes disconcerting as it seems to me they have enough suction to pull your brains out through your
ears. What is more disconcerting, however, is if nothing happens when you flush. No roaring evacuation of gases, liquids and solids;
no suck and gurgle; not even a click from the little silver lever - failure to launch. ......Yet our return leg with the Great Australian
Airline deteriorated into a putrid germ-fest of clogged toilets overflowing with excrement while the drinks cart continued to trundle
down aisles of discomforted, cross-legged passengers. "Tea or coffee?" the stewardess offered. "But perhaps," she hedged, "if you
can't hold on you'd be better off not to drink." Many passengers continued to drink, however, either to reduce the possibility of deep-
vein thrombosis or to anaesthetise themselves against the stench and mental image of layers of waste, a septic strudel swimming in
urine. One by one the plane's loos went on strike until every toilet was out of order. We held our noses and did our business "outback
dunny style", one atop the other, while the level rose towards the rim. Our stewards battled on, layering paper towels over spills. We
tried not to think that the same hands were serving our meals. The flight staff believed the waste tanks hadn't been properly emptied
in Hawaii. The pilot apologised but things worsened until, with a sweeping turn, we approached Sydney and there was a collective
gasp from passengers imagining a waterfall of human waste. Is our experience symptomatic of a malaise in attitude and hardware? If
toilets aren't working what else might fail in-flight? We discovered Qantas is in denial about customer complaints. No problem had yet
been reported by our pilot. Has a corporate culture evolved of ignoring difficult (and costly) problems? For Qantas to preserve its
reputation as a premier airline the first step is to take customer feedback - and unblock the toilets!
Qantas to Raise fares, Suspend share buyback program
From: The International Herald Tribune (more at: iht.com) Posted April, 30, 2008
Australian national carrier Qantas announced Monday it will raise international and domestic airfares by at least 3 percent and
suspend its share buyback program because of rising fuel prices. Fares on international flights will rise about 3 percent and domestic
airfares would rise 3.5 percent, effective May 9, Qantas said in a statement. "An increase in base fares is now necessary to partially
bridge the widening gap between the actual increase in the cost of fuel and the amount we offset through surcharges or non-fuel cost
improvements," chief executive Geoff Dixon said. He said the company viewed it as prudent to suspend its share buyback program.
Qantas cuts back Charity gifts to save Money
More at: Asia Travel Tips (asiatraveltips.com) Posted April 25, 2008
To save money, Qantas has established the Qantas Foundation, to consolidate the airline's charitable activities. Today Qantas
supports many organizations and local initiatives. Under the new foundation, only $5 million will be made available next year (0.03 %
of this year’s revenues). The money is further divided by four sub-funds: the Art Encouragement Fund, the Environmental
Sustainability Fund, the Humanitarian Fund and the General Fund for other charitable purposes. Many awards will not be cash, but
instead be limited “free travel” to one artist from each state to support future work. While accurate numbers of this years donations is
not published by Qantas, many believe this is overall a substantial cut-back over current activities.
Virgin forces Qantas to temporary lower prices
From: Business Day (businessday.com.au) Posted April 23, 2008
Qantas has temporary matched the lower fares of Virgin Blue's long-haul offshoot, V Australia. The cheaper fares come less than two
weeks after V Australia announced it would begin daily flights between Sydney and Los Angeles on December 15. Virgin boasted at
the time that it would undercut Qantas by 16 per cent. A Shaw Stockbroking analyst, Brent Mitchell, said he was surprised at Qantas's
lower fares because the airline had emphasized the high passenger demand on the trans-Pacific route. "It's probably more
promotional to ensure that they keep the load factors high," he said. A Virgin Blue spokeswoman said the carrier was not surprised by
Qantas's new fares "as they did pretty much as we predicted".
Qantas shares Collapse – another 4% drop
From: The Australian (more: www.theaustralian.news.com.au) Posted April 16, 2008
Qantas saw the flying kangaroo's shares fall almost 4 per cent, from $3.80 to $3.65. Qantas is facing tougher times as competition on
the domestic market rises due to an influx of new planes, while demand in the leisure end softens. This is combining with record fuel
prices in what one senior airline executive has described as a "perfect storm".
More Delays Announced - Qantas stuck with Old planes
From: The Australian (www.theaustralian.news.com.au) Posted: April 9, 2008
QANTAS will have to revise its international expansion and fleet renewal plans because of further delays in the delivery of its new
Boeing 787s. Boeing is expected to announce another delay in the troubled program at a briefing as early as tomorrow, Sydney time.
The first 787 has yet to fly and the project has been plagued by shortages of parts and incomplete "travelled work" -- work that should
have been done by suppliers before components reached Seattle for final assembly but wasn't. Qantas, the world's biggest airline
customer for the 787 with 65 on order, was originally due to get the plane in August but this was pushed back to May next year by two
previous delays. US analysts are now suggesting the first plane may not be delivered to launch customer and the number of aircraft
delivered next year could be reduced from the manufacturer's original commitment of 109 aircraft to between 10 and 45.
Qantas props up falling share price – Buys back another 100,000 shares
From: The Business Spectator, MarketWatch and the Herald Sun (Posted April 4, 2008)
Qantas Airways Ltd bought back 100,000 shares on-market on April 1. Previously Qantas has bought back over 90 million shares,
and there are now only 105 million shares left outstanding. The recent attempt to prop up the falling share price comes on top of the
245,000 shares the company bought on March 3, and the 315,000 shares the company bought back on March 19. Despite these
purchases, the company shares have continued to fall over 23% in the last year. This falling price follows recent news that the
number of international passengers on Qantas also declined by 35,300 passengers, or 4.6% in January. The market capitalization of
the company now stands at only $8 billion, $3 billion less than it was offered in a takeover bid last summer.
35,000 Fewer International Passengers flies Qantas in January
From: Herald Sun (www.news.com.au) Posted April 2, 2008
Qantas carried less international customers in January compared to the corresponding month a year ago, the airline's latest traffic
figures show. International passengers fell by 35,300 passengers, or 4.6 per cent, to 731,000. This resulted in a revenue seat factor
of 80.5 per cent, which was 0.2 percentage points lower than January the previous year.
Qantas stock tumbles - Forced to buy back another 315,000 Shares
Posted Mar. 20, 2008
In an attempt to prop up a free falling share price, Qantas Airways Ltd was forced to buy back 315,000 shares in the market. This is
on top of the 215,000 shares it was forced to buy on March 3rd. Previously a total of 89,480,650 shares have been bought back.
There are only 105,704,350 shares left outstanding. The price of a share has fallen 26% in the last year, and now stands at a mere
$3.71 Australian Dollars and its market capitalization have fallen by more than $3.4 billion.
Qantas Shares drops further - Buys back 245,000 shares
From: The Business Spectator (www.businessspectator.com.au), March 6, 2008
After a 17% drop in share price in the last year to only $4.19 per share, Qantas Airways Ltd bought back 245,011 shares on-market
on March 3, 2008. Previously 87,036,217 shares have been bought back. There are 108,218,772 shares still to be bought back,
giving the airline a tiny market capitalisation of only $8.3 billion and a puny dividend yield of 3.6%. If you invested $1,000 one year
ago, you would have only $823 today.
Qantas Profits propped up by short-term number games?
From: The Travel Mole (www.travelmole.com) March 4, 2008
It appears that the airline may have taken what Harvey World Travel agents described as "one step too fare", by demanding that
Stella Travel Services and all Harvey World Travel and Travelscene American Express agents withdraw from the fuel class action law
suit. Agents who did want to be named fearing potential reprisals that could impact on their business, went on to explain, "Qantas"
arrogance and lack of understanding of the distribution model in Australia is quite amazing and is set to be their downfall." The
agents added, "It is also interesting that QF's May and July outbound passengers are down, yet the airline shows an increase in
profit, which can only come from cost cutting, including slashing agent commission and staffing and the growth of Jetstar." The
agents went on to say that if QF loses this fuel levy class action, case, they will merely continue to try and slash costs and even try to
recover their legal cost from agents with they supposed more cutting of staff, which is now compromising the quality of their service
and damaging their reputation, which quite frankly is already damaged, potentially beyond repair. One said, "I wonder what the
financial world would say and what impact it would have on Qantas' share price if the markets and investors knew or actually really
understood that Geoff Dixon and his team appear to be determined to trash the airline's largest single source of business?" "I reckon
a downward spiral in the share price would result!"
Qantas Sued in US Federal Court for anti-trust
From: Mar. 4, 2008. Federal Docket (http://dockets.justia.com/docket/court-candce/case_no-3:2008cv01140/case_id-200893)
Lori Barrett filed an antitrust suit against Qantas Airways Limited and Air New Zealand Limited on February 26, 2008, in the Federal
California Northern District Court in San Francisco Office where the presiding judge is Judge Edward M. Chen. Interested parties
should reference the file: 3:2008cv01140
Qantas Starts charging more miles for Frequent Flier Tickets
From: News Feb 26, 2008 (www.aussieindolanka.com)
The airline said yesterday it would roll out an "enhanced" frequent-flyer scheme by mid-year. Executives were reluctant to discuss
details. Qantas has been looking at a two-tier system in which people willing to compete for allocated seats… The airline has more
than 5 million frequent flyers and made a pre-tax profit of $62 million from the frequent flier scheme in the six months to December 30.
Chief executive Geoff Dixon noted yesterday that it generated 60 per cent of its revenue outside Qantas and described its growth
prospects as “excellent”.
Qantas leases planes from China despite record profits
From: CNBC News Feb 25, 2008, (www.cnbc.com)
BOC Aviation, the wholly owned aircraft leasing subsidiary of Bank of China, said it has signed agreements with Qantas Airways of
Australia for the lease of eight Airbus A320 passenger jets. The jets will be delivered from Airbus between the third quarter of 2010
and the first quarter of 2011.
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