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7JetSet7 Code: QAN
Status: Operational
Employees 32979
Web: qantas.com.au
Telephone: +61 (2) 9691 3636
Fax: +61 (2) 9691 3339

Click below for data links:
QAN-2003-05-75 YRS
QAN-2006-06-787 ORDER
QAN-2006-11 85 YRS-A
QAN-2006-11 85 YRS-B
QAN-2006-11 85 YRS-C
QAN-2006-11 85 YRS-D
QAN-2006-11 85 YRS-E
QAN-2006-11 85 YRS-F
QAN-2006-11 85 YRS-G
QAN-2006-11 85 YRS-H
QAN-2006-11 85 YRS-I
QAN-2008-07-A380 DEBUT
QAN-2008-10 INCIDENT A330-303
QAN-2010-01 ADS-B
QAN-2011-01-90 YRS A
QAN-2011-01-90 YRS B
QAN-2011-01-90 YRS C
QAN-2011-01-90 YRS D
QAN-2011-01-90 YRS E
QAN-2011-01-90 YRS F
QAN-2011-01-90 YRS G
QAN-2011-01-90 YRS H
QAN-2011-01-90 YRS I
QAN-2011-01-90 YRS J
QAN-2014-02-737-400 RETIRED
QAN-2014-10 - A330 BUSINESS SUITE.jpg
QAN-2014-10 - A330 ECONOMY SEAT.jpg
QAN-2014-11 - 94TH YR 75TH 737-800
QAN-2015-08 - Premium Economy.jpg
QAN-2015-09 - TOP 10 2015.jpg
QAN-2015-12 - Sydney to SFO-A.jpg
QAN-2015-12 - Sydney to SFO-B.jpg
QAN-2016-02 - TEDxSydney-A.jpg
QAN-2016-02 - TEDxSydney-B.jpg
QAN-2016-05 - A380 LAX Hangar.jpg
QAN-2016-06 - New Livery.jpg
QAN-2017-01 Hop to It Tail.jpg
QAN-2017-08 - World Longest 787 Route.jpg
QAN-2018-03 LHR to Perth.jpg
QAN-Cabin Attendants 2017-07 YY.jpg
QAN-Cabin Attendants 2018-04.jpg
QAN-HKG LOUNGE - 2010-01
QAN-Visit Ayers Rock 2018-10.jpg
QAN-Visit Sydney Harbor 2018-09.jpg





By April 1935, Qantas operated Australia’s first international passenger flight from Brisbane to Singapore, carrying two paying customers on a DH86 aircraft.

Eight decades later Qantas passengers enjoy an international network that services every continent, spanning a network of more than 250 destinations in over 60 countries.







MARCH 1994: 3 747-300'S (RB211-524D4), EX-JAPAN AIRLINES (JAL) DELIVERIES.




MAY 1995: $325 MILLION, 3/1 ORDERS (END OF 1995) 737-400'S & 2/2 ORDERS (1996) 767-300ER'S.















FEBRUARY 1996: 737-476 (PW548, VH-TJX) DELIVERY.


APRIL 1996: TO SHANGHAI & BEIJING (767-300, 228 PAX).


1 737-476 (28151) DELIVERY.



16TH 767-300 (VH-OGP) DELIVERY.

AUGUST 1996: 767-300 (VH-OGQ) DELIVERY (17TH).





NOVEMBER 1996: 1 737-400 DELIVERY.




JUNE 1997: 2 767-338ER'S (CF6-80C2B6) (28724; 28725) DELIVERIES.

JULY 1997: FISCAL YEAR (FY) 1996 = +$196 MILLION (+$143 MILLION) (NET PROFIT) (+2.6%).






+3 ORDERS (FEBRUARY 1999) 747-400'S FOR $475 MILLION. 2 ORDERS (JUNE 1998) 767-300ER'S (CF6-80C2).












FISCAL YEAR (FY) 1997 = +$183 MILLION (+20.7%).

EMPLOYEES (1,000): 5 DLH 58; 6 BAB 53; 7 NWA 48; 8 USA 42; 9 CAL 40; 10 AFA 36; 11 QAN 30; 12 SIA 28; 13 KLM 27; 14 SWA 25.

NET ($MILLION): 13 ACN 308 (109); 14 KLM 303 (-33); 15 SAS 283 (265); 16 ALI 256 (-780); 17 CINTRA 244 (273); 18 SWS 223
(-402); 19 CAT 219 (493); 20 QAN 183; 21 GUN 137 (87).

(RPK) PASSENGER TRAFFIC (BILLION): 5 BAB 106; 6 JAL 77; 7 CAL 66; 8 DLH 71; 9 AFA 70; 10 USA 67; 11 QAN 59; 12 KLM 55; 13 SIA 55; 14 ANA 51.

PASSENGERS (MILLION): 9 DLH 35; 10 BAB 34; 11 JAL 32; 12 KAL 26; 13 ALI 25; 14 TWA 24; 15 SAS 21; 16 QAN 19; 17 AMW 18; 18 JAS 17.

767-338ER (29117) DELIVERY.

EXTENDED TWIN-ENGINE OPERATIONS (ETOPS) FLIGHTS/MONTH (/TOTAL) OVER PACIFIC: 38 737-3/-400 (120 MINUTES = 740 (33,420); 26 767 (180 MINUTES) = 1,022 (128,405).











1997 = +$210.9 MILLION (+$174.8 MILLION).













8 DLH 46.88; 9 AFA 46.35; 10 USA 41.25; 11 SIA 35.88; 12 KLM 35.59; 13 QAN 35.22; 14 ANA 33.38; 15 SWA 31.43; 16 CAT 25.26; 17 TWA 24.42; 18 ACN 23.21; 19 ALI 22.10.




SEPTEMBER 1999: INCDT: 747-438 (RB211-524G/H-T) (807-24806, /90 VH-OJH "City of Darwin") over-runs runway RWY 21L on landing at Bangkok International Airport (BKK), travels a further 200 meters across the run-off area and collides with the RWY 03R Localizer Antenna. The airplane was repaired by Boeing (TBC) and returned to service on April 8th 2000.


747-438B (25564, VH-OJS) DELIVERY.


747-438B DELIVERY.





JANUARY 2000: 747-438 (1239-25566, VH-OJU) DELIVERY.



7 ORDERS (6/00) 767-300ER (RB211-524) (24339), BRITISH AIRWAYS (BAB) LEASED. SOLD 4 A300B4-203F'S (134; 157; 196; 218) TO PINNACLE AIR CARGO, LEASED TO TRANS CONTINENTAL (TCN).




APRIL 2000: 28,226 EMPLOYEES.







1 767-338R (796-30186, VH-OGV) DELIVERY. 1 B AE 146-200 (E2034), EX-BRITISH MIDLAND (BMA), B AE LEASED.

JULY 2000: FY 1999 = +$278.68 Million (+$201.47): 58.13 Billion (RPK) (+2.1%); 73.4%; 16.69 (PAX) (+2%); 23,411 EMPLOYEES.



RPK (PASSENGER TRAFFIC) (B): 1 UAL 201.9; 2 AAL 177.3; 3 DAL 168.6; 4 NWA 119.3; 5 BAB 117.5; 6 CAL 93.4; 7 AFA 83.7; 8 JAL 82.9; 9 DLH 81.4; 10. USA 66.9; 11 SIA 64.5; 12 KLM 58.9; 13 SWA 58.7; 14 QAN 58.1; 15 ANA 56.7.

EMPLOYEES (K): 10 NWA 51.8; 11. CAL 44.1; 12 USA 41.6; 13 IBE 29.1; 14 SWA 27.7; 15 SIA 27.4; 16 KLM 27.3; 17 SAS 25.8; 17 TII 24.1; 18 QAN 23.4; 19 ACN 23; 20 MAS 22.8; 21 IND 22.

NET $ (M): 9 AFA 340; 10 KLM 324; 11 CAT 282; 13 QAN 279; 14 USA 273; 15 KAL 226; 16 SAS 217; 17 AMW 171; 18 ASA 196.








767-336ER (25203), EX-BRITISH AIRWAYS (BAB).




1 ORDER (11/00) 747-436 (24050) (RB211-524H2), BRITISH AIRWAYS (BAB) 17 MONTH LEASED.


6 ORDERS (2/02) 747-400'S LONG RANGE (FORMER 747-400X). 2 767-336ER'S (293-24338, VH-ZXB; 419-25443, VH-ZXG), EX-BRITISH AIRWAYS (BAB). 6 ORDERS (2/02) A330-200 TO REPLACE 767-200'S. 12/6 ORDERS (2/06) A380'S.

DECEMBER 2000: (http://www.qantasfrequentflyer.com).

9 SIA 52.77; 10 SWA 50.48; 11 QAN 49.28; 12 KLM 45.91; 13 CAT 35.26; 14 TWA 33.56.

767-336ER (364-24343, VH-ZXE), EX-BRITISH AIRWAYS (BAB), DELIVERY. 13 ORDERS (2/02) A330-200/-300'S, INCLUDING 7 A330-200'S AND 6 A330-300'S.











JULY 2001: IN 10/01, CAIRNS TO OSAKA (767-300ER, 4X-WEEKLY).

AUGUST 2001: FY 2000 = +$216 MILLION (-19.7%): +10% RPK, +9.3% ASK.


1 737-4L7 (2517-26961, VH-TJW), WET-LEASED TO NORFOLK JET.




1 737-3Q8 (2355-26282, 5W-ILF), EX-POLYNESIAN AIRLINES (PLY), (ILF) LEASED.


737-33A (1654-24030, VH-CZS), EX-ANSETT (ANS). PLANS TO ACCELERATE DELIVERY OF 3 747-400LR'S TO 1ST HALF 2003. WILL PHASE OUT ITS 747SP'S BY 12/01. 2 767-375ER'S (24307; 25120) AND 2 767-38EER'S (25347; 25404), AIR CANADA (ACN)/CANDIAN INTERNATIONAL (CDI) WET-LEASED.






JANUARY 2002: 2001 = 72.35 BILLION RPK (+1.1%); 24.27 MILLION (PAX) (+1.1%).

(TELEPHONE: (2) 96 91 36 36). (FAX: (2) 96 91 32 77).



2002 = +$224.8 Million (+$223.2M): 75.13 Billion RPK (+6.5%); +3.2% ASK; 78.3% LF (+2.4); 1.61 Billion FTK (-13.6%); 33,044 Employees (+4.5%).

1 UAL 116.60; 2 AAL 106.15; 3 DAL 97.60; 4 NWA 73.11; 5 BAB 64.24; 6 AFA 59.54; 7 CAL 58.76; 8 DLH 56.76; 9 JAL 50.77; 10 USA 45.93; 11 SWA 44.50; 12 SIA 42.76; 13 QAN 42.14; 14 ACN 41.49; 15 KLM 35.76; 16 ANA 33.16; 17 CAT 27.81; 18 TII 27.43; 19 IBE 25.64; 20 KAL 23.73; 21 ALI 22.45; 22 MAS 22.29; 23 AMW 19.06; 24 VAA 17.65; 25 VAR 16.02; 26 CHI 16.00; 27 EAD 14.37; 28 SAS 14.26; 29 ANZ 13.54; 30 SAA 12.70; 31 SVA 12.56; 32 BEJ 12.39; 33 ASA 12.23; 34 JAS 10.06; 35 THY 9.35; 36 AMX 8.51; 37 PAL 8.36; 38 GIA 8.15; 39 CMA 7.99; 40 ELA 7.79; 41 GUL 7.65; 42 PIA 7.24; 43 AIN 7.10; 44 TAP 6.43; 45 EGP 5.53; 46 OLY 5.24; 47 AUL 5.06; 48 FIN 4.93; 49 IND 4.52; 50 CQT 4.51.

1ST 3 737-838'S (1042-29551, VH-VXA "YANANYI DREAMING;" 1045-30101, VH-VXB; 1049-28897, VH-VXD) DELIVERIES (ABORIGINAL "YANANYI" MEANS "GOING/TRAVELING"). 2 767-33AER'S (591-27909, /95 24 04, EX-LAUDA AIR (LAL); 643-28495, /97 17 03, EX-CITY BIRD (CBD), ANSETT WORLDWIDE (AWW) LEASED.


2 737-838'S (1063-29552, VH-VXD; 1071-30899, VH-VXE) DELIVERIES. DEFERS ORDERS FOR 3 A330'S.





(TELEPHONE: +61 (2) 9691 3636). (FAX: +61 (2) 9691 3339.

747SP (22495) PARTED OUT.

May 2002: QANTAS (QAN) 2001: +$216.01 Million (+$263.82): 67.89 Billion RPK (+.6%); 75.2% LF; 20.19 Million PAX (-5.3%); 1.57 Billion FTK; 29,217 EMPLOYEES (-.3%).

2001 Top World Airlines by Passenger Traffic (RPK Billion):
1 UAL 187.67; 2 AAL 170.88; 3 DAL 163.66; 4 NWA 117.66; 5 BAB 106.27; 6 CAL 98.37; 7 AFA 94.42; 8 DLH 86.70; 9 JAL 84.27; 10 USA 73.93; 11 SWA 71.59; 12 SIA 69.15; 13 QAN 67.89; 14 ACN 67.03; 15 KLM 57.85; 16 ANA 56.90; 17 CAT 44.79; 18 TII 44.04; 19 IBE 41.30; 20 KAL 38.45; 21 MAS 38.31; 22 ALI 36.52; 23 SWS 32.98; 24 TWA 31.85; 25 AMW 30.69.

Utilizes ex-Ansett (ANS) heavy maintenance, 3-bay hangar facility at Brisbane Airport for 36 767's and leased 110,000 sq m from airport, for start in late 2003.

June 2002: Code share with LanChile (LAN), Sydney to Auckland to Santiago.

Has requested Airbus to provide Head-Up Displays (HUD)s for its A330-200's, which will operate into Category 1 airports in Australia. As the (FBW)-equipped A330-200's are already Category 3B, there has been little interest before now.

Invests # AU$300M to relaunch International Business Class (C), which will including seats which convert to beds. Service will be introduced on flights to London and Hong Kong during 1st half 2003.

2 737-838's (33480, VH-VXJ; 33481, VH-VXK) deliveries.

July 2002: Projects FY 2001 pre-tax = +$316 Million.

August 2002: With OneWorld partners, Iberia Airlines (IBE) and LAN (LAN), plans to add Madrid to Beirut to Denpasar to Sydney (LAN) A340-300 operations).

(FY) 2001 = +# A$428 Million/+$241.18 Million (+3%) (+# A$415.4 Million/+$234.15 Million) (Margaret Jackson Chairwoman stated "the results were encouraging given that the international aviation community lost a collective -$12 Billion in the same period"). These figures were aided by the collapse, last 9/01 of longtime rival, Ansett (ANS), and the failure of discount carrier Impulse Airlines (IMU). Qantas (QAN) now controls 80% of the domestic market, with Virgin Blue (VOZ) holding most of the rest of the 20%.

Selects Rockwell Collins Flight Dynamics head-up guidance system (HGS-4000) for its 737's.

(QAN) recently purchased new Altitude Manpower Planning System (MPP) with the optional Vacation Bidding System, which can project an airline's aircrew (FC) staffing levels over the short and long term, factoring in the variables of training and vacations particular to union contracts. Deborah Cybula, General Manager of Aircrew Planning stated "Altitude MPP's simulation capabilities will allow us to measure the effects of an increased fleet on our operations before changes are implemented."

+4/4 orders 737-838's. 747-238B (483-22615) withdrawn from use (WFU) at Marana.

September 2002: Celebrates 50th anniversary of service to Africa! Australian and New Zealand governments ratified an "open skies" pact that enables Qantas and Air New Zealand to operate unrestricted services out of each other's countries.

Subsidiary, Australian Airlines marked its start of business with the arrival of the 1st of 4 767-300'S for initial operations to Japan (Cairns to Nagoya and Osaka). 1 month later to Fukuoka, Singapore, Taipei, and Hong Kong. Plans to set up a 2nd base, in either Sydney, or Melbourne, at start of 2003. Hopes to have 12 airplanes within 2 years and employ about 250 staff (including 50 Flight Crew (FC) & 180 Cabin Attendants (CA), with many ex-Ansett (ANS).

Has been awarded a 3-year, # A$60 Million/$33.1 Million fixed-wing travel contract by Woodside, the giant Australian energy conglomerate. Qantas (QAN) has committed to upgrade the airplanes on the major Perth to Karratha route using such types as the 737-800's and 767-300's, as Woodside's business ramps up for a lucrative Chinese natural gas product.

October 2002: Following Islamic terrorist bomb attack on 2 Bali nightclubs that killed 191 people, Qantas (QAN) deployed +3 747's and 767 services to Denpasar to evacuate hundreds of Australian holidaymakers. (QAN) also supplied 2 doctors, 3 nurses, and other staff to assist Indonesian authorities in dealing with the injured.

Australian Airlines (AUS) launches with Cairns to Nagoya/Osaka and Cairns to Coolangatta (767-338ER (396-25274, VH-OGJ). In 11/02, Cairns to Fukuoka/Singapore, and Cairns to Hong Kong.

Opens a 3rd heavy maintenance facility in Melbourne for its 737 fleet.

1 747-438LR (1313-32910, VH-OEF) delivery. 2 767-33AER's (27909; 28495) returned to Ansett (AWW).

November 2002: 82nd anniversary!

Donated 747-238 Billion (410-22145, /79 VH-EBQ, "City of Bunbury") to the Qantas Founders' Outback Museum at Longreach. The 747 was flown from Sydney to the airstrip in the small western Queensland town, where its touchdown (accompanied by voluminous clouds of dust) was received with much acclaim. 2 of the engines were shut down on final approach to minimize the dust clouds.

Orders Northrop Grumman (GRU)'s Navigation Systems Division's (LTN-92) Inertial Navigation Systems, and (CMC) Electronics (GPS)-based (CMA-900) (FMS), including (CMA-2102) high-gain satellite communications antenna for installation on its 6 747-338's.

Selects Mxi Technologies Maintenix product for heavy maintenance production planning and control, plus shop floor, data collection requirements.

Code share with (EVA) Air to Taipei.

Qantas (QAN) will acquire 22.5% stake in Air New Zealand (ANZ) for # NZ$550 Million/$276.5 Million. New Zealand government stake will be reduced from 82% to 64%. (ANZ)'s domestic and international operations will remain independent and take on management of (QAN)'s services to, from, and within New Zealand. (ANZ) is a member of the "Star Alliance." (QAN) is a member of the "Oneworld" Alliance.

Reconfigures its 737-800's to 10C, 156Y with its 767-type, "Millenium" business class (C) seats, a re-designed forward coat closet, and a video control center. To lower its seat costs, is converting 17 737-300's, and 4 767-300's to all economy (Y), while its 737-400's will have convertible interiors, allowing business class seats (C) to change to economy (Y).

December 2002: In 3/03, Melbourne to Broome. Also, Sydney to Los Angeles (LAX) to Chicago (ORD) (3x-weekly).

747-238B (543-22616, VH-EBS) WFU at Marana, Arizona, USA. 2 747-438ER's (1308-32909, VH-OEE; 1320-32911, VH-OEG) deliveries. 1st 2 A330-203's (508, VH-EBA "Cradle Mountain;" 522, VH-EBB "Albany"), 300 PAX, deliveries. Will be used to Brisbane, Melbourne, and Perth.

February 2003: Cathay Pacific (CAT) Cargo, Japan Airlines (JAL) Cargo, Qantas (QAN) Freight, & Singapore Airlines (SIA) Cargo signed an (MOU) to partner in a new e-business portal (working title is "Air Cargo Exchange") that is to go online by mid 2003. At the heart of the new portal will be a joint operation provided by the Cargo Community Network Singapore and Global Logistics System Hong Kong, also known as Traxon Hong Kong. Initially, customers will be able to make allotment and free-sale bookings, conduct tracking and tracing, as well as review flight schedules of the 4 carriers. Interestingly, Japn Airlines (JAL) & Singapore Airlines (SIA), are also affiliates of the WOW cargo alliance, including Scandinavian Airlines (SAS) Cargo & Lufthansa Cargo (LUB). (CAT) & (QAN) are linked to the Oneworld alliance.

In 3/03, code share with Swiss (CSR), Sydney - Singapore - Frankfurt - Zurich.

Last 6 months 2002 = +# AUS$352.5M/+$210.9M record (+129%) (-# A$15.5M). Warned that if war with Iraq starts, it could reduce passenger numbers by -20% on key routes from Europe and Japan to Australia. Qantas (QAN) may scale down by -2,500 employees. Domestic market share had fallen to 70%, due to competition from Virgin Blue (VOZ).

737-376 (1251-23478, ZK-JNG) transferred to Jet Connect (QNZ). 747-438ER (1321-32912, VH-OEH) delivery.

March 2003: Code share with Swiss International (CSR), Frankfurt - Zurich.

Will reduce international capacity by -20% ASK in 4/03. War in Iraq and Severe Acute Respiratory Syndrome (SARS) disease scare in southeast Asia are hurting bookings.

737-376 (CFM56-3) (1225-23477, VH-TAF), wet-leased to Air Vanuatu (VAN). 747-338 (23688) wet-leased 1 mth to Air Pacific (APC).

April 2003: Effect of (SARS) outbreak could result in Qantas (QAN) incurring a # A$300M/$150M charge to write off 6 747-338's and 4 767-238ER's that will need to be retired. Will make -1,000 employees redundant and -400 by attrition for -4% of its workforce.

World Top 20 Airlines 1st Q Passenger Traffic (B) (RPK):
1 (AAL) 44.67; 2 (UAL) 39.66; 3 (DAL) 36.82; 4 (NWA) 26.65; 5 (BAB) 23.31; 6 (AFA) 23.27; 7 (CAL) 21.35; 8 (DLH) 20.62; 9 (SWA) 17.53; 10 (KLM) 14.04; 11 (USA) 13.28; 12 (SIA) 12.20*; 13 (ACN) 9.65*; 14 (CAT) 8.51*; 15 (AMW) 7.84; 16 (QAN)* 7.18; 17 (KAL)* 6.72; 18 (IBE) 6.17*; 19 (EAD) 5.69*; 20 (AAT) 5.42. * 2 mths only.

737-376 (24437) wet-leased to Air Nauru (NAU) TIL 6/03. Changed 3 orders A330-200's to A330-300's. A330-201 (513, VH-EBD "Traralgon") delivery.

May 2003: Estimates (SARS) and Iraq war have decreased Hong Kong bookings by -64% (schedule reduced 75%); Japan -30%; France -45%; Italy -33%; & UK -14%. Is considering early retirement of some airplanes and delivery deferrals.

737-838 (1324-33722, VH-VXP "Logan") delivery. 767-338ER (242-24316, VH-OGB), leased to Air Pacific (APC).

July 2003: 1st 6 months = -#A$34.5M/-$22.5M, mainly due to the Iraq war and (SARS). 2002 FY = +$222.91M (+$225.69M): 75.13B RPK (+6.5%); 78.3% LF; 27.13M PAX (+22.5%).

Geoff Dixon, CEO, is expected to unveil a major restructuring to meet greater competition on both domestic & international routes. On Dixon's radar are Virgin Blue (VOZ), a substantial increase in trans-Tasman competition from Emirates (EAD), rampant cost deflation among intnl competitors, a unionized labor force facing large downsizing, and extensive fleet renewal program. To meet those demands, he has hatched the "Sustainable Future Program" to shave A$1B from costs over the next 3 years, with half coming from labor. Qantas (QAN) is facing a difficult transformation process, but Dixon is prepared to sacrifice a few sacred cows.

One of the major challenges is a fleet that is now one of the oldest in the region (a legacy of James Strong, previous CEO, who had baulked at ordering new airplanes). Fuel prices are high and some elements of the carrier's fleet, such as 20-year old 747-300's & 767-200's, are fuel guzzlers, but withdrawing them from the fleet just as Virgin Blue (VOZ) will be taking delivery of 737-800's, would leave a capacity shortfall. (QAN) does have some new airplanes on order, but it needs to order another +90 for delivery over the next 10 years to keep up with competition.

Virgin Blue (VOZ) has captured 28% (18%) of the domestic market, and (QAN) has warned that it will defend its 68% share vigorously.

Union chiefs are resisting further sacrifices, arguing that (QAN) needs to thin management and not just front-line employees. (QAN) has already shed -2,800 staff through attrition, and by making some employees part-time, but some suggest that double that number need to be shown the departure lounge. Still, Dixon may hold off any major restructuring until Australian and New Zealand regulators announce their decision on the (QAN)/Air New Zealand (ANZ) alliance, due at the end of 9/03.

2002 = +$224.8M (+223.2M): 75.13B RPK (+6.5%); +3.2% ASK; 78.3% LF (+2.4); 27.1M PAX (+22.5%); 1.61B FTK (-13.6%); 33,044 EMPLOYEES (+4.5%).

1 (AAL) 195.81; 2 (UAL) 176.15; 3 (DAL) 152.66; 4 (NWA) 115.91; 5 (BAB) 99.71; 6 (AFA) 96.80; 7 (CAL) 95.51; 8 (DLH) Grp 88.57; 9 (JAL) 83.54; 10 (QAN) 75.23; 11 (SWA) 73.05; 12 (SIA) 71.12; 13 (ACN) 69.42; 14 (USA) 69.42; 15 (KLM) 58.89; 16 (ANA) 52.97; 17 (CAT) 49.04; 18 (TII) 48.51; 19 (KAL) 41.80; 20 (IBE) 40.47; 21 (MAS) 36.90; 22 (AMW) 31.98; 23 (SAS) Grp 30.91; 24 (EAD) 30.17; 25 (ALI) 29.84.

(QAN) completed work on the last Royal Australian Air Force (RAA) 707 to undergo "deep maintenance."

3 737-376's (23477; 23483; 23484), sold to Comair (CML), for delivery 8-10/03. 737-838 (1352-33725, VH-VXS "ST HELENS"), & 747-438ER (1331-32914, VH-OEJ) deliveries. 747-338 (638-23408, VH-EBW) WFU stored at Avalon. 767-238ER (119-23304, VH-EAJ), WFU at Marana. 767-338ER (451-25575, VH-OGM) wet-leased to Australian Airlines (AUS).

August 2003: FY 2002 = +# A$343.5M/+$224.7M (-19.7%).

737-3Q8 (2355-26282) returned to (ILF). 737-376 (1225-23477) sold to Comair (CML).

September 2003: Australia's government competition agency has rejected the proposed alliance between Qantas (QAN) and Air New Zealand (ANZ), saying it is anticompetitive. Both will appeal this decision.

Introduces new international business class featuring Skybed sleep-seats and short messaging system that allows passengers in all classes to send and receive short e-mail messages via a telephone handset.

Code share with Cathay Pacific (CAT), Australia through Hong Kong to Rome.

Formed an unlikely alliance with Australian domestic rival Virgin Blue (VOZ)'s 50% owner, Patrick Corporation, to mount a bid for the engine maintenance facility formerly operated by Ansett (ANS) at Melbourne. The joint venture is called Engine Services Company (ESCO), which intends to maintain all of Qantas (QAN)'s (GE) & (CFM) engines while its Sydney engine facility will continue to maintain Rolls Royce (RR) types. The existing (QAN) facility at Tullamarine Airport, Melbourne, would focus on the maintenance of (APU)'s. (ESCO) would also seek work from 3rd party customers, including Virgin Blue (VOZ).

737-376 (1270-23484) sold and delivered to Comair (CML).

October 2003: Next month, (QAN) Cargo, Sydney - Singapore - Shanghai - Los Angeles (Atlas Air (TLS) 747-400F, wet-leased, 2/week). In February, Canberra - Perth.

New Zealand's competition regulatory authority once again ruled against a proposed merger between (QAN) and Air New Zealand (ANZ).

November 2003: Perth - Jakarta (737-800, 3/week).

Will base its new Low-Cost Carrier (LCC) in Melbourne, due to its "excellent facilities, a skilled workforce and incentives." It will start flying to leisure destinations in Australia from May and will employ about 1,000 Victorians over the next few years.

http://www.jetstar.com.au shows the new livery of the new (QAN) (LCC) named "Jetstar" (IMU) featuring a design inspired by the Southern Cross. Subsidiary Impulse (IMU) (Qantaslink) will be used initially as its operating entity startup with its 14 717-200's.

December 2003: Code share with Gulf Air (GUL) from its Singapore hub to the Middle East (Bahrain & Beirut). In March, Perth - Hong Kong (767, 3/week).

Returned 6 747-300's to service that had underwent a flight deck avionics upgrade program. CMC Electronics acted as the overall program manager & system integrator to supply its (GPS)-based CMA-900 (FMS) and CMA-2102 high gain satellite communications antenna. Upgrades on the balance of the fleet will be completed over the next 12 - 18 months.

767-238ER (23306) WFU at Mojave. 23/40 orders A320's for its new low-cost carrier to be named "Jetstar." Exercises purchase rights for +5 737-800's in 2004 under a program to retire its 21 737-300's. A330-301 (558, VH-SBW "Freycinet Peninsular") delivery.

January 2004: Air Transport World magazine named Qantas (QAN) its "Airline of the Year for 2004," citing its "relentless focus on excellence in the air combined with leanness and flexibility on the ground."

Will launch its low-cost domestic operation Jetstar (IMU) with 3 orders (2004-06) A320's, SALE (SIL) leased, 177Y.

Next month, freighter service, Sydney to Singapore, Shanghai, and Chicago (747-400F, (PAO) wet-leased, 2/week).

February 2004: In May, Perth - Kununurra (weekly). In June, Los Angeles (LAX) - Brisbane (747-400, 2 class, 3/week, nonstop) in addition to its existing Brisbane - Los Angeles (LAX), via Auckland. In September, Sydney - Mumbai (3/week). Plans to add Shanghai by end of 2004.

When Jetstar (IMU) begins operations in May, it will offer "buy on board" meals catered by "Gate Gourmet." Since its website opened last December, (IMU) has had >20,000 job applications, including 110 pilots (FC); 2,255 cabin crew (CA); & 1,434 maintenance engineers (MT).

(IMU) will gradually replace the initial 717 operations with the 20 orders A320's + 3 leased airplanes. In June, plans 42 flights/week, Avalon - Sydney; 28 flights/week, Avalon - Brisbane; & 246 flights/week, Melbourne Tullamarine Airport to 6 other destinations.

Places "Sharing the Spirit" decals on 737-838 (VH-VXO) celebrating a new community program supporting children's organizations such as CanTeen, Starlight, (UNICEF), and the Royal Institute for Deaf and Blind Children.

March 2004: JetStar sold 60,000 seats in 1st 10 hours of taking reservations for service starting in May.

Plans to order +5 737-800's for total 33 by mid-2005 and 10 747-400's.

April 2004: 33,044 employees (including 4,000 Cabin Attendants (CA).


In December, Adelaide - Auckland (737-800, 2 class, 3/week). Dragonair (DRG) receives OK for flights to Australia after June 2005 as part of a bilateral air services deal reached between the Australian government and the Hong Kong Special Administration Region, which also gives Qantas (QAN) access to a new "kangaroo route" to the UK via Hong Kong (4/week).

(QAN) takes steps to launch a new low-cost budget airline in Singapore (to be called JetStar Asia) by taking 49.9% and providing S$50 Million/$29.7 Million of the S$100 Million capital base required. Additionally, it has secured equity from Singapore govt-owned Temasek Holdings, the major shareholder of rival Singapore Airlines (SIA), who is also an investor with (SIA) in their low-cost startup, Tiger Airways (TGR). Temasek will hold 19% and the remaining 31.1% will be in the hands of two well-known Singaporean businessmen and investors, Tony Chew and FF Wong.

By aligning itself with Temasek, (QAN) ensures that it will get critical traffic rights to countries such as India, China, Hong Kong, and Vietnam. Temasek's ownership in Singapore Airlines (SIA) is 56.76% which is worth S$7.54 Billion. Additionally, it owns Changi Airport, in which it has invested S$6.5 Billion.

Geoff Dixon, (CEO) said "This is a modest investment for (QAN) but it is an excellent opportunity to participate in the growing intra-Asia travel market. The region, which has a population of >3 Billion people, is enjoying strong economic growth and features many potential destinations from point-to-point travel from Singapore. (QAN)'s aim is to stimulate this market, as the other low-cost carriers have done in other parts of the world."

Installs Rockwell Collins' Head Up Guidance System that projects all flight info on a clear transparent glass screen in the pilot (FC)'s forward field of view.

May 2004: Next month, Melbourne - Ayers Rock (4/week).

Long-term deal worth A$1.4 Billion/$977.2 Million to outsource its computer and data operations to (IBM) and Australian telecommunications provider Telstra, resulting in the layoff of -92 employees. (IBM) will manage and maintain Qantas (QAN)'s Information Technology (IT) infrastructure under a 10-year, A$650 Million contract while Telstra will handle voice, desktop and network svcs for 7 years in a A$750 Million deal.

12/42 orders 737-800 winglets shipsets from Aviation Partners Boeing (APB).

June 2004: In September, to resume Sydney - Mumbai (747-300, 3/week). In October, code share with Air France (AFA), France - Australia: Adelaide, Brisbane, Darwin, Melbourne, Perth, & Singapore - Sydney. In December, Sydney - Shanghai (A330-300, 3/week nonstop). Qantas (QAN) overcame a challenge from low-cost international contender "Backpackers Xpress" to secure rights to resume services between Australia and the emerging market of India. The bid by the upstart carrier was to gain the available 2,100/week seats of capacity to the subcontinent to enable it to launch services linking Melbourne and Britain via Bangkok and New Delhi. (QAN) plans to begin service in September to Mumbai (3/week), increasing to (5/week) next May. This will see the return of the national carrier to the rapidly growing Indian market, following its withdrawal from the region several years ago.

British Airways (BAB) and Qantas (QAN) implemented the latest release of Sabre AirFlite SlotManager. Delta Airlines (DAL); Lufthansa (DLH); El Al (ELA); & Japan Airlines (JAL) also use the new system.

Will establish a base in London in June for 400 international flight attendants (CA). From early 2005, will establish a base for 250 (CA) in Brisbane. Currently has 4,000 international (CA)'s at bases in Sydney, Perth, Melbourne, Auckland, & Bangkok.

OneWorld (ONW) Alliance: Aer Lingus (ARL); American Airlines (AAL); British Airways (BAB); Cathay Pacific (CAT); Finnair (FIN); Iberia Airlines (IBE); LAN (LAN); & Qantas (QAN).

July 2004: Receives OK for Sydney - London, via Hong Kong. To start in November (747-400, 3/week) increasing to 4/week and daily by April.

August 2004: Started using its A300-300's on international routes with Sydney, Melbourne, Brisbane, & Perth to Hong Kong.

Steps up its penetration of the European market by substantially expanding its code share with its "Kangaroo route" partner British Airways (BAB) between the UK and Switzerland, including Geneva.

Fiscal Year (FY) 2003 = +A$648.4/+$469.7 Million (+88.8%) (+A$343.5 Million): +5.3% (RPK). In recognition, each of (QAN)'s staff members will be paid a bonus of A$1,000/$726, and (QAN) has committed A$50 Million/$36.3 Million over the next 3 years toward staff benefit initiatives, such as increased paid maternity and carer's leave, paternity leave, and 2 new child care centers.

Geoff Dixon, (CEO) contract has been extended to December 2005.

September 2004: In an effort to decrease its debt, British Airways (BAB) will sell its 18.25% stake in Qantas (QAN) for approximately A$1.1 Billion/$766.6 Million.

The New Zealand High Court rejected the appeal by Air New Zealand (ANZ) and (QAN) regarding their proposed alliance involving (QAN) taking 22.5% of (ANZ), and both entering into a strategic partnership enabling them to operate together on services across the Tasman, within their domestic markets and on international flights out of New Zealand.

Ralph Norris, (ANZ) CEO in expressing disappointment at this decision, stated "The New Zealand High Court had not allowed these airlines to take this opportunity to introduce some rationality into a market that in recent years had been anything but rational. While (ANZ) is in a much stronger position, both financially and competitively than when the alliance discussions began, compelling reasons for an alliance still remain. (ANZ) will review this rejection decision before considering other possible options with (QAN), which may include other forms of an alliance and opportunities that do not conflict with the Commerce Act. Despite the failure of the appeal, (ANZ) has established a robust platform to enable (the 82% government-owned) (ANZ) to continue growing in the short to medium term. While we are cautiously confident that initiatives in train over this period will provide for the long term, given the inherent volatility and intense competition in this industry, this will be a considerable challenge."

October 2004: Geoff Dixon, (CEO) 63, has had his contract extended til July 2007.

Is in final stages of negotiations to take a 49% stake in Thai Air Cargo, which would be a joint venture with Bangkok-based (CTI) Holding Company. Expects it to be launched in mid-2005 operating MD-11F's.

Singapore Airlines (SIA) sold its 6.3% shareholding in Air New Zealand (ANZ) for $41.3 Million, representing an investment loss of some -$336 Million over 4 years. (SIA)'s majority owner, government investment agency Temasek Holdings, picked up a 3% stake in (QAN).

Operates another "Captain's choice" charter Sydney - Merida - Havana - Manaus - Rio de Janeiro - Iguassu Falls - Lima - Easter Island - Sydney.

November 2004: Sydney - Hong Kong - London (3/week). Perth - Singapore - London (3/week).

December 2004: To take advantage of high-growth cargo sector with launch of Atlas Air (TLF) wet-leased 747F services to South Africa, India, & Germany. Next month, Australia to Frankfurt via Mumbai, Kazakhstan, & Singapore (2/week) and Australia - Johannesburg (weekly). In February, Australia to Chicago, via Shanghai & Singapore (747-400F (TLS) wet-leased), and establishment of (QAN) 49%-owned Thai Air Cargo (TCG).

Adelaide - Auckland (737-800, 3/week). Sydney - Shanghai (A330-300, 3/week), in addition to code share with China Eastern Airways (CEA) (4/week). Code share with Air France (AFA), Singapore - Adelaide, Brisbane, Darwin, Melbourne, Perth, Sydney.

Now offers interline e-ticketing with all 7 of its OneWorld (ONW) alliance partners.

Polynesian Airlines (PLY) chartered a (QAN) 767-300ER (VH-OGP), to operate a Sydney - Apia flight due to holiday demand.

January 2005: 2004 Pre-tax = +A$964.6 Million/+$1.26 Billion: +38.4% (FTK). Last 6 months = +A$458.4 Million/+$360 Million (+28%) (+ A$357.8 Million): +32% fuel costs.

7 orders DHC-8Q-400's.

March 2005: Further extensive restructuring could result in redundancies among the 38,500-strong workforce and the relocation of operations within Australia and offshore.

April 2005: Code share with OneWorld (ONW) Alliance partner, Finnair (FIN), Helsinki to Brisbane, via Singapore.

June 2005: Airline flight crews (FC) and officials of United Airlines (UAL), Air New Zealand (ANZ) & Qantas Airways (QAN) participated in a live test of e-passports that contain computer chips with biographic information at Los Angeles International Airport (LAX) and Sydney Airport in Australia. They presented their new e-passports when arriving in the USA through (LAX) and arriving at Sydney. The e-passports contain the holder's biographic information and a biometric identifier, in this case a digital photograph, embedded in a contactless chip. The USA Department of Homeland Security & Department of State are working on the test in cooperation with the governments of Australia and New Zealand.

33,862 employees.

In January, Sydney to Beijing (3/week). To increase to daily within 2 years.

July 2005: Qantas Airway's (QAN) ambitions to establish a low-cost beachhead in Asia appear to be hanging in the balance after its JetStar Asia (JSA) joint venture confirmed it is in alliance talks with another Singapore-based Low-cost Carrier (LCC), Valuair (VLU). In the first major consolidation move in the Asia market, Ken Ryan, CEO, JetStar Asia (JSA), which is 49% owned by (QAN), said (QAN) and (VLU) "are exploring a variety of ways they can work together or cooperate with each other." The development reflects (JSA)'s frustrations at its inability to access rights to China and Indonesia and the heavy low-cost competition centered on Singapore, where three (LCC)'s are based including Singapore Airlines (SIA) subsidiary Tiger Airways (TGR), and a 4th operator, AirAsia (ASW), is active. (JSA) which launched last December, has withdrawn from Singapore - Pattaya and reduced its fleet requirements in 2005 from 8 to 4 A320's. Privately owned (VLU) launched in May also is facing considerable pressures in its home market. However, it gained limited rights to serve Chinese destinations and also operates to Hong Kong, Jakarta, Bangkok, & Perth.

In October, Sydney - Queenstown, New Zealand (Sats). In December, Brisbane - Seoul (767-300, 2 class, weekly) and continue codeshare with Asiana Airlines (AAR), Sydney to Seoul (daily).

Selects Lufthansa (DLH) Systems with 10-year contract to supply its new flight planning system, and will use Lido OC & Lido Briefing solutions to optimize its flight paths and brief cockpit crews.

August 2005: 33,882 employees (-2.9%).

2004 = + A$763.6 Million/+4580.9 Million (+1.8%) (+A$648.4 Million).

September 2005: Bucking the trend toward outsourcing maintenance, Qantas (QAN) said it intends to establish a new consolidated "center of excellence" in Sydney for maintenance of Rolls-Royce (RRC) (RB211) engines. However, (QAN) also said it will eliminate -60 positions from its Sydney workforce as a result of consolidation and the establishment of Jet Turbine Services, a joint venture with Virgin Blue (VOZ) parent Patrick Corp for maintenance of (CF6) and (CFM56) engines in Melbourne. The consolidated facility will employ around 300.

(QAN) initially will commit A$7.6 million/$5.7 million with a further A$12 million to be supplied within 12 months "provided the facility reaches the necessary productivity levels set by the company," (CEO) Geoff Dixon said.

(QAN) is reviewing all its Engineering & Maintenance operations "as a result of widespread consolidation and cost reductions occurring within aviation maintenance and repair operations around the world" Dixon added, "We are extremely pleased that the first review completed has resulted in a commitment to an in-house solution."

October 2005: Qantas (QAN) is offering year round service into Queenstown, New Zealand, from Sydney with the introduction of a permanent weekly return service using 737-800s from October 1. (QAN) will add a fifth weekly nonstop service from Brisbane to Los Angeles from January 28 using a 747-400. It will go to double-daily service between Melbourne and Los Angeles from eight flights per week, with seven operating nonstop and seven via Auckland. Services between Australia and the USA mainland will rise to 39 per week from March when it commences new service to San Francisco.

(QAN) began implementing enhanced QuickCheck facilities in Brisbane, permitting passengers with hold luggage to check in using the airline's automated ticket kiosks. Service is scheduled to begin in Melbourne, Sydney and Canberra during the next two months.

(QAN) is looking to expand its Australian (LCC) Jetstar (JSA) to take over regional international holiday routes from both (QAN) and its holiday subsidiary Australian Airlines (AUS). The new Jetstar International would be two-class and eventually may fly to the USA and Europe.

Just days after Air New Zealand (ANZ) said it likely will outsource a major share of its airplane heavy maintenance requirement, (QAN) confirmed that it is considering a substantial restructure of its Engineering & Maintenance operation as well, with a decision expected within 3 - 4 months.

Maintenance Repair & Overhaul (MRO) operations "are changing rapidly throughout the world, with a big push towards scale and lower cost locations," (CEO) Geoff Dixon said. "The competition between (MRO)s is becoming as competitive as the rest of the industry."

Dixon added that (QAN) faces three choices: It can do nothing and continue as before, an option he described as not viable. Alternatively, it can restructure and relocate (MRO) operations extensively within Australia, or can "move significant parts of the business offshore." He said he preferred the onshore option. "However, if we cannot, by working together with staff, make the business globally competitive, we will have to pursue the alternative." Of (QAN)'s 38,000 employees, 6,900 are in Engineering & Maintenance (MT).

The world's largest nonaligned airline is independent no more - - Japan Airlines (JAL) said yesterday it will apply to join the Oneworld (ONW) Alliance, a decision that was "warmly welcomed" by the alliance. In terms of revenues, the (JAL) Group is the No 3 airline company in the world, trailing the Lufthansa (DLH) Group and the Air France (AFA) - (KLM) Group.

The link is not unexpected, given the close association between (JAL) and (ONW) Alliance anchors American Airlines (AAL) and British Airways (BAB) as well as with (QAN) and Cathay Pacific (CAT), also members of the partnership. "Becoming a member of (ONW) Alliance, while maintaining our bilateral agreements, would provide our customers with even greater convenience, comfort and value through a more extensive global network, integration of e-ticketing, the linkage of frequent-flier mileage programs, the mutual use of each other's services such as lounges and by the creation of seamless travel," (JAL) Group (CEO), Toshiyuki Shinmachi said.

(JAL) will bring a lineup of 206 airports in 34 countries to the (ONW) Alliance network, which covers 600 cities in 135 countries. It will expand (ONW) Alliance's existing network by +10%, adding +68 unique destinations including +56 in Japan, +five in China and Guam.

(AAL) will be supporting (JAL) through the membership application process as its prime (ONW) Alliance sponsor, assisted by Cathay Pacific (CAT).

Last week, the (ONW) alliance announced its first member from the Middle East, which is Royal Jordanian (RJA).

(QAN) appears to be moving toward a 787/777 order after airline sources confirmed that (QAN) and Boeing (TBC) are close to finalizing a longer-range variant of the 777-200LR that would have a reach of just over 10,000 nm/18,500 km, enabling (QAN) to operate from Sydney to London nonstop year round with 250 passengers.

(CEO) Geoff Dixon told media in August that Boeing (TBC) was close to getting Sydney - London range from its 777-200LR. The extra legs would come from an additional fuel tank and lighter interior fixtures borrowed from the 787 cabin.

(QAN) is close to a 787 commitment, understood to be for 50 firm orders for both the 787-8 and 787-9, which would make it the launch customer for the 787-9. The sources confirmed media reports that (TBC) has offered (QAN) a (HGW) version of the 787-9 at just under 255 tons (MTOW), well above the current 227 tons. This would give the 787-9 (HGW) a range similar to the standard 777-200LR's 9,400 nm. (QAN) is expected to place an order for up to 100 airplanes in the 787/777 class.

Airbus (EDS) has returned to (QAN) with a longer-range version of the A340-500 in an effort to meet (QAN)'s requirement for an airplane to fly from Sydney to London.

However, (EDS) (COO) Customers, John Leahy conceded that the variant's performance is marginal with just 120 business (C) and first class (F) seats.

Both the A340-500 and 777-200LR easily can handle the Sydney - New York and Sydney - Dallas missions in both directions. Some analysts have suggested that (QAN) link up with (ONW) Alliance partners (AAL) and (BAB) to operate eastbound Sydney - Dallas - London - Sydney with a 777-200LR in a three-class first, business and premium economy configuration. (QAN) is expected to announce a commitment for up to 100 airplanes in the 777 and 787 classes by early December.

November 2005: Qantas (QAN) is proposing to expand its low-cost domestic carrier Jetstar (IMU) into international markets in a move that is expected to result in conflict with the (QAN)’s pilot unions.

(QAN) (CEO), Geoff Dixon told an investment conference recently that (QAN) is developing a proposal for a two-class, value-based international Jetstar (IMU) that would serve primarily leisure-based markets.

(QAN) has been pleased with the performance of (IMU), which it launched in May 2004, and earlier this year said it was looking to deploy the low-cost model in markets elsewhere. (QAN) already has a 49.9% share in Singapore-based Jetstar Asia (JSA).

(IMU) says there are growth opportunities for the low-cost carrier (LCC) on the broader international stage and that (IMU) management feels (IMU) is in a position to deliver, but it is subject to board approval whether the plan proceeds.

The proposal is expected to be discussed at (QAN)’s next board meeting on 7 December. At that meeting, (QAN) management is also due to put forward its proposal for new long-haul airplanes for (QAN).

The proposal is also expected to include airplanes for an international arm of (IMU), which currently operates A320s.

(QAN)'s pilot (FC) unions have already expressed concern regarding the proposal, with suggestions that an international (IMU) would take over under-performing (QAN) routes to South-East Asia, China and Japan.

Where an international low-cost carrier (LCC) would fit with (QAN)’s existing leisure-based carrier, Australian Airlines (AUS) is not known. Dixon said recently that (AUS) is “certainly viable for the future”, despite (AUS) failing to meet expectations.

(IMU) will make its first foray into the international market in December when it launches New Zealand services. (IMU) will have two A320s based in Christchurch, operating to Sydney, Melbourne, Brisbane and the Gold Coast.

(QAN) will offer an additional weekly service between Sydney and Los Angeles from December until February, providing more than >6,000 additional seats during the holiday season. It also plans to operate thrice-weekly service on Wednesday/Friday/Sunday between Australia and Vancouver via San Francisco from June 14 to Aug 13 aboard three-class 747s.

OzJet (OZJ), Australia's first all-business (C)-class airline, entered the domestic market amid signs that the price war of recent years is set to shift to the premium sector. The startup's launch was greeted by business (C) fare discounts by Qantas (QAN) and a more aggressive campaign by Virgin Blue (VOZ) for the corporate market, underpinned by the introduction of its Velocity frequent-flier scheme. Former racing team head Paul Stoddart's (OZJ) is offering eight flights a day between Sydney and Melbourne using two 737-200s configured with just 60 seats each. Its introductory fare of A$200/$147 each way and regular fare of A$325 compare to the online rate of A$565 being offered by (QAN). (OZJ) plans to expand to Brisbane, Adelaide, Perth and Canberra next year as it increases its fleet to 10 airplanes.

Emirates Airlines (EAD) wants to double the number of weekly services it is permitted to operate between Dubai and Australia from 42 to 84, and the carrier's argument that it is run on strictly commercial principles drew an angry riposte from (QAN) Chairman, Margaret Jackson. "To suggest that (EAD) is competing on similar terms as commercially run airlines like (QAN) is, quite frankly, fiction," Jackson said. Noting that (EAD) is 100% owned by the Dubai government and that its Chairman, Sheikh Ahmed Bin Saeed Al-Maktoum, is a member of the Dubai ruling family and head of the Dubai Department of Civil Aviation, which operates the airport, Jackson said, "Life must be wonderfully simple when the airline, government and airport interests are all controlled and run by the same people." She also observed that (EAD) pays no corporate tax in Dubai.

Boeing may have received some unexpected help from (EAD) in its bid to sell 777-200LRs to (QAN). (EAD) President, Tim Clark said he thinks that if (QAN) orders the type, it will "make a great success" of its proposed premium-class Sydney - London nonstop operation; "I am sure they will fill it every day." (EAD) ordered 10 777-200LRs to open routes such as Dubai - Houston and Dubai - Rio de Janeiro.

December 2005: The Australian Competition Tribunal ruled that the federal government will retake control of airport pricing after three years of deregulation. The decision stemmed from a dispute brought last year by Virgin Blue (VOZ) against Sydney Airport in which the airline said Sydney favored full-service carriers by basing fees on weight rather than passengers, a policy favored by Qantas (QAN). Price negotiations between airports and airlines now must be approved by an arbitrator.

(QAN) will increase the frequency of its Sydney to New York (JFK) (via Los Angeles) route from 3 to 5 flights a week on February 27th to the current flights which arrive and depart (JFK) on Wednesdays/Fridays/Sundays (QAN) will add flights on Mondays/Saturdays, all operated with 747-400s.

(QAN) will double the number of direct flights from Melbourne from London Heathrow from 7 to 14 a week on Mar 26th. The existing daily 747-400 will operate via Singapore, while a new daily 747-400 will operate via Hong Kong.

(QAN) Freight will add Christchurch to its four-times-weekly Sydney - Auckland cargo service beginning January 9.

JetStar Asia (JSA) named Neil Thompson acting (CEO) following (CEO) Ken Ryan's decision to return to Australia from Singapore. Thompson was General Manager, Customer Relationship Marketing at Qantas (QAN).

In an interview with ABC TV in Australia, (QAN) (CEO), Geoff Dixon said Jetstar International (IMU) eventually might grow to represent 20% of the company's flying, operating to destinations within 8 - 10 hours of Australia. It is unclear what effect this would have on existing low-fare international brand Australian Airlines (AUS), which operates five 767-300s in 13 low-yield leisure markets. (QAN) recently announced that (AUS) will introduce a premium economy (PY) product in mid-2006 and is taking over the Cairns - Tokyo route next year.

(QAN) scrapped domestic and transTasman base commissions to travel agents in Australia and New Zealand and reduced payments on international sales from 7% to 5% in a move designed to lower distribution costs and improve profit margins. The decision reflects global trends, increasing direct ticket sales (particularly through the Internet) and the growth of online-based low-cost subsidiary Jetstar (IMU), according to (QAN). Base commissions on sales have been reduced steadily in recent years as (QAN) has refocused its business, with rates of only 1% on offer for domestic and Australia - New Zealand services.

Singapore Airlines (SIA)'s latest bid to gain access to the Australia - USA route appears to have stumbled again now that Australian Prime Minister John Howard seems to be raising the "national interest" flag. "The Australian" reported that senior government figures said (SIA)'s attempt to gain greater access had "largely failed."

Both (SIA) and Emirates Airlines (EAD) have been pushing for access to routes that are (QAN)'s most lucrative. Only United Airlines (UAL) competes on the transpacific, which over the years has been a graveyard for carriers. Air New Zealand (ANZ) suspended its Sydney - Los Angeles service after "9/11," while Northwest Airlines (NWA), Continental Airlines (CAL) and American Airlines (AAL) all have tried it and withdrawn. (AAL) currently code shares with (QAN).

Howard hinted strongly that (QAN) will be protected, saying on "ABC Radio," "There are very strong arguments put by (QAN) that the current policy, at least in the near term, should be kept. You have got to be absolutely certain that each participant in the market is coming from the same launching pad as far as government support and so forth is concerned."

Analysts believe (SIA) may be granted limited access with routes such as Brisbane and Melbourne to Los Angeles and San Francisco. (QAN) has waged an intense lobbying campaign in Canberra, saying (SIA) and (EAD) pay limited or no taxes and their entry would distort the market. Howard appears to have taken the (QAN) line, stating on "ABC Radio," "We need to [introduce competition] in a balanced way that reflects the differential circumstances that many of the global carriers operate under that is different to (QAN)."

Meantime, (SIA) rejected the implication that it receives government subsidies. "That's just (QAN) spin, which isn't backed by fact," spokesperson Stephen Forshaw told the "Associated Press", adding that (SIA) "plays by exactly the same rules" as any other Singapore-based company. "The airline that benefits financially the most from support from government is (QAN) because of its protection from competition on the Australia - USA route. That protection effectively amounts to a hidden subsidy," Forshaw said.

Air New Zealand (ANZ) continues to talk with Oneworld (ONW) Alliance member (QAN) about collaborating on transTasman routes, where (ANZ) (CEO), Fyfe estimated current overcapacity at 30%, or the equivalent of "11 - 12 A320s flying empty every day." An agreement between the two carriers would be aimed at "aligning capacity" in order to reduce "wingtip-to-wingtip flying" but would stop well short of the full equity and marketing alliance that was rejected by regulators a few years ago. Fyfe is hopeful of reaching a framework agreement with (QAN) sometime in the next couple of months, after which the deal will be presented to Australia and New Zealand competition authorities. More than >10 airlines operate services between the countries, he noted. He also revealed that (ANZ) has conversations underway with Star (SAL) Alliance partners and other carriers about the feasibility of creating a small pool of shared airplanes to address seasonal variations in demand. Membership in the (SAL) Alliance contributes NZ$400 million in annual revenue, he said.

Boeing (TBC) appears to be ahead by a nose in the intense battle for a $15 billion, 100-plus-airplane order from (QAN) pitting its 787 and 777 against Airbus's A350 and A340. The Qantas (QAN) board will make a selection, with an announcement expected. (TBC)'s pitch has been helped by Cathay Pacific (CAT)'s order for the 777-300ER and the recently announced +1.4% improvement in that airplane's fuel burn.

While the 777-200LR appears to be a winner over the A340-500 for the ultra-long-range hub-busting mission, the race for the larger order between the 787 and A350 is much closer. It is possible that (QAN) will split the deal, with A350s being taken by Jetstar International (IMU), which (QAN) wants to develop into a long-haul, low-cost carrier (LCC).

$8 Billion, 45/20 orders (2008-02) 787-8 Dreamliners and expects to eventually take a total of 100 jets which would bring the order to $13 Billion. The airplanes will be the first to be used by a low-cost carrier (LCC), Jetstar International (IMU) internationally with a likely route: Sydney to Vancouver, BC, Canada. Another significant plus is it being the first airline seriously committed to buying the larger version of the 787-9, the "stretch" available in 2011. Also included are as many as 50 "purchase rights" bringing the potential order to 115 airplanes. Geoff Dixon, (CEO) said "the 787 won on price and fuel efficiency, plus being able to deliver in 2008."

(TBC) appears to be finalizing the business case for the 787-10 just one week after (QAS)'s order for the 787-8 and 787-9HGW versions. The increase to an (MTOW) of 255 tons for the 787-9 gives it the range of the 787-8 and the weight for an effective additional stretch, taking seating capacity up to that of the 777-200ER. The increase has been a requirement of (EAD), the principal catalyst behind development of the 787-10.

"It's fairly obvious to us that it's very doable with modest investment," 787 Program VP & General Manager, Mike Bair said. "It's clearly an airplane we see a marketplace for, obviously being spurred on by (EAD), which is very interested in the airplane."

(TBC) agreed to the higher-weight version of the 787 in late September and (EAD) held off committing to the A350-9 while trying to convince (TBC) to build the 787-10. (EAD) President, Tim Clark said at the A380 Reveal nearly a year ago that "we have told (TBC) we want [the 787-10]."

The additional model in the 787 family also will help (TBC) in its attempt to secure orders from Singapore Airlines (SIA), British Airways (BAB), and Lufthansa (DLH). Bair said the 787-10 likely will not be ready before 2012. (SIA) is expected to be the next major carrier to announce its intentions, likely in late January, while (EAD) could be close behind, possibly at February's Singapore Air Show.

(SIA) was evaluating the 787-3 last year for intra-Asia routes but was not happy with the business case when compared with the pricing of A320s/737NGs to (LCC)s. Now it is looking at the 787-8 and 787-9 for long, thin routes to Europe, while the 787-10 would be ideal for intra-continental high-density services. (QAN) will be a certain buyer for the 787-10, as it already operates 747-300s and 747-400s on transcontinental services from Perth to Melbourne and Sydney.

Bair said the 787-10 could have "about 300 seats, plus or minus 10 or so" and that its overlap with the 777-200ER is not a huge concern. "Better for us to step on it than somebody else. If you can do a product the market is clamoring for, you'd be silly to deny it," he said.

Bair added that (TBC) is on schedule to deliver 112 787 Dreamliners in 2008 and 2009 and is committed to fulfilling orders through 2012. He said a post-2009 production rate should be finalized in the first quarter.

January 2006: Qantas (QAS) launched thrice-weekly Sydney - Beijing service. (QAN) said it intends to operate daily service to Beijing and Shanghai "within two years" aboard two-class A330-300s and noted that the travel market between the countries has increased +22% in the past year. It flies to Shanghai four times weekly. (QAN) inaugurated nonstop service from Sydney to Beijing.

(QAN) said it signed a nonbinding Memo of Understanding (MOU) with SR Technics (SWS) to establish a joint venture providing component management services for the A380. The new company will compete with Spairliners, formed last summer by Lufthansa Technik (DLH) (LTK) and Air France Industries (AFA). (QAN) said it is filling a similar need in the Asia/Pacific region.

February 2006: Qantas (QAN) opened a new airplane Maintenance Repair & Overhaul (MRO) facility at Los Angeles International Airport (LAX). (QAN) is the largest international operator at (LAX). (QAN), which expects to begin the first A380 flights to the USA in 2007, will use the facility as a base for full-service Maintenance & Engineering, including "A" checks on 747s. It will employ in excess of >80 service technicians (MT).

(QAN) is considering acquiring a share of Indonesian budget carrier Adam Air (DHI) to strengthen its position in the high-growth Southeast Asia market. According to Gunawan, (QAN) is planning to establish Jakarta as a second Asian hub after Singapore. (DHI) began flying in December 2002 with 737s and currently operates 20 airplanes to 39 destinations, including Malaysia and Singapore. (DHI) has flagged ambitions to triple its fleet over the next three years to 50 airplanes. (QAN) already owns 49% of Singapore-based Low Cost Carrier (LCC) Jetstar Asia (JSA). Under Indonesian law, foreign carriers may buy up to 49% of domestic airlines.

Later, (QAN) executives had second thoughts about buying into (DHI) after one of (DHI)'s 737-300s was flown for 4 hours without any navigation and communications recently. According to the "Jakarta Post," the 737 lost the systems about 20 minutes after takeoff on a domestic flight and the pilot (FC) continued over the island of Java before landing on Sumba on a 1,800 m runway. The 737 was on a flight from Jakarta to Makassar on South Sulawesi. None of the 145 passengers was injured. (QAN) and (DHI) executives had previously met to discuss a range of issues including equity and safety training. However, (QAN) said that no decision had been made about any acquisition.

Looking ahead, (QAN) said it will focus on expanding Jetstar International (IMU) both at home and internationally, "large-scale investment" in more fuel-efficient airplanes and continuing to implement the (SFP), which is "on target" to achieve savings of -A$1.5 billion by the end of Fiscal Year (FY) 2006 and already has identified a further -A$1 billion in savings through cuts in distribution costs, restructuring of (QAN) Engineering into standalone Maintenance Repair & Overhaul (MRO) businesses, the sale of (QAN) Catering and other initiatives.

Air Canada (ACN) intends to challenge (QAN) between Los Angeles and Sydney next year, operating fifth freedom services as part of a daily Toronto - Sydney service that will commence during the first half of 2007 when its new 777-300ERs and 777-200LRs begin arriving. (ACN) said it will use authority contained in the recent "open skies" agreement between the USA and Canada and will apply to Canadian and Australian authorities for permission to operate the route. (ACN) flights will be timed to offer "convenient connection possibilities" from (LAX) to and from Montreal, Edmonton, Calgary and Vancouver as well as connections across the USA via Star (SAL) Alliance partners United Airlines (UAL) and US Airways (AMW)/(USA). (ACN) already operates between the USA and Australia on its Vancouver - Honolulu - Sydney service using existing route authorities.

March 2006: Australia and India entered into a more liberal air services agreement that will open the door for airlines from both countries to establish commercial partnerships and develop services. The new accord, announced on the eve of Australian Prime Minister John Howard's visit to India, provides for multiple designation of carriers, codesharing and service on more routes.

Qantas (QAN), with three flights per week to Mumbai, is the only airline that currently operates direct service between the countries. It also plans to expand access to the fast-growing market by establishing links to Delhi. A number of Indian operators, including Air India (AIN) and Jet Airways (JPL), are believed to be considering introducing Australian service.

The Qantas Group will make the following changes to its Darwin schedule May 1: (QAN) will operate a daily service to Brisbane and Jetstar (IMU) will fly six-times-weekly. The route to Adelaide will be operated daily by (QAN) and twice-weekly by Jetstar (IMU). Service to Melbourne will be operated six-times-weekly by (IMU), increasing to daily July 1. Changes add 732 seats per week. Other services will remain as is.

(QAN) confirmed the closure of its 747 heavy Maintenance Repair & Overhaul (MRO) operations in Sydney after 55 years in service, resulting in the loss of approximately -480 (MT) jobs although up to 140 employees may be transferred elsewhere in the company, (CEO), Geoff Dixon said.

(QAN), which has been considering the move since October, as part of the restructuring of its Maintenance & Engineering operations, said it would make an effort to keep the work in Australia, but is looking at securing a cost base that will ensure profitability with oil costing more than $60 per barrel.

"A longer-term commitment to retaining the operations in Australia will depend on (QAN) achieving competitive benchmarks with the larger global Maintenance Repair & Overhaul [MRO] providers now dominating world aviation," Dixon said. "Retaining three wide body maintenance facilities in Australia is no longer viable under this scenario. We have one chance to make this work and we are determined to succeed."

Details of the plan call for 747 (MRO) to transfer to (QAN)'s base in Avalon, Victoria. Heavy maintenance for its 767s will continue at the purpose-built facility in Brisbane. There will be an increase in employment opportunities at both sites, (QAN) said. There also will be a A$50 million/$36.7 million investment "in infrastructure and technology to facilitate the restructuring," a six-month review of its narrow body (MRO) operation at Tullamarine in Melbourne and an effort to seek third-party work once restructuring is complete.

Dixon said the Sydney base would have had to close by 2010 at the latest, due to space limitations, and that "workplace efficiencies recently negotiated with the workforce at Avalon will enable us to start immediately to achieve the productive scale necessary to compete with offshore operations."

The restructuring, once complete, should achieve cost savings of -A$100 million per year, enough to keep (QAN) competitive by mid-2008 "while preserving a much-desired skill base within the country," according to Dixon. If all proceeds according to plan, heavy (MRO) on the A330s and 787s due to enter service in 2008 may stay in Australia.

Later, (QAN) denied reports that it intends to outsource its A330 heavy maintenance permanently, saying it always has used outside providers when operating a new airplane type and eventually will bring the work to Australia. It currently operates 14 A330s. Engineering Executive General Manager, David Cox said (QAN) is negotiating with several vendors, including SR Technics (SWS), regarding checks scheduled for later this year, but "we are already looking at onshore options for the longer-term future of our A330 work." (QAN)'s 767 (MRO) base in Brisbane is a likely location if expected efficiency improvements are achieved "in coming years." It announced the closure of its 747 base in Sydney earlier this month.

(QAN) will convert four 737-300s to freighters for domestic operator Australian Air Express (ACS). The airplanes currently are based in New Zealand and will be replaced with 737-400s. Work will commence next month and be completed by January, with the airplanes entering service as they are completed from August. The program will use conversion kits developed by Israel Aircraft Industries (IAI)'s Bedek Aviation division. The 737s will replace a fleet of 727-200s. Australian Air Express (ACS) is owned jointly by (QAN) and Australia Post.

(QAN) finalized its commitment for up to 115 787s with a firm order for 45 worth $5.8 billion, options for 20 and purchase rights for another 50. The signing ceremony, confirming a December 14 announcement, was a highlight of celebrations marking inauguration of the airline's Sydney - San Francisco service. The first four 787s will be delivered to Jetstar International (IMU) in July 2008, with another 28 to follow for (IMU) and (QAN) by 2011. (QAN) will get its first 787 Dreamliner in mid-2009. The 787s will replace a fleet of A330s and 767s.

April 2006: Qantas (QAN) opened its A$55 million/$39.4 million, 17,500 sq ft Material & Logistics Distribution Center in Mascot outside Sydney. Executive General Manager, (QAN) Engineering, David Cox said the project is part of a larger investment in (QAN)'s domestic Maintenance Repair & Overhaul (MRO) capabilities, which includes an $85 million facility in Brisbane and a $20 million upgrade to its Rolls-Royce (RRC) Engine Maintenance Center of Excellence. The Mascot center is anchored by a Miniload Automated Storage & Retrieval System comprising four stacker cranes moving at up to 24 m per second and capable of retrieving approximately 260,000 components from trays in more than 30,000 locations, Cox said.

(QAN) will launch a Sunday, Melbourne - Queenstown flight from July 9 aboard a 737-800. The service will run for 12 weeks.

As expected, the Qantas Group moved to rationalize its various airline brands, with leisure operator Australian Airlines (AUS) being absorbed into the mainline from July, and Jetstar International (IMU), the overseas arm of (QAN) domestic Low-Cost Carrier (LCC), Jetstar (IMU), launching operations in November. (CEO), Geoff Dixon told media that "(AUS) has done an outstanding job over the past few years, but we are determined to take full advantage of (IMU)'s success with its highly competitive cost structure and service standards." (AUS) was launched four years ago, but the twin Bali bombings and 2004 tsunami have taken a toll on passenger numbers. (AUS)'s cost base is -30% below that of (QAN), but (IMU)'s costs will be -45% lower yet, according to analysts.

About 40 (AUS) cabin crew positions will be lost through the transition to (IMU). However, the latter's expansion into long-haul international service will result in +550 new jobs. (QAN) is determined to build on (IMU)'s domestic success but is facing challenges from mainline pilots (FC) on its international plans.

(IMU) will start operations with four A330-200s transferred from (QAN), growing to a fleet of six by mid-2007. Initial destinations are Osaka from Sydney and Brisbane, Ho Chi Minh City and Phuket from Sydney, Bangkok from Melbourne, Bali from three Australian markets and Honolulu from Sydney and Melbourne. (AUS) services will cease between Cairns and Sydney, Hong Kong and Gold Coast, while Cairns - Singapore will be operated by (QAN) via Darwin.

Dixon said (IMU)'s network "will ultimately provide more services to Asia and the Pacific before expanding with second-stage flying to Europe and other destinations." It will transition to 311-seat 787-8s from August 2008, building to a fleet of 12, which will be used on routes to Europe and other long-haul destinations.

Unlike the budget version of (IMU) in Australia, Jetstar International (IMU) will interline with selected connecting carriers. Its mainline parent also will codeshare on its flights.

The on-again-off-again relationship between Air New Zealand (ANZ) and (QAN) is back on, with the carriers announcing a comprehensive code share agreement for their routes across the Tasman Sea. Both airlines will file shortly seeking authorization from the New Zealand Minister of Transport and the Australian Competition & Consumer Commission. Regulatory approval is expected to take approximately six months. The agreement replaces the more ambitious equity tie-up that ran foul of competition regulators in both countries in 2003. Since then, Emirates Airlines (EAD) has entered the market, along with Low-Cost Carrier (LCC) Pacific Blue (PBI) and (QAN) (LCC) subsidiary, (IMU). Both (IMU) and (ANZ) low-fare offshoot Freedom Air (SPT) are taking a larger slice of the market, leaving the premium parent carriers seeking ways to consolidate. "This commercial agreement enables us to maintain network presence while realigning some of the current surplus capacity on the Tasman," (QAN) (CEO), Geoff Dixon said. "We plan to develop a combined schedule that allows us both to better utilize airplanes and save costs." (ANZ) currently operates 134 transtTasman flights per week while (QAN) has 84. There are eight airlines vying for the 5.4 million passengers flying across the Tasman and market load factor declined from 75% LF to 70% LF between 2003 and 2005. At the same time, capacity grew +39% (ASK), but passenger growth lagged at -31%. Under terms of the code share, (QAN) will cease to be a holder of Redeemable Convertible Notes in (ANZ). (QAN) owns NZ$98 million/$59.7 million of the notes, accounting for 4.2% of (ANZ)'s share register if converted to ordinary shares. The holding was approved by the New Zealand government as the first step in the equity alliance proposed in 2003. (ANZ) will convert the note to debt and repay (QAN) over four years as part of the negotiated transaction.

May 2006: Qantas Airways (QAN) is the principal Australian airline serving major cities in the Asia-Pacific region, the UK, Europe, the Americas, and southern Africa. An extensive domestic network is also operated.

35,520 employees.

(IATA) Code: QF - 081. (ICAO) Code: QFA - (Callsign - QANTAS).

Parent organization/shareholders: Publicly traded (100%).

Owns: Australian Airlines (AUS) (100%); Eastern Australian Airlines (100%); Impulse Airlines (IMU) (100%); JetConnect (QNZ) (100%); JetStar (IMU) (100%); JetStar Asia (JSA) (49%); Southern Australian Airlines (100%); Sunstate Airlines (100%); Air Pacific (46.3%); Thai Air Cargo (TCG) (49%); & Airlink (100%).

Alliances: OneWorld; Air Calin (NCI); Air France (AFA); Air Malta (MLT); Air Niugini (NIU); Air Pacific (APC); Air Tahiti Nui (NUI); Air Vanuatu (VAN); Alaska Airlines (ASA); Asiana Airlines (AAS); Brindabella Airlines; China Eastern Airlines (CEA); (EVA) Air; Gulf Air (GUL); Japan Airlines International (JAL); Jetstar International (IMU); Polynesian Airlines (PLY); South African Airways (SAA); Sunstate Airlines; Swiss (CSR); US Airways (AMW)/(USA); & Vietnam Airlines (VIE).

Main Base: Sydney Kingsford Smith International (SYD).

Domestic, Scheduled Destinations: Adelaide; Albury; Alice Springs; Armidale; Ayers Rock; Barcaldine; Blackall; Blackwater; Brisbane; Broome; Bundaberg; Burnie; Cairns; Canberra; Charleville; Coffs Harbour; Coolangatta; Darwin; Devonport; Dubbo; Emerald; Gladstone; Gove; Hamilton Island; Hobart; Horn Island; Kalgoorlie; Karratha; Kingscote; Kununurra; Launceston; Longreach; Lord Howe Island; Mackay; Melbourne; Mildura; Moree; Mount Isa; Narrabri; Newcastle; Newman; Paraburdoo; Perth; Port Hedland; Port Lincoln; Port Macquarrie; Rockhampton; Roma; Sydney; Tamworth; Townsville; Wagga Wagga; Weipa; & Wollongong.

International, Scheduled Destinations: Auckland; Bahrain; Bangkok; Beijing; Christchurch; Denpasar Bali; Frankfurt; Ho Chi Minh City; Hong Kong; Honolulu; Jakarta; Johannesburg; London; Los Angeles; Manila; Mumbai; Nadi; New York; Norfolk Island; Noumea; Osaka; Papeete; Port Moresby; Port Vila; Queenstown; Rotorua; Santiago; Seoul; Shanghai; Singapore; Suva; Taipei; Tokyo; Wellington; & Zurich.

(QAN) warned staff it will lay off -20%, or approximately -1,000, of its management and administrative personnel in order to slash costs as fuel prices continue to rise.

June 2006: Qantas (QAN) inaugurated direct service from Sydney to Vancouver and operates 3 flights a week, on Wednesdays, Fridays & Sundays, using a 747-400 via San Francisco. (QAN) will replace its daily Melbourne - Launceston 737 service with a twice daily QantasLink Dash 8 service from August 1st. The airline will also suspend cease all flights into Burnie Airport from July 31st.

Competition regulators gave preliminary clearance to (QAN) to establish an interlinked low-cost carrier (LCC) network in Asia through its Jetstar (IMU)/(JSA) brand, despite opposition from rival (LCC) Tiger Airways (TGR). The Australian Competition and Consumer Commission (ACCC) provided interim authorization for (QAN) and its wholly owned Jetstar Asia (JSA) subsidiary to cooperate with its 44.5% Singapore venture Orangestar Holdings - - the holding company for the combined (JSA) and Valuair (VLU) - - on fares, schedules and routings. This means the group can offer a consistent product and link up services operating into, out of and within Asia.

The (ACCC) said its initial determination was made on condition that the agreement between (QAN) and Orangestar does not extend to allocation of existing capacity, withdrawal of services on overlapping routes or entry onto routes to/from Australia.

(QAN) proposes to bring together the operations of (JSA) and Orangestar in an attempt to reduce overheads further and enhance competitiveness. While (IMU) has proved a success story on domestic and transtasman routes, (JSA) has been struggling, with losses of -A$27.4 million in the December half-year.

The tie-up between the carriers will increase passenger feed and strengthen the position of the Jetstar (IMU)/(JSA) brand in the Asian market as it begins flights between Australia and Thailand, Vietnam, Bali, Japan and Hawaii in November in the initial phase of its international expansion.

(IMU) will increase its Adelaide - Darwin service to five-times-weekly from twice-weekly on July 1. Six-times-weekly Melbourne - Darwin service will become daily the same day.

It also renewed its outsourcing agreement for Navitaire's reservations and revenue management systems. The deal includes new code share booking and passenger processing capabilities.

(QAN) revealed that its pre-tax profit for the fiscal year ending June 30 will be approximately A$670 million/$494.3 million, which falls at the bottom of the A$670 - A$895 million range forecast by analysts. The total is affected by an estimated -$153 million in restructuring costs. "We have advised the market since reporting a 2004 - 2005 profit before tax of A$914.3 million, that we would not achieve the same level of profitability" in the current fiscal year, CEO, Geoff Dixon said. "This position has been reinforced by a +A$1 billion increase in fuel costs for 2005 - 2006 after hedging, a significant amount of which will not be recovered by surcharges."

Dixon also announced that (QAN) has decided against selling its catering operation, the expected proceeds of which were included in the forecast. Instead, it will restructure the operation and expects to see annual (EBIT) improvements of +45%, or more than >A$15 million. The restructuring will include realigning its two Sydney catering bases so that one handles only client services and the other only (QAN) catering.

(QAN) will scale up its aggressive cost reduction program following a recent warning that a combination of redundancy payouts and a A$1 billion/$737.8 million additional impost from rising fuel prices will see its full-year earnings fall by -27%. (CEO), Geoff Dixon indicated that further job cuts may be necessary despite the progress made with (QAN)'s five-year, A$3 billion cost and efficiency improvement agenda. He said (QAN) already faces A$153 million in restructuring costs associated with -2,000 recent redundancies and the closure of its heavy maintenance base in Sydney. The loss of a further -1,000 management positions will be accounted for in next year's results.

July 2006: Aircraft Maintenance & Engineering Corporation (AMECO) (BEJ) of Beijing will paint four Qantas (QAN) 767-300ERs. The first airplane will be delivered to (AMECO) at the end of July, with three others following nose to tail.

(QAN) confirms that the Australian Airlines (AUS) brand name will cease to exist. Its routes will continue to be operated, but its 767 fleet will be rebranded in (QAN) livery and its crews will revert to (QAN) uniforms.

August 2006: Qantas (QAN) plans to launch a domestic airfreight subsidiary in October called "Express Freighters Australia" (EFA). (QAN) said that the new subsidiary will wet-lease 737-300 converted freighters to Australian Air Express, a (QAN)/Australia Post joint venture (JV), under a 12-year contract. The 737-300s will be converted to freighters by (QAN) Engineering in Avalon.

National Jet (NJS) had been providing cargo airplanes for domestic service and Express Freighters Australia (EFA) will take over that role.

The Qantas Group blamed an additional A$818 million/$626.2 million in fuel costs net of hedging benefits for a -30.4% drop in net profit to A$480 million for the fiscal year ended June 30, despite a +8.6% increase in sales to A$13.64 billion.

(QAN) announced that it will partner with Telstra, Panasonic Avionics Corp and AeroMobile to develop technology enabling passengers to use their cellphones or Personal Digital Assistants (PDA)s in flight. AeroMobile is a joint venture between (ARINC) and Telenor. New systems will be tested over three months on a 767 operating domestic routes.

September 2006: Qantas (QAN) has been given the green light by Australia's competition regulator to work closely with its offshore low-cost carrier (LCC) subsidaries based in Singapore.

Both Jetstar Asia (JSA) and Valuair (VLU), which (JSA) took over last year, have been struggling to compete with Tiger Airways (TGR), which opposed the linkup, suggesting it would reduce competition.

October 2006: Qantas (QAN) is set for a showdown with Australian unions after it announced it will outsource its Information Technology (IT) applications support and maintenance to Indian global service providers, Satyam Computer Services and Tata Consulting Services, starting next month. (CEO), Geoff Dixon said that it would cost (QAN) A$100 million/$75.4 million to develop its own "in-house capability in this area to industry best practice standard - - an investment it could not support, given the extensive capital expenditure program already underway." The shift will take 15 months and cost -340 jobs. While (QAN) has been outsourcing various functions for some time, the latest move comes at a point when it is striving to extract more savings while ramping up its low-cost JetStar International (IMU) operation, which pilots (FC) see as a major threat to their salary packages.

Dixon has been appointed Chairman of the Governing Board of the Oneworld (ONW) alliance. He succeeds Iberia Airlines (IBE) Chairman & CEO, Fernando Conte, who has held the position for more than two years.

Australia's first international passenger jet (a (QAN) 1959 Boeing 707 and the oldest in existence), has been saved from the scrappers. It will fly back to Australia from the United Kingdom next month to become part of the nation's aviation history. It'll be on display at the (QAN) Founders Museum in Longreach and the museum's Chairman, Warwick Tainton, says the plane hasn't flown for six years, so it's a huge task to get it airworthy. "The resurrection of the aeroplane is probably the most technically advanced project of its kind ever undertaken in the world by volunteers. It's really quite significant."

(QAN) gave Airbus (EDS) a lift with an order for an additional eight A380s, taking its firm commitments to 20 of the airplanes.

It also ordered four more A330-200s to be delivered between December 2007 and September 2008 to help with the shortfall in capacity resulting from the A380 delay. In addition, it committed to five more 737-800s, which will take its fleet of that type to 38.

November 2006: Satyam Computer Services of India signed a seven-year deal with Qantas (QAN) covering development and maintenance for more than 150 applications across various technologies.

A330-201 (513, VH-EBD), wet-leased to JetStar International (IMU). More A330s will join the (IMU) fleet, that will operate from Melbourne and Sydney to Bangkok, Denpasar, Honolulu, Vietnam and more destinations, which will be added as more airplanes join the fleet.

December 2006: Qantas Airways (QAN) is focusing its Japanese service on Tokyo Narita (NRT), following Jetstar (IMU)'s approval to operate long-haul flights from Australia. "We intend to grow both (QAN) and Jetstar (IMU) in international markets, but we must match the appropriate cost structure and style of service to individual markets," (QAN) (CEO), Geoff Dixon said. "While (QAN) continues to be a major leisure travel provider, under its current costs, it requires a significant business base to sustain profitable operations on some key international routes." (IMU) will replace (QAN) on some Japanese routes, Dixon said, though the specific routes have not been determined yet. By summer 2007, (QAN) is scheduled to operate flights from (NRT) to Sydney (11-times-weekly aboard A330s), Melbourne (thrice-weekly aboard A330s), Perth (thrice-weekly aboard 767-300s), and Cairns (14-times-weekly). It began operating a seasonal Cairns - Sapporo service twice-weekly this month, and will continue flying the route through March.

(QAN) introduced online check-in for same-day-return domestic flights.

Starting January 2nd, Sydney - Seoul, 3/week, using 767-300s. Starting March 26th, Sydney - Sn Francisco increased to 5/week, using 747-400s.

(QAN) Freight represented by its subsidiary, Australian Air Express (ACS) launched a four-times-weekly, Melbourne - Auckland overnight service aboard a 767-300F.

A330-201 (506, VH-EBC), wet-leased to "Jetstar.com" (IMU).

January 2007: Qantas (QAN) confirmed that it is considering an equity stake in Vietnam's Pacific Airlines (PAH), which is relaunching as a low-cost carrier (LCC) with fares as low as $1. Pacific (PAH) is majority owned by Vietnam's Ministry of Finance, which wants to sell 30% to a foreign airline. Pacific (PAH) was positioned as a "value airline" with fares -25% below Vietnam Airlines (VIE), but the success of (LCC) competitors like AirAsia (ASW) has prompted a rethink. Plans call for Pacific (PAH)'s fleet to be built up from the current two (one 737 and one A320), including acquisition of two 787s ordered by Qantas (QAN).

Pacific (PAH) operates domestic flights between Ho Chi Minh City, Hanoi and Da Nang, as well as from Ho Chi Minh City to Taipei and Kaohsiung. In the longer term, it expects to fly to Japan, Korea, China, Hong Kong, Macao and India. Several companies, including Singapore government investment arm Temasek, have looked at the airline but a deal has failed to materialize.

Last year, Qantas (QAN) looked at Indonesia's Adam Air (DHI). Qantas (QAN) CFO, Peter Gregg told media in Singapore this week that Adam Air (DHI), which lost a 737 this month, no longer is on (QAN)'s radar.

Qantas (QAN) exercised options for two 72-seat DHC-Q400s for January 2008 delivery to its QantasLink regional carrier (NJS). Qantas (QAN) ordered seven DHC-Q400s in early 2005, and the first entered service in early 2006. QantasLink (NJS) operates 46 airplanes including eight 717s and 28 DHC-Dash 8s on 1,900 weekly flights to 49 destinations.

February 2007: In another development likely designed to appease concerns about Qantas (QAN) (already 49% foreign owned) becoming less Australian, Airline Partners Australia (APA) announced that if its bid is successful, former Boeing President Australia, Andrew Peacock will be appointed to the (QAS) board. Peacock is well connected with the current Australian government, having been a minister in a previous Liberal government in the 1970s and 1980s, aswell as ambassador to the USA in the 1990s. (CFO), Peter Gregg would lose his spot, a change that has been greeted with some disquiet. Gregg long has been touted as (CEO), Geoff Dixon's successor.

A furor is developing among a growing number of politicians from both sides of Australia's government over a A$300 million/$232.4 million performance - and time-based sweetener that Qantas (QAN) senior management would reap if (APA)'s A$11.1 billion bid for (QAN) succeeds.

News of the sweetener, which analysts suggested will be a bitter pill for (QAN)'s workers, comes following revelations of an investigation into possible insider trading in (QAN) stock. Numerous politicians have lashed out at the incentive scheme, with one suggesting that "any Qantas (QAN) executive that is prepared to accept the bonus [should] resign." Weekend calls for a Senate inquiry were stalled when (APA) agreed it would subject its bid to the scrutiny of the Foreign Investment Review Board.

Opposition (Labor Party) Shadow Treasurer, Wayne Swan told News Corp that "if senior management is able to reap such huge financial rewards from this deal, surely the very least they can do, is to give (QAN) employees a few solid assurances about their job security and entitlements." Such guarantees have not been forthcoming, although (APA) has argued forcefully that its success is linked to rapid expansion, not breaking up the airline. Many see it spinning off the frequent-flier program much as Air Canada (ACN) did with Aeroplan.

(QAN) released an independent, expert report, supporting its recommendation that shareholders accept the A$11.1 billion/$8.61 billion or A$5.60 per share private equity takeover bid by (APA).

(APA)'s pending $11.1 billion/$8.73 billion buyout of (QAN) is facing a chilling political wind, with a number of industry analysts and observers suggesting the deal will not fly. Sustained and vocal opposition from Prime Minister, John Howard's Liberal party has become almost a daily occurrence, with former Transport Minister, John Anderson telling "ABC Radio" he did not think the deal was in the national interest. He raised concerns over debt levels and future shocks, and took no comfort from the bidder's statements that such debt is common in the airline industry.

Meantime, (QAN) executives are burdened with unflattering but inaccurate press reports that they will receive payouts of A$91 million if the takeover succeeds. (QAN) refuted the report in "The Sydney Morning Herald" that executives also are set to receive bonuses of up to twice their cash salaries, and a stake in the new company of up to 4.5%. (QAN) said the paper had overstated the amount by +A$23 million and that executives would be reinvesting A$36 million into (APA). The bidders earlier had agreed that management could gain up to +4.5%, subject to strict performance hurdles.

These benefits are a rallying call for unions incensed by (APA)'s rejection of job security guarantees and serve to further unsettle the Australian public, the majority of whom (70%) do not want the sale to proceed. The Howard government is behind in the polls, and interest rates are rising, along with voter discontent. There also has been increasing and quite vocal opposition in the financial community to equity buyouts.

(QAN) delivered relatively good news to the (APA) consortium bidding for (QAN), raising its profit forecast and reporting a +A$358.5 million/+$278.7 million net profit for the six months ended December 31, a +1.7% increase from the +A$352.6 million earned in the year-ago period.

(CEO), Geoff Dixon said he expects the full-year fuel bill to top A$3.5 billion, up +A$660 million on the previous fiscal year, meaning "it is imperative we continue to seek efficiencies across all sections of our business." He said the Sustainable Future Program yielded -A$319 million in savings during the half-year. "We need to accelerate this unit cost reduction in the second half of the year, if we are to achieve our target of -A$750 million," he added.

Dixon said the company's full-year pre-tax profit will be +30% to +40% higher than last year's +A$480 million "subject to fuel costs not increasing significantly, demand continuing to grow, and cost reductions not achieved in the first half, being realized in the second half." The guidance was revised from the +25% to +30% increase forecast in December.

(QAN) scotched rumors that it is contemplating cutting its investment in Singapore-based Jetstar Asia Airways (JSA). (QAN) (CFO), and Jetstar Asia (JSA), Chairman, Peter Gregg said that "(JSA) is, and will continue to be, an important part of the (QAN) Group's diversification strategy." Local press reports have expressed concerns over the airline's future, following a number of operational cancellations and claims regarding pilot (FC) shortages. (QAN)'s rejection of those rumors comes as speculation mounts that (JSA) competitor, Tiger Airways (TGR) is looking at launching domestic operations in Australia, in conjunction with Perth-based regional Skywest Airlines (SKD). (TGR) (CEO), Tony Davis joined the (SKD) board last year.

Just one day after reporting a thumping profit, (QAN) was brought back to earth, when Singapore's (TGR) unveiled plans to launch Australian domestic services by year end, with five new A320s.

During the announcement, (TGR) President & (CEO), Tony Davis took a cheeky swipe at (QAN), saying (TGR) is ready to "deliver Australians genuine low fares, competing in a market which has returned to a cozy duopoly and seen fares increase."

Australians actually enjoy some of the world's cheapest airfares, with transcontinental fares from A$189/$147 on Jetstar Airways (IMU) or A$219 on Qantas (QAN) with full service. But there is a twist. While (QAN) and Virgin Blue (VOZ) serve all major trunk routes, JetStar (IMU) connects secondary airports with major cities. (TGR) intends to bring its fares, which are similar to or lower than (IMU)'s, to major trunk routes.

Davis claimed that "Unlike others in this market, we won't be a low-cost carrier (LCC) selling high fares. We'll be low cost and very low fare." (TGR) will launch Singapore - Perth service next month, and has been flying to Darwin for some time. Davis outlined (TGR)'s plans to federal ministers last week, started the process to obtain an Australian Air Operator's Certificate (AOC) and has filed with Australia's Foreign Investment Review Board. Contrary to most countries, Australia allows 100% foreign-owned airlines to operate domestically if it is in the national interest.

The move by (TGR) has been expected, as (QAN) is the largest shareholder in Singapore-based (JSA), (TGR)'s biggest rival. (TGR)'s major stakeholder is Singapore Airlines (SIA). Centre for Asia Pacific Aviation (CAPA), Executive Chairman, Peter Harbison said he "sees (TGR) more focused on a direct attack on the local market, rather than providing support to the Singapore flag carrier. But (SIA) would not weep over any adverse economic impact on one of its major rivals."

Davis is on the board of Perth-based, regional Skywest Airlines (SKD), but it is not clear what cooperation will evolve between the two airlines.

(QAN) said the termination of its transtasman agreement with Air New Zealand (ANZ) resulted in the convertible notes issued by (ANZ) to (QAN) in 2002 being converted into 44.2 million new ordinary shares. As a result, (QAN) will own approximately 4.2% of (ANZ)'s ordinary shares.

Qantas (QAN) Group selected the (GEnx) to power its fleet of up to 115 787s. (CFO), Peter Gregg called the choice "a difficult one, following an exhaustive eight-month evaluation process." The initial order is for engines for 45 firm airplanes and was valued by (QAN) at A$2 billion in "capital and maintenance costs over the life of the engines." It gives the (GEnx) a significant edge on 787 customers, with orders for 216 airplanes compared to 125 for the (Trent 1000).

March 2007: Qantas Airways (QAN) will increase its five-times-daily Sydney - Los Angeles - New York (JFK) service to daily from August 14.

The Australian Council of Trade Unions is running an e-mail campaign asking Australians to send their objections to the government and "prevent airplane maintenance services jobs going off-shore, protect airline routes and services to regional Australia and stop (QAN) customer service jobs from being sent overseas."

(QAN) will boost its domestic operation with nine new A320s to be delivered over a 15-month period from late 2007 and used by Jetstar (IMU). The company is girding itself for the arrival of Tiger Airways (TGR) Australia, which aims to challenge (QAN) with a low-cost product. In addition, (QAN) said four 767-300s used in international operations and scheduled to be sold instead will be transferred to domestic routes in the middle of this year. "The additional capacity for both (IMU) and (QAN), along with previously announced plans for QantasLink (NJS), should enable the Qantas Group to maintain its 65% share of the Australian domestic market," (CEO), Geoff Dixon said. (IMU) will use the new A320s on popular leisure routes and "to look at new destinations within Australia," he said.

April 2007: The struggle for control of Qantas (QAN) took a new twist with Airline Partners Australia (APA)'s announcement that it will lower the threshold for its takeover bid to 70% of shares tendered from 90%, and is extending its A$11.1 billion/$9.16 billion offer by two weeks to May 4.

The reduction from the initial acceptance threshold is designed to either sidestep or pressure two large shareholders, Balanced Equity Management and UBS Global Asset Management, who together control more than 10% of the airline and appear unwilling to sell or are holding out for a higher bid. (APA) has acquired just over 30% of Qantas (QAN) stock, according to press reports.

"(APA) is concerned that many (QAN) shareholders have become discouraged from accepting the offer in the belief that the opposition to the offer from a small number of vocal shareholders may prevent us reaching the 90% acceptance condition," Director, Bob Mansfield said, adding that the consortium's A$5.45 per share offer is "full, fair and reasonable." (QAN) shares reportedly reached A$5.39.

(APA) said it has secured commitments from financiers for a new three-year facility it can use if it receives more than >70% but less than 90% acceptance. It said that should the offer close with (APA) holding less than <90%, it still expects to install (APA) nominees in all nonexecutive board positions and will continue to "propose that (QAN) significantly increase its borrowings."

Reports surfaced that (APA), if successful, intends to repay its equity investment in the takeover through A$1.5 billion in dividends. along with a $2.5 billion capital return from the (QAN) balance sheet, within one year of gaining control. "(APA)'s proposal is that the increase in (QAN) debt will be used to fund these distributions," it said in a stock market filing. The A$11.1 billion offer is comprised of A$7.5 billion of borrowings and A$3.5 billion of investor funding.

(QAN) issued a response affirming its support of (APA) and confirmed that the consortium "intends to appoint to the board of directors all of the nonindependent directors who are then on the board of (APA) and two directors who have not yet been identified who will be independent of (APA)."

There has been widespread opposition to the deal in Australia, with the majority of the public surveyed opposing the deal. However, issues such as climate change and a severe drought currently are dominating the headlines, reducing the negative sentiment surrounding the (QAN) buyout.

(APA)'s plan to pay itself approximately A$4 billion/$3.33 billion in the first year, following its proposed takeover of (QAN) has thrust the deal back into the headlines, with the move being slammed by politicians, unions and pundits. Outspoken Senator, Barnaby Joyce (National-Queensland) led the political charge, telling "The Sydney Morning Herald," that (APA) is "not playing with their money. They are playing with everybody else's money and they are playing with our economy."

Unions predictably are furious and are seeking assurances about the security of A$690 million in workers' entitlements following revelations of new debt levels. Noted business commentator, Terry McRann wrote in "The Australian" that the incentive shreds the (QAN) board's argument that "(QAN)'s biggest challenge [and thus justification for the buyout] was getting money into its balance sheet to finance its A$13 billion airplanes re-equipment program." He argued that either (APA) should give accepting shareholders the option to take back their stock or the (QAN) board should refer the matter to the Australian Takeover Panel.

In a desperate bid to get its A$11.1 billion/$9.29 billion buyout of (QAN) off the ground, (APA) announced that the May 4 deadline will not be extended while repeating its warning that share prices will fall if its bid fails. (APA) needs 70% acceptance but is languishing at just 27%. "(APA) is aware that an overwhelming majority of small and large (QAN) shareholders support the offer. Now is the time for those supportive shareholders to accept," the consortium said.
To sweeten the deal, it announced that it will pay within five days of the offer becoming unconditional, and has extended withdrawal rights to all shareholders, giving them the chance to back out before the offer is unconditional. The latter formerly was available only to institutional investors. But more observers are claiming that the A$5.45-per-share cash offer is too low, given the booming market and (QAN)'s profit upgrades since the deal was announced late last year. Recently, Virgin Blue (VOZ) said March passenger traffic rose +12% year-over-year, pushing load factor over 80% LF. Others, such as hard-hitting commentary website Crikey, have pointed out that (APA)'s offer is only 10 times (EBITDA), whereas Macquarie Bank subsidiary Macquarie Communications and Infrastructure just paid double that rate for a UK business.

(QAN) won a A$900 million/$732.1 million, five-year contract from the Australian Department of Defense that has caused some controversy because there was no competitive tender for the deal, according to widespread press reports from Australia. The government reportedly blocked potential competitors because (QAN) was seen as the only company capable of handling the department's needs.

The Australian Communications and Media Authority (ACMA) approved an in-flight cellular communication trial on one (QAN) airplane for up to 12 months and said it will consider "the potential for permanent regulatory arrangements for the service" once it collects and analyzes results from the evaluation program. "The granting of permissions for the evaluation service is the culmination of many months of work aimed at facilitating an industry need," (ACMA) Chairman, Chris Chapman said. The trial will be conducted on one (QAN) passenger airplane operating domestic routes. "(QAN) has decided to commence the evaluation with e-mail and text only, disabling voice services," (ACMA) said.

(QAN) said it will operate three additional Sydney - Perth - Johannesburg services in both December and January.

(QAN) announced an agreement with State Capital Investment Corp, the investment holding arm of the Vietnamese government, to purchase 30% of Pacific Airlines (PAH), the country's second-largest carrier. (QAN) (CFO), Peter Gregg said the transaction should be completed within the next two months, "supporting Jetstar (IMU)'s growth strategy and enabling us to extend our reach in Southeast Asia." (QAN) will help Pacific develop a new business plan and grow its small 737-400 fleet used on domestic routes and to Taiwan. "(PAH)'s strategy is to reposition itself as a low-cost carrier (LCC) and expand within Vietnam and internationally," Gregg said, with (IMU) playing a major role. Insiders suggest that (PAH) will lease at least two 787s from (IMU) from 2009.

May 2007: Airline Partners Australia (APA)'s A$11.1 billion/$9.21 billion bid for Qantas (QAN) was dealt yet another blow as acceptances fell to 25.52% from 27.8% as the offer moves into its final week. (APA) must secure 50% acceptance to trigger a two-week extension of the offer, giving it time to reach the revised target of 70%. It did say that more than half of the (QAN) shareholders have accepted the offer. But for the moment, the bid appears to be doomed, as market sentiment views the A$5.45 offer as undervaluing the airline, with major players betting that (APA) will come back with a better deal once the current one collapses. To try and sway shareholders, (APA) has been taking out full-page advertisements in the major daily papers warning that (QAN)'s share price will fall if the deal does not go through. But the Australian share market is booming on the back of major takeovers, and it is highly likely that (QAN) shares will continue to climb as more robust profit upgrades are issued.

(APA)'s five-month race to acquire (QAN) will reach the finish line very soon, by which time the consortium must have 50% acceptance. It has gained some ground, announcing that it has secured 32.96%, up from just 25.94%, 24 hours earlier, while its voting power has risen to 27.78% from 17.63%. Expectations are that it will reach its target in a last-minute rush of acceptances, enabling it to extend the deadline for the required 70% by two weeks. However, many of the institutions and hedge funds that control a combined 83% of the stock believe that (APA) will return with a better offer if the current bid fails, while others want to keep their stakes and reap the dividend payout planned by (APA).

Later, the (QAN) board announced that the five-month, A$11.1 billion/$9.11 billion takeover bid by (APA) had failed, despite a weekend of frantic appeals by the consortium to Australian regulators. (APA) was able to secure only 46% of (QAN) stock by close of business and needed 50% to keep the bid alive. It later secured - - by negotiation, according to insiders - - another parcel of shares that took its controlling stake to 50.6%. It then appealed to Australia's Takeover Panel to allow the late acquisition and trigger a two-week extension that would give the consortium time to secure the additional 20% required to meet the 70% threshold. Its effort elicited a scathing response from local commentators and the regulator rejected the appeal. The consortium, anchored by Macquarie Bank and Texas Pacific Group, claimed that a majority of shareholders supported the deal. But it said its bid was scuttled by the hedge funds and institutions that are major (QAN) shareholders and preferred to be among the minority owners retaining the remaining 30% when the takeover proceeded, thereby becoming eligible to participate in the dividend bonanza (APA) planned during the first year. One commentator said that "this deal degenerated into greed in the true Wall Street style and they [hedge funds] all came unstuck." Under Australian regulations, a second bid cannot be mounted for four months. Insiders suggest that (APA) will not return to the table. At the same time, the future of the (QAN) board and management team that offered the deal a ringing endorsement is being questioned in the Australian media. (QAN) will submit a statement to the Australian Stock Exchange regarding the failed takeover bid. The deal has come under intense scrutiny in Australia, with many questioning if it ever was in the national interest. It also has left bitterness among (QAN) staff, whose morale already was at a low ebb.

(APA) declared its bid for (QAN) dead, but at the same time said it was leaving the door open for another attempt in four months. "Given the majority shareholder support for (APA)'s proposal, (APA) is exploring a number of alternatives, including the possibility of making a renewed offer for (QAN)," the consortium said. Trading in (QAN)'s shares was suspended amid a growing uproar over the international wheeling and dealing in its shares that occurred as the clock ticked down to the deadline. (APA) initially had claimed that irregularities in the share tendering process should permit the bid to stay alive despite the May 4 deadline having passed, with less than <50% of shares tendered. However, regulators twice rejected the consortium's claim that a late parcel of shares from USA hedge funds should be counted. It also has been revealed that during the hectic trading of (QAN) shares by offshore hedge funds, the (QAN) Sale Act was breached as foreign investors owned a reported 65% of (QAN). At the same time, it was revealed that USA corporate raider, Samuel Heyman holds 10% despite no substantial shareholding notice being lodged. Notice is required for any stake over 5%. The revelations appear to be hardening the government's resolve that any new bid would require new regulatory approvals. Insiders suggest that the government is less than impressed with hedge funds' performance over the past few weeks when they have been playing what amounts to high-stakes poker. Peter Harbison, Executive Chairman of the Sydney-based Centre for Asia Pacific Aviation (CAPA), said that "the extraordinary events at the weekend surrounding (APA)'s bid is a reminder of the destabilizing effects of takeovers and ownership changes." He added that the bidders' failure to gain sufficient acceptances to extend the bid both crystallized employee and union opposition to a possible takeover and weakened the position of the (QAN) board, led by Chairman, Margaret Jackson, and (CEO), Geoff Dixon.

(QAN) shares dipped -2.97% to A$5.22/$4.30, one day after trading was suspended in the wake of the chaotic collapse of (APA)'s A$5.45-per-share bid for (QAN). The decline was not the magnitude predicted by (APA), although the consortium's indication that it may return with another offer likely helped support the share price. (QAN) shares now are trading at 10 times forward earnings for 2008, while Air New Zealand (ANZ) is trading at 17 times and Virgin Blue (VOZ) 16 times. Analysts and editorial writers in Australia are calling for the resignation of (QAN) board members and senior management who endorsed the bid. However, the board is considered one of the industry's best and level heads are arguing that the (APA) debacle was not of (QAN)'s making. (CAPA) Executive Chairman, Peter Harbison warned that any "fresh bid is unlikely for at least 3 to 6 months, by which time the aviation landscape within Australia will have significantly changed." He added that "the threat, and then reality, of a new entrant [Tiger Airways (TGR)] will depress yields, while international competition will also intensify." Singapore Airlines (SIA) will start A380 flights to Sydney in just six months with an all-new business class (C) product, while (QAN) doesn't launch A380 services for almost a year. A major factor in any new bid is this fall's Australian federal election, with 70% of the public reportedly thinking the deal is bad for the country and the incumbent government well behind in the polls. Harbison said he believes the chances of a revised bid from (APA) are slim.

Later, (APA) dropped a bombshell on (QAN) stockholders by announcing that is not going to make another bid for (QAN), which some investors reportedly counted on when they rejected (APA)'s A$5.45 ($4.52) per share offer. At the same time, Chairman, Margaret Jackson, who backed (APA)'s effort, reportedly announced her intention not to seek reelection at November's annual meeting. In a statement, the bid consortium said it "has concluded that in the current environment and circumstances, a renewed offer on terms acceptable to (APA) would not be likely to succeed," after which it thanked the (QAN) board, management and employees "for their professionalism during the bid process." (QAN) shares dropped -A$0.03 to A$5.25, according to "The Sydney Morning Herald," a price the paper said "made a mockery" of warnings by (APA) and the (QAN) board that shares would plunge. Jackson had refused to resign following the bid's collapse, but Australian media reported that her steadfast support for (APA) rendered her reelection unlikely. The government dealt with its share of embarrassment as well, as it became apparent that it was unable to monitor how much of (QAN) was in foreign hands. During the bid's frantic final weeks, USA hedge funds scrambling to acquire stock, pushed foreign ownership in (QAN) up to a reported 65%, well above the 49% limit. The Minister for Transport, Mark Vaile wrote to the airline seeking clarification, but has received no public reply.

(QAN) released a statement saying that its board "endorsed the leadership of Geoff Dixon as [CEO] and his senior management team" and asked him to stay in that position until "at least" July 2009. Chairman, Margaret Jackson announced her intention to retire later this year after 15 years on the board and seven as Chairman. "I greatly value what (QAN) has achieved over the past seven years, culminating in the largest takeover offer for an airline in aviation history. I am also confident that the strategies we have put in place will secure a successful future for (QAN)," Jackson said. Among those strategies were "to grow and defend the domestic flying businesses" and "to consider consolidation opportunities."

(QAN), it turns out, is worth approximately A$17 billion/$13.96 billion, or 53% more than the (APA) consortium offered shareholders in its A$11.1 billion bid that collapsed this month. Ironically, the new A$8.57-per-share valuation came from Macquarie Bank, which led (APA). Subsequently, (QAN) shares have risen to a high of A$5.43.

(QAN) (CEO), Geoff Dixon released a statement saying that (QAN) "believed" the level of foreign ownership did not exceed the 49% permitted under Australian law, but (QAN) admitted that "reconciliation of its shareholding, despite extensive monitoring, [has been] extremely difficult" in the wake of (APA)'s failed takeover bid. (QAN)'s share registry, Link Market Services, said foreign ownership was "just below" <50% on May 4, but that the transfer of approximately 55% of (Qan) shares since that date, may have altered that figure. Dixon said, "market intelligence indicated the selling since May 4 had been by investors associated with foreign hedge funds and substantial buying has been by Australian interests."

(QAN) unveiled an expansion of its international network, that likely will include an order for +20 additional 787s, (CEO), Geoff Dixon said. New frequencies/routes announced this week are: A fifth weekly Sydney - Shanghai Pudong (PVG) flight, starting in August; a new twice-weekly Melbourne - (PVG) service aboard A330s, two additional Brisbane - Los Angeles (LAX) flights on 747-400s (increasing the service to daily), and one additional Sydney (SYD) - (LAX) flight, all in March 2008; a new 747-400 service to Santiago and an additional weekly (SYD) - Johannesburg flight beginning in November 2008. (QAN) will add three weekly Brisbane - Perth services in August, bringing frequency to 27-times-weekly.

June 2007: Qantas (QAN) sold its 4.2% stake in Air New Zealand (ANZ), which it acquired in early 2002 in association with the proposed Tasman Networks Agreement, that was scuttled by regulators. (QAN) said it acquired the shares at NZ$2.23 each and sold them at NZ$2.70. Following the sale, it said it "remained comfortable with its previous guidance that its 2006/2007 profit before tax, was in line with the average market expectations."

(QAN)'s announcement that it "remained comfortable with its previous guidance that its 2006/2007 profit before tax was in line with the average market expectations" has emerged as a de facto profit upgrade, the fourth this financial year. In March, the airline forecasted a +A$940 million/+$790.7 million pre-tax profit but robust traffic figures have had analysts preparing more bullish earnings. Bloomberg News calculated and announced that analysts are forecasting a median +A$1.06 billion profit, which was followed quickly by (QAN)'s announcement.

(QAS) announced an increase in its services to the USA beginning next March. It will boost Brisbane - Los Angeles (LAX) service to daily from five-times-weekly from March 27, and lift Sydney - (LAX) service to 17-times-weekly from March 30. Meanwhile, it plans to operate its Sydney - (LAX) - New York (JFK) flights on a daily basis beginning August 17.

Tiger Airways (TGR)'s impending entry into the Australian market is altering the dynamics of the country's route structure. Recently, (QAN) low-cost subsidiary Jetstar Airways (IMU) announced plans to operate on the major Sydney - Brisbane route from December. The move represents a departure from the convention of not linking major capital city airports, a policy that protected (QAN) from direct competition. (TGR)'s entry later this year onto major routes, plus the mammoth expansion solidified with an order for 50 additional A320s announced at the Paris Air Show, has changed the playing field. While (IMU) flies midday, it now is likely that (QAN) will alter the schedule to fend off (TGR). (IMU) also is expected to begin serving Melbourne Tullamarine' it currently operates out of Avalon.

A330-202 (842, VH-EBE), delivery to Qantas (QAS) for Jetstar International (IMU) operations.

July 2007: Qantas (QAN) said the level of foreign shareholding in the company has fallen to 44.5% from "just below" 50%. "Foreign shareholding is trending down and we are confident that our share register is in compliance with the (QAN) Sale Act," (CEO), Geoff Dixon said.

The Australian domestic market is heading for intense price competition as Singapore-based Tiger Airways (TGR) announced more domestic routes and fares for its Australian launch in late November. (TGR)'s latest route announcement is Melbourne - Launceston with fares starting at A$39.99/$34.87. Its Australian operation will be based in Melbourne, and destinations include Perth, Mackay, Rockhampton, Alice Springs and Darwin. (QAN) low-cost subsidiary Jetstar Airways (IMU) bettered the Launceston fare with a A$29 offering. However, it has yet to match (TGR)'s Melbourne - Perth fare of A$59.95 recently announced. (IMU)'s best fare for that 4-hour transcontinental journey is A$99, inclusive of all charges and taxes. (TGR) plans to launch its Australian service on November 23, with all announced destinations in operation by December 1.

(QAN) will establish an independent flight training business by year end with the aim of training 3,000 new pilots (FC) over the next 10 years. "We are in discussion with leading simulator manufacturers, aviation training organizations and financial partners," (CEO), Geoff Dixon said. The training company initially will operate from existing (QAN) training facilities in Sydney and Melbourne.

Amadeus said (QAN) became the first airline to roll out the Amadeus-developed "next generation load control system" known as Altea Departure Control. (QAN) (CIO), John Willett said the new system receives data direct from the airline's load planning, freight, fueling and airport information systems, removing existing manual processes.

(QAN) plans to add a fourth class - - premium economy (PY) - - on its A380s, (CEO), Geoff Dixon told "The Australian." The new seat may be introduced on other airplane types in the (QAN) fleet, he added.

+20 orders 787s, making the carrier the 787's #1 customer with 65 orders. (QAN) said its order for 20 included the conversion of 20 purchase rights into options. It now has firm orders for 65 787s, 20 options and 30 purchase rights. (CEO), Geoff Dixon said both the mainline and (IMU) will use the airplanes on domestic and international routes. (QAN) will take delivery of its first 787-8 in July 2008, with the first 15 earmarked for (IMU)'s international operations. The first 787-9 will arrive in 2011. "In line with the company's two-brand philosophy, subsequent deliveries will be allocated between (QAN) and (IMU) on the basis of the best returns for the Group," Dixon said.

(QAN) unveiled a radical overhaul of its international long-haul in-flight product ahead of the delivery of its first A380 in August 2008. A new premium economy class (PY), featuring 42-inch pitch, a new Panasonic In-Flight Entertainment (IFE) system, enhanced connectivity in all cabins, and upgraded lie-flat business class (C) beds are the main features of a makeover, that will be offered on the A380s and (QAN)'s 747-400s starting in February. The carrier will configure its A380s with just 450 seats - - 14 first class (F) "suites," 72 business (C), 32 premium economy (PY) and 332 economy (Y). First (F) and economy (Y) (3-4-3) will be on the lower deck with business (C) (2-2-2) and premium economy (PY) (2-3-2) on the upper deck.

The A380 will feature self-service bars and lounges in first (F) and business (C) classes, a self-service bar in premium economy (PY), and four such bars in coach (Y). All classes will have wireless connectivity, in-seat e-mail, Internet, telephone and (SMS), along with in-seat power, (USB) and R145 ports.

On the 747-400, premium economy (PY) will be on the main deck in a 2-4-2 configuration, which is how business class (C) started when (QAN) pioneered it in 1979. The airline will open dedicated business class (C) lounges in Sydney, Melbourne and Brisbane, by the middle of next year.

(QAN) also unveiled a sleeker, updated version of its iconic kangaroo logo, which it said "is a great fit for the tail of the A380 and other new-generation airplanes."

August 2007: A robust Australian economy fueled by resource demand from China helped propel the Qantas (QAN) Group to a record net profit of +A$719.4 million/+$595.4 million for the fiscal year ended June 30, despite a +19.1% increase in its fuel bill to A$3.3 billion. The profit was up +50% on the previous year's +A$479.5 million, and was boosted by revenue growth of +11% to $15.17 billion. Outgoing Chairman, Margaret Jackson said (QAN) generated a return above the cost of capital invested in all segments. The results include a A$47 million provision against liabilities, the company may incur in the USA for its alleged involvement in a freight cartel. Expenditure rose +8.5% to A$14.06 billion and operating profit soared +57.6% to +A$1.1 billion from +$698.6 million.

The (QAN) Group carried 36.4 million passengers, up +7% on the previous year, as (RPK)s passenger traffic rose +7.4% to 97.62 billion, and capacity grew +3.4% to 122.12 billion (ASK)s, lifting load factor +2.9 points to 79.9% LF. Passenger yield increased +6.9% to 11.69 cents. Star performer in the group was Low Cost Carrier (LCC) Jetstar Airways (IMU), where passengers jumped +31.8% to 7.6 million and load factor climbed +1.2 points to 75.25 LF.

(CEO), Geoff Dixon, said the result and (QAN)'s strong operating position were underpinned by the two-brand strategy. "We believe the transfer of 15% of marginal domestic and transtasman flying from (QAN) to (IMU), the transfer of (QAN) capacity to better performing domestic routes, and increased investment in the (QAN) product have improved the Group's [pre-tax] bottom line over the past three years by A$250 million," he said.

(QAN) also announced a A$1 billion, or 10% share buyback. Going forward, Dixon warned of "increasing levels of competition, with state-owned Middle East hub carriers poised to increase significantly their Australian capacity, new low-cost labor entrants Tiger Airways (TGR) and AirAsia X (ASW), and Virgin Blue (VOZ) commencing transpacific services in 2008."

He added that extension of (QAN)'s successful segmentation program, a process that was accelerated following the unsuccessful Airline Partners Australia (APA) bid, will be a major focus. "We believe we can unlock further value from our individual businesses and work is underway across the company, most notably in our Frequent Flyer, Freight, Fleet and Holiday divisions. We are looking at potential new ownership structures and strategic acquisitions and we expect to make announcements during the current financial year."

For the 2007 - 2008 year, Dixon forecast a +30% lift in operating profit given "no major deterioration in market conditions."

(QAN) will operate an eighth weekly Darwin - Singapore flight from the end of August until early November aboard an A330.

(QAN) finalized the first of three investment installments in Vietnam's Pacific Airlines (PAH), taking an 18% stake. The entire investment for 30% will be concluded over the next two years. Jetstar Airways (IMU) (CEO), Alan Joyce, and (CFO), David Hall will represent the Qantas (QAN) Group on (PAH)'s six-member board, while (QAN) and (IMU) executives will fill a number of key anagement roles to support the investment. Pacific (PAH) eventually plans to fly internationally.

Australia's Fairfax Media is reporting that (QAN) is set to announce that it will split into four separate businesses focusing on Airline Operations; Fleet Ownership & Lease; Loyalty Programs; & Freight.

(QAN) has set aside $40 million "to cover a potential fine that may be imposed" by the USA Department of Justice as part of the international investigation into price-fixing. (QAN) previously admitted it is under investigation in multiple jurisdictions regarding "price-fixing in the air cargo market" related to surcharges. "These investigations revealed that the practice adopted by (QAN) Freight and the cargo industry generally to fix and impose fuel surcharges, was likely to have breached relevant competition laws," (CEO), Geoff Dixon said. "To date, it has not been possible to quantify any direct or indirect liability associated with these matters." He conceded that a "small number" of (QAN) employees engaged in "unacceptable conduct" that made it possible (QAN) would have to pay fines. Dixon explained that (QAN) decided to put the money aside following guilty pleas earlier this month by British Airways (BAB) and Korean Air (KAL) related to price-fixing on fares and surcharges on both passenger and cargo flights. Those pleas led to the imposition of a combined $800 million in fines by the (DOJ) and, in the case of (BAB), also by the UK Office of Fair Trading. "At this stage, it is too early to make a reliable estimate of possible fines in [jurisdictions other than the USA] or of possible liability to third parties under class actions," Dixon said. "We expect these amounts will be known over the next two years." He said (QAN) had investigated the matter thoroughly and was "confident" the misconduct was "limited" to a small group of employees.

(QAN) reportedly will spin off its loyalty program in the mold of Air Canada (ACN)'s Aeroplan, which will become part owner of (QAN)'s Frequent Flyer program, according to newspaper reports in both countries. Neither (QAN), nor Aeroplan is commenting, but major media outlets in both countries reported that (QAN), while keeping a controlling stake in Frequent Flyer, will list it publicly on the Australian Securities Exchange in less than a year and is negotiating with Aeroplan to take a stake. The program is estimated to be worth A$3 billion/$2.5 billion. Aeroplan was spun off in 2002 and has about 5 million members. Expanding beyond air travel rewards to hotels, resorts and other consumer services, it is widely considered a major success. It reported second-quarter revenue of C$220.3 million/$209.1 million, up +20.7% over the year-ago quarter, with operating income ahead +51.2% to C$47 million.

(QAN) said it will spend more than >$50 million/$40 million upgrading its domestic terminal in Perth over the next 2 years. The proposed upgrades include bigger check-in areas, new security screening and an expanded bigger departure lounge. The number of passengers travelling through Perth airport has increased by more than one million in the past year. (QAN) spokesman Curtis Davies says the upgrade is needed. "I think the growth has caught a lot of people by surprise," he said. "We've been working with Western Australia Airport's Corporation for quite a while on this, and we're now ready to put in place the plans that we've been working on. Undoubtedly there has been a need to put more capacity into that market and more capability into the airport." The airport's Chief Executive, Brad Geatches, says the airport has experienced a +82 per cent increase in the number of passengers travelling through its terminals over the last five years, which has taken people by surprise. "That reflects the incredible health of the West Australian economy and our national economy generally, and it's being reflected in unprecedented demand for air services," he said. "The works that we are, undertaking in cooperation with (QAN), are necessary works they're certainly not bandage works."

(QAN) announced it will move all transcontinental flights connecting Perth to Sydney and Melbourne, to A330s and 767s, within two years. Seat capacity will climb nearly +25% as a result, which Executive General Manager, John Borghetti said "is a sign of our commitment to Western Australia, which is one of the biggest growth markets in Australia." (QAN) will increase its regional services from Perth (PER) as well. From next June, it will add five weekly flights to Karratha, replace five-times-weekly 717 service to Port Hedland with 737s, add three weekly 717 flights to Broome, and two weekly 717 frequencies to Newman. In January, (PER) - Hong Kong flights will transition to A330s from 767s, which will operate domestically.

(QAN) appointed Citigroup Global Markets Australia and UBS AG, Australia Branch to undertake the on-market buyback of about 10% of the company's shares. The purchase, is expected to begin next month.

Sabre Travel Network announced that (QAN) is the launch customer for Sabre Branded Fares (SBF), a tool it said will be "integrated into the standard travel agency desktop of its Global Distribution System (GDS)" and "enable the airline to package and brand a variety of fares featuring different attributes." Last week, Galileo unveiled a solution for Canadian travel agents, that would make Air Canada (ACN)'s a la carte fare products and Web-only content available on its (GDS). (SBF), part of the Sabre Merchandising Distribution Suite, will be tailored for other airlines as well. Stansted (STN) said it already is "working with additional airlines around the world to adopt these tools." VP Marketing, Hans Belle said the new technology "allow[s] for a flexible one-way fare structure, offering features beyond the normal fare rules and it also enables agents to easily locate and book the lowest fare available within a fare family."

(QAN) announced that Leigh Clifford, the recently retired (CEO) of UK and Australia-based mining company, Rio Tinto (RT), will replace Margaret Jackson as Chairman, when she retires in November. "I am personally delighted to be passing the mantle of (QAN) Chairman to someone of Leigh's caliber and look forward to working closely with Leigh to ensure a smooth transition on my retirement," Jackson said. Clifford was at (RT) for 37 years and became (CEO) in 2000.

Jamila Gordon, a former (IBM) executive, was named (CIO).

(QAN) (CEO), Geoff Dixon will quit (QAN) after his current contract expires in July 2009. Dixon said, "There is a time to move on, and I don't think the board or I would contemplate anything after the time we've said, unless there is something out there I don't see. I really do think it would be time to move on." He also forecast a bigger role for (QAN) low-cost subsidiary JetStar Airways (IMU), which will restore service to markets that (QAN) abandoned. "We're obviously moving it into international areas, and it will go into routes where we know (QAN) finds it very difficult to make money," he told viewers. "Places like Greece and Italy, I believe they can make that viable with the new airplanes they get in August [2008]. The 787s will enable a one-stop flight to Athens via Bangkok."

A330-202 (853, VH-EBF), delivery to Qantas (QAS) for Jetstar International (IMU) operations.

September 2007: Qantas (QAN) Group launched a comprehensive "carbon offset program" under which Qantas (QAN) and Jetstar (IMU) passengers can elect to offset their share of flight emissions by making monetary contributions through qantas.com and jetstar.com. Group (CEO), Geoff Dixon told media that the company has "undertaken a full lifecycle assessment of all operations, calculating the emissions associated with carrying a passenger from one point to another." Via the websites, passengers can use an "online calculator" that assesses flight data and "automatically advises customers of their emissions and the cost of offsetting them." Dixon added that Qantas Group is focused on achieving a CO2 savings target of more than >2 million tonnes by June 2011, through a range of initiatives, that it believes will set the airline up as an industry leader in cutting emissions. It has $20 billion worth of A380s (20) and 787s (65) on order and has launched a series of support programs to cut fuel consumption. These include establishment of a dedicated, businesswide environment and fuel conservation department; use of (RNP) procedures to optimize approach and departure tracks, and development of "User Preferred Routes" and introduction of "Variable Cost Index Flight Planning" for optimal speed based on daily variations in wind, temperature and weight.

Malaysian Low Cost Carrier (LCC) AirAsia (ASW) followed (QAN) into Vietnam by signing a letter of intent (LOI) to launch a budget airline in the country, in partnership with Vietnam Shipbuilding Industry Group, one of the nation's largest state-owned corporations, according to (ASW). Last month, (QAN) took an 18% stake in Vietnam Pacific Airlines (PAH), that eventually will rise to 30%. The joint venture carrier will serve domestic, regional and international routes and will have initial capital of approximately $30 million, (ASW) said. The (LOI) was signed by (ASW) (CEO), Tony Fernandes and VINASHIN Chairman & (CEO), Pham Thanh Binh at an event hosted by Vietnamese Prime Minister, Nguyen Tan Dung. "We are delighted to affiliate ourselves with VINASHIN as this scope delivers the initial momentum for both parties to begin our growth together. The growth potential in Vietnam's air travel market is significant, and we are very excited to be working with a colossal corporation in Vietnam to develop this opportunity," Fernandes said.

October 2007: Qantas (QAN) is matching Air New Zealand (ANZ)'s recent product initiatives, turning up the competitive heat in the NZ domestic market. Next month, (QAN) will introduce its successful Australian domestic "Cityflyer" product across the Tasman. Cityflyer provides passengers free beer and wine from 4 pm (noon in Australia), free newspapers, and an enhanced food offering. (QAN) also announced the addition of online check-in, "QuickCheck" self-serve kiosks, and a A$3 million/$2.7 million upgrade to its lounges in Auckland, Christchurch, and Wellington.

Meanwhile, (QAN) is adding a fifth 737 to its New Zealand operation. In August, Pacific Blue (PBI), the international arm of Australia's Virgin Blue (VOZ), said it will launch domestic services in NZ on November 15. (PBI) initially will use two 737-800s between Auckland, Wellington and Christchurch. New Zealanders enjoy consistently low fares, often starting from NZ$59/$45 on major trunk flights between Christchurch and Wellington, and (ANZ) has a daily "Grabaseat" product, that sells off spare seats from NZ$6.

(QAN) announced an order for 12 DHC-8-Q400s for regional subsidiary QantasLink (NJS), plus options and purchase rights for an additional 24. Firm order deliveries will begin in June 2008, and boost QantasLink (NJS)'s DHC-8-Q400 fleet to 21 airplanes. (QAN) (CEO), Geoff Dixon said the order is valued at A$400 million/$356 million and that the 72-seat airplanes are "central to QantasLink (NJS)'s growth strategy." The carrier will retire its 36-seat
DHC-8-100s by early 2010. It is forecasting annual capacity growth of +19% during the July 2008 to June 2010 period. It operates approximately 2,000 weekly flights aboard 49 airplanes to 50 destinations.

November 2007: Oneworld (ONW) members (CAT), British Airways (BAB), and Qantas (QAN) opened the first airport lounge developed as an "alliance project" in Los Angeles International Airport's international terminal.

(QAN) subsidiary, Jetstar International (IMU), which is based in Melbourne, Victoria, Australia, soon will open bases in Perth and Darwin to launch new services into Asia.

(QAN) will pay a $61 million fine to settle with USA authorities investigating the carrier's role in a widespread price-fixing scheme, related to fuel surcharges on international cargo flights, (CEO), Geoff Dixon announced. The fine is just over >50% higher than the $40 million (QAN) had set aside this summer. The company said at that time, that a "small number" of employees engaged in "unacceptable conduct" and that it anticipated a fine, following the announcement of large penalties levied against British Airways (BAB) and Korean Air (KAL). Dixon again acknowledged, "The practices adopted by (QAN) Freight and the cargo industry generally to fix and impose fuel surcharges breached relevant antitrust laws." There may be more to come, as (QAN) is the subject of "similar investigations . . . being undertaken by antitrust regulators in other countries, including Australia," Dixon said, adding that "more than >30 other airlines are included in these investigations." (QAN)'s plea agreement settled its liability in the USA, but excluded four past and two current employees of the Freight division who remain under investigation by the USA Department of Justice. The two current employees "deny involvement in any illegal conduct," the airline said. It noted that despite the discrepancy between the provision and the fine, it eventually will pay, it does not believe the $61 million penalty "or any further financial penalties" will have a material impact on future operating results.

(QAN) said it will buy 188 narrow-body airplanes to expand its shorthaul fleet for domestic routes and flights in Asia. (QAN) will buy 31 737-800s with options for 49 more airplanes. It will also buy 68 A320 and A321 (213Y passengers) airplanes with options for 40 more. (QAN) expects to acquire up to 17 A321s and will become the first to operate the variant in Australia. Geoff Dixon, (CEO) wants the expanded fleet to help defend the 65% of the Australian domestic market, controlled by his brands (QAN), and Jetstar International (IMU). The first A321s will be delivered in February, while the 737-800s will arrive during a six-year period starting in early 2009. The 737-800s will be delivered with state-of-the-art, In-Flight Entertainment (IFE). Dixon noted that the 737-800s, which will replace the last of its 737-400s, will have a -25% lower fuel burn per seat and -30% lower maintenance cost. Some of the A320s are earmarked for Pacific Airlines (PAH) in Vietnam, in which (QAN) is acquiring a 30% stake.

(QAN) firmed up its order for 12 DHC-8-Q400s plus 24 options and purchase rights, Bombardier said. The deal was announced last month. The airplanes will be operated by QantasLink (NJS). Four of the 12 firm airplanes are conversions of existing options, the manufacturer said. (NJS) currently operates seven DHC-8-Q400s and expects delivery of two previously ordered airplanes in January.

December 2007: Qantas (QAN) said it now expects its pre-tax profit for the fiscal year ending next June 30, will increase approximately +40% year-over-year, rather than the +30% forecast last August. It posted a +A$1.03 billion/+$907.8 million pre-tax profit in the 12 months ended June 30, 2007.

(QAN) and (MAS) Aerospace Engineering, a wholly owned subsidiary of Malaysia Airlines (MAS), signed a Memo of Understanding (MOU) to form a joint venture (JV) to provide airplane maintenance services from Malaysia. (QAN) (CEO), Geoff Dixon said the new company will target the rapidly growing Asia/Pacific (MRO) market, which is expected to reach $15 billion by 2016. It also will perform overflow airframe maintenance for (QAN) and its subsidiary airlines. Dixon said he was confident the companies would create a world-class yet cost-competitive (MRO). "(QAN) Engineering will have a significant input into the Management, Engineering and Quality system of the new company, which will commence operations in 2008," he said. (QAN) has for decades contracted overflow engineering work to a variety of (MRO)s in Asia, and the operation in Malaysia will provide it the opportunity to consolidate this work. The (JV) will complement the A$300 million/$257.8 million investment, (QAN) committed earlier to its Australian Engineering operations. "This venture reflects the (QAN) Group's objectives of growing our aviation-related businesses into growth markets in Asia and the Pacific," Dixon said.

(QAN) and Airbus (EDS) celebrated another major milestone in the (EDS)' relatively short but successful existence - the delivery of its 5,000th airplane, an A330-203 (593, VT-QPE), to (QAN) at a special ceremony in Toulouse. A330-202 (887, VH-EBG), delivery.

January 2008: 2007 statistics: 100.39 billion (RPK)s passenger traffic +10.4%; +5.1% capacity (ASK)s; +3.9 load factor for 80.9% LF (for year ending Nov 20, 2007). SEE ATTACHED COMPARISON CHART TO SELECTED OPERATORS - "QAN-2007-STATS."

February 2008: The impact of a softening global economy and high fuel prices apparently has yet to reach Australia, where Qantas (QAN) reported a profit of +A$618.1 million/+$566.4 million in the fiscal semester ended December 31, more than double the +A$307.3 million earned in the year-ago period. (QAN) is targeting a +40% year-over-year increase in full-year pre-tax earnings.

(QAN) will increase Melbourne - Hong Kong service to 10-times-weekly from daily from April 1, aboard an A330-300. Twice-weekly, Melbourne - Shanghai begins March 11. It will increase weekly, Sydney - Canberra frequencies by 15 to 157 in March and Melbourne - Canberra by 11 in March, and an additional four in June to 89. New frequencies will be operated by 737-400s.

(QAN)'s long-running dispute with its engineers (MT) has been resolved with a four-year "in principle" Enterprise Bargaining Agreement between (QAN) and the Australian Licensed Aircraft Engineers Association. The pact covers nearly 1,600 engineering (MT) employees. They had been lobbying for a +5% annual pay increase, but the new agreement settles at +3%, a figure that all other (QAN) unions have accepted.

The USA and Australia announced an "open skies" agreement in Washington at the conclusion of three days of negotiations. Australia becomes the USA's 90th "open skies" partner. The number of airlines from either country that can serve the other, once the agreement becomes effective, will be unlimited, as will the number of flights permitted. Restrictions on pricing, code sharing and charters also were removed. Limitations on cargo services were removed in 1999, the USA Dept of Transportation said. Australian carriers were quick to laud the accord. (QAN) operates 48 weekly flights on the transpacific route, increasing to 51 next month. Virgin Blue (VOZ) (CEO), Brett Godfrey, whose carrier is preparing to launch its V Australia (VAZ) long-haul subsidiary, and will take delivery of the first of 14 777-300ERs this fall, called the deal "a great achievement, and a significant change after almost twenty years of restrictive bilaterals."

(QAN) will hire +900 new long-haul flight attendants (CA) by year end in the first phase of what it calls "its largest ever cabin crew (CA) recruitment drive." (CEO), Geoff Dixon said (QAN) will continue to build its full-time cabin staff (CA) numbers through 2010, at which point it expects to have approximately 2,000 new flight attendants (CA) working on its A380s, 747s, and A330s.

Airways New Zealand, Airservices Australia, and the USA (FAA) signed a trilateral agreement to accelerate development of air traffic control (ATC) procedures among the three countries, that will reduce aviation's environmental footprint. Dubbed Asia & South Pacific Initiative to Reduce Emissions (ASPIRE), the accord aims to provide a regional platform for a host of technologies pioneered by the trio.

Oneworld (ONW) airlines will begin bringing all operations together at Beijing International in the airport's vast new passenger terminal. British Airways (BAB) and (QAN) will move on February 29, while the alliance's other members serving Beijing: (Cathay Pacific (CAT), Dragonair (DRG), Finnair (FIN), and Japan Airlines (JAL)) will transfer into Terminal 3 on March 26. The six Oneworld (ONW) carriers will use check-in desks in the terminal's Area C.

March 2008: Qantas (QAN) (CEO), Geoff Dixon announced a hiring freeze across the airline group. "At current market prices, our fuel bill for the next financial year will be more than >A$1 billion higher than for this current year." "The Age" claimed (QAN) will find itself at a competitive disadvantage with rival Virgin Blue (VOZ), which is 70% hedged for the next financial year at $76 per barrel. The paper added that some Australian analysts are wondering why (QAN) issued the warning to staff but not shareholders and/or the market.

(QAN) announced it will increase its USA service to a record 47 weekly flights beginning April 5. It will add a sixth and seventh weekly Brisbane - Los Angeles (LAX), a 17th-weekly Sydney (SYD) - (LAX) and a fourth-weekly (SYD) - Honolulu.

(QAN) will launch its first nonstop South American service, a thrice-weekly, Sydney - Buenos Aires on November 24 aboard a 747-400.

(QAN) introduced into service its first airplane, a 747-400 fitted with a premium economy (PE) cabin. Executive General Manager Technology & Services, John Borghetti said the product will be installed in all of (QAN)'s 747-400s and A380s. It will be available initially on Sydney - Hong Kong 747-400 service, with London Heathrow and Johannesburg coming on line as three more 747-400s are outfitted later this month. The (PE) cabin has 32 seats in a 2-4-2 configuration. Pitch is 42 inches and the seats, designed by (QAN) Creative Director, Marc Newson, are 19.5-inches wide. (QAN) was the first airline to offer a business class (C) in early 1979 with a configuration identical to the new (PE) product. It used DC-9 first class (F) seats for the business offering and quickly was matched by Pan American World Airways (PAA) and Trans World Airlines (TWA).

Beijing Capital International Airport's new $3 billion-plus Terminal 3 opened. UK architect, Norman Foster claimed it is the largest covered structure ever built (3.25 km long and 1.3 million sq m of floor space). Construction began in March 2004. The airport said the three-concourse facility welcomed Shandong (SHG), Sichuan Airlines (SIC), (QAN), Qatar Airways (QTA), British Airways (BAB), and El Al (ELA). A second move is scheduled for March 26 when Air China (BEJ), Shanghai Airlines (SHA), (SAS), Austrian Airlines (AUL), Lufthansa (DLH), Asiana Airlines (AAR), Air Canada (ACN), United Airlines (UAL), (ANA), Thai Airways (TII), Singapore Airlines (SIA), Finnair (FIN), Cathay Pacific Airways (CAT), Japan Airlines (JAL), Dragonair (DRG), Turkish Airlines (THY), Emirates (EAD), Air Macau (MCU), S7 Airlines (SBR), and EgyptAir (EGP) will transfer to the new building. "Reuters" reported that airport capacity will be boosted to 76 million per year from the 52 million it served in 2007. The baggage system can handle 19,800 pieces per hour.

(QAN) plans to allow domestic customers to use e-mail and Short Message Service (SMS) functions on their mobile phones and Personal Digital Assistants (PDA)s, beginning later this year. The decision follows a trial on board a 767-300 that ran from April 2007 to January. The technology will be installed on "a number" of domestic 767-300s and A330-200s. "The evaluation of this new technology was a great success," Executive General Manager, John Borghetti said. Qantas (QAN) worked with "AeroMobile" on the project. Passengers wanting to send or receive (SMS) will require a (GSM) phone, and a global roaming account, while those desiring e-mail will need a (GPRS)-enabled device, (QAN) said.

Boeing (TBC)'s Airplane Health Monitoring (AHM) software was ordered by (QAN) for its fleet of 30 747-400s to better evaluate in-flight data and manage unscheduled maintenance events. (QAN) also will use (AHM) for its 65 787s. More than >44% of the world's 777 and 747-400 fleets are covered by (AHM) technology.

April 2008: Vietnam's "Pacific Airlines (PAH)," in which the Qantas (QAN) Group purchased an 18% stake with an agreement to raise that holding to 30% in 2010, will change its name to "Jetstar Pacific (PAH)" as part of a partnership with (QAN), that will see it become "Vietnam's first low-cost, value-based airline." The name change will take effect May 23 and is part of a new business service agreement under which Pacific (PAH) will operate domestic and international flights under the Jetstar (PAH) brand, while "providing everyday low fares and a standardized customer experience." It will take delivery of up to 30 A320s by 2014, with the first "proposed" to enter service this August. The Qantas (QAN) Group placed a large Airbus (EDS) order last fall. The deal also includes development of a Vietnamese website and "new commercial and distribution agreements," Jetstar (IMU) said. "Jetstar Pacific (PAH) will be able to access and leverage the significant expertise and resources within the Qantas (QAN) Group that will help enable its planned future growth," (QAN) (CEO), Geoff Dixon said. "This includes the placement of (QAN) and Jetstar (IMU) executives in key management roles within (PAH) and the supply of a range of aviation services."

(QAN) initially invested in (PAH) one year ago. It currently serves seven domestic destinations with four 737-400s, but plans eventually to increase its 130 weekly flights eightfold. It will start by adding service from Ho Chi Minh City to Da Lat and Buon Me Thout, and from Hanoi to Da Nang, Hue, and Cam Rahn. It also will expand its Ho Chi Minh - Hanoi service. Jetstar Airways (IMU) currently offers flights to Ho Chi Minh from Sydney and Singapore.

The Qantas Group expects its first 787-8 to arrive 15 months late and its first 787-9 to be delivered 15 to 23 months late. It said it is "entitled to substantial liquidated damages" under its contract with Boeing (TBC) and that it would use those funds to offset the cost of lease agreements required to "ensure sufficient capacity for the needs of all our airlines in the coming years."

Regarding the "Open Skies" bilateral agreement between Australia and the USA, please read the attached - "QAN-AUS-USA-APR08."

June 2008: Qantas Airways (QAN) 2007/2008 = net profit of +$923 million/+$640 million.

July 2008: Qantas Airways (QAN) (CEO), Geoff Dixon said he believes the airline industry is on the verge of a period of consolidation into a few very large carriers that will be able to cope better with higher fuel costs. Dixon claimed that a "new aviation world order" is coming, according to the "Australian Associated Press (AAP)." "Right now, the global aviation industry faces not just a shock or indeed a blip or indeed a crisis really but a permanent transformation," he said. A critical step toward that future may come thanks to second-stage "open skies" negotiations between the USA and the European Union (EU). "The (EU)'s push for the abolition of foreign investment restrictions has so far, believe it or not, been resisted by the USA, which limits foreign ownership of its airlines to 25% of total voting stock,'' Dixon said. But there are signs, he claimed, that the Americans may be prepared to accept airlines from Europe and potentially other countries based on their principal place of business, rather than strict ownership criteria. "For us, this would be a groundbreaking development,'' he said. "It would open the way for airlines to engage in meaningful cross-border investments, and sooner or later, it will happen. And we believe strongly at (QAN) that over time, consolidation will transform aviation . . . It will produce a few very large and extremely efficient global airlines with a portfolio of interests and a portfolio of brands."

INCDT: A Qantas (QAN) 747-448 (857-25067 /91 VH-OJK "Newcastle) was forced to make an emergency descent and diversion to Manila, Philippines, on July 25 after a large section of its fuselage separated, resulting in rapid decompression. The 747 was operating flight QF30 frpm Hong Kong to Melbourne, and while cruising at 29,000 ft/8,840 m, suffered a hole in its fuselage. The Australian Transport Safety Bureau said :A section of fuselage separated in the area of the forward cargo compartment." There were no reported injuries. SEE ATTACHED PHOTO & ARTICLES- - "QAN-INCDT-JUL08/A" which show that the starboard wing-to-body fairing in the area of the air-conditioning duct intake was also damaged. All 346 passengers and 19 crew (FC)/(CA) were able to disembark safely after the landing, (QAN) said, adding that no injuries were reported.

The explosion sent a shockwave and debris through the cabin as floor venting, which became industry standard in widebody airplanes after the DC-10 crash in Paris in 1974, dampened the explosive effect. There were reports of a partial collapse of a section of the cabin floor above the explosion.

The Australian Transport Safety Bureau (ATSB) released a preliminary report on its investigation of the decompression and fuselage hole incident, saying it is "evident that one passenger oxygen cylinder had sustained a sudden failure and forceful discharge of its pressurized contents into the [forward] airplane hold, rupturing the fuselage in the vicinity of the wing-fuselage leading edge fairing." It added, "The cylinder had been propelled upward by the force of the discharge, puncturing the cabin floor and entering the cabin adjacent to the second main cabin door. The cylinder had subsequently impacted the door frame, door handle and overhead paneling, before falling to the cabin floor and exiting the airplane through the ruptured fuselage." The (ATSB) said the airplane made an "uneventful visual approach and landing" at Manila, to which it had been diverted, and that safety did not appear to be compromised despite the cylinder explosion.

(QAN) (CEO), Geoff Dixon said (QAN) completed an inspection of the oxygen systems across its 747-400 fleet, "which confirmed there were no safety issues." He also said the 747-400 that landed in Manila with a hole in its fuselage "was repairable at a cost of less than <A$10 million/<$8.6 million and will be back in service in November 2008."

(QAN) plans to retire 22 older airplanes, and won't grow capacity in the fiscal year ending June 2009.

August 2008: Qantas (QAN), which code shares with South African Airways (SAA), is adding an additional weekly frequency to Johannesburg from Sydney in December, meaning it will fly the route six times a week. (QAN) also said it intends to up that to daily service.

(QAN) is understood to be moving toward an order for the 365-seat, 777-300ER as Boeing (TBC) pulls out all stops to thwart a commitment to the rival A350-1000. The order, if submitted to and ratified by (QAN)'s board, would be for 15 airplanes with deliveries as early as 2011. (CEO), Geoff Dixon confirmed the airline's interest in the 777-300ER. "We have airplane orders of A$35 billion/$30 billion in place, and are in discussions with the manufacturers about options for the replacement of 747-400s not covered by our A380 order. This does include the 777-300ER" he said.

(QAN) has 20 A380s on order and a fleet of 24 747-400s and six 747-400ERs, for which it was the only customer. It has been pressing Boeing (TBC) for some time about improvements to the 777-300ER. Earlier this month, on the first commercial flight of (EAD)s A380, Clark said that the 777-300ER upgrade would see a further +10% improvement in fuel burn.

Boeing (TBC) has been weighing its response to the A350 for some time, while balancing the need to wait for hard performance numbers from the 787 structural test program. The Qantas Group has ordered 65 of the smaller 787s.

The A350 series has emerged in the past year as a potent competitor to both the 230/280-seat 787 and the 777, although delivery of the largest model, the A350-1000, will not begin until 2015. The 777-300ER and A350-1000 each burn approximately -20% less fuel per passenger than a 747-400.

September 2008: Australia's Civil Aviation Safety Authority (CASA) wants Qantas (QAN) to implement a range of improvements to the way it manages and delivers airplane maintenance, following a special review carried out last month. The (CASA) called on (QAN) to produce a plan to address deficiencies in meeting some of its own maintenance performance targets. It also wants (QAN) to examine whether existing lines of authority and control over maintenance are delivering the best results. "The (CASA) is confident Qantas (QAN) will act quickly and appropriately to address the issues and this will ensure Australians can continue to have full confidence in the airline."
While these further reviews are underway, (CASA) will be conducting two additional intensive audits of (QAN). The first will be a full maintenance audit of both documentation and actual work on one airplane of each major type in the (QAN) fleet - - a 747-400, 737-400, and 767-300. The second will focus on the effectiveness of the company's maintenance systems in managing and implementing airworthiness directives (AD)s. (CASA) said this process will identify any weaknesses in (QAN)'s systems in relation to managing its fleet's airworthiness. The review found maintenance performance within (QAN) is showing some adverse trends and is now below the airline's own benchmarks. By taking action now, future safety problems will be avoided." However, the review found no direct links between recent safety incidents that included the 747-400 oxygen bottle failure near Manila, nor any increase in the rate of incidents. (CASA) said they were unrelated events and that there was no apparent common cause. It also said that overseas maintenance had no impact on the airline's performance.

(QAN) (CEO), Geoff Dixon said the carrier will work closely with (CASA) to implement any recommendations contained in its review. He noted that (QAN) recently passed an (IATA) (ITA) Operational Safety Audit (IOSA) and that in June, (CASA) renewed its Air Operator's Certificate (AOC) for another three years.

1st A380-841 (014, VH-OQA "Nancy-Bird Walton"), delivery. (QAN)'s configuration will have the lowest passenger count of any A380 operator with just 450 seats, including 332Y economy seats. (QAN) announced that it is likely to add to the 20 of the type it already has on order. (CEO), Geoff Dixon and his successor, Alan Joyce, made clear that a new order is a virtual certainty, though Dixon qualified that any order would have to be within (QAN)'s current A$35 billion/$27.9 billion budget for capital spending on airplanes, meaning that it may be interested in airplane swaps with Airbus (EDS). The Qantas (QAN) Group last year ordered 60 A320s/A321s for Jetstar (IMU). Dixon said that the A380 is a "perfect fit" for the airline's long-haul flying, with Joyce adding that it "ticks all the boxes for us." One box both executives are hoping it will tick is improved public relations. Dixon conceded that (QAN)'s recent run of maintenance problems has damaged the brand, partiularly in Australia. "Our own research indicates the brand has been impacted, but all our research says it's knee-jerk and we hope [starting A380 service] will be a circuit breaker and forerunner for better publicity," he said. Dixon and Joyce were eager to show media the interior of (QAN)'s first A380, hoping to dispel criticism voiced earlier this year that flash photos made it appear more like that of a military transport. However, the interior in natural light had an elegant quality. The first class (F) seats, which are on the main deck, are more traditional than those in A380s operated by Singapore Airlines (SIA) and Emirates (EAD), but also more spacious than typical first class (F) seats. Business class (C) features (QAN)'s Skybed seats. The carrier is due to receive two more A380s this year, and another five next year.

Airbus (EDS) reiterated that it will meet its promise of delivering 12 A380s this year. President & (CEO), Tom Enders was emphatic when addressing reporters in Toulouse: "The target is 12. I confirmed it two days ago, I confirm it today, and I bet a magnum of champagne. Will anyone take me on?"

(QAN) received its first A380 two years behind the original delivery schedule, causing a reshuffling of its fleet; it already would have 8 to 12 A380s, if the original schedule had been met, and has been forced to keep an assortment of 747-300s and 767s far longer than anticipated.

(QAN) Executive General Manager, John Borghetti told a cheering crowd of more than >4,000 Qantas (QAN) staff that the airline's new A380 will give it an edge over the competition. "We are exceptionally confident that the product we have on the A380 will last for years and I think it will be the envy of many airlines," he told employees and their families in Sydney, where (QAN)'s first A380 landed. The A380 was piloted on the Singapore - Sydney leg by Captain Peter Probert, whose late father Roly piloted (QAN)'s first 747 into Sydney in 1971.

October 2008: Qantas (QAN) and British Airways (BAB) both admitted to violating Australian competition laws relating to air cargo fuel surcharges in 2002 through 2006, and reached agreement with the Australian Competition and Consumer Commission (ACCC) to pay fines of A$20 million/$12.2 million and A$5 million, respectively. "(QAN) apologizes unreservedly for the conduct of the employees involved," (CEO), Geoff Dixon said. (BAB) said it "has a longstanding competition compliance policy and it is highly regrettable that this policy was not adhered to in relation to fuel surcharges on the carriage of cargo."

(ACCC) Chairman, Graeme Samuel said, "The airlines are the first to be proceeded against in Australia, because both came forward and voluntarily made admissions under the (ACCC)'s cooperation policy. The (ACCC) continues to investigate other airlines, some of which are assisting voluntarily, while others are not. The (ACCC) expects to be able to resolve its investigations with other cooperating airlines shortly." The commission said the penalties "reflect the serious nature of the cartel contraventions and, in the case of (QAN), its very large share of the Australian segment of the market." But it added that the fines are also not as high as they could have been owing to the carriers' cooperation.

The settlements are just the latest in the wide-ranging, multination probe of air cargo surcharges allegedly imposed in a collusive manner earlier this decade. (QAN) and (BAB) both already have reached settlements with the USA Department of Justice.

Next month (QAN) will fly Sydney - Buenos Aires nonstop.

Amadeus said (QAN) completed migration to its Altea Customer Management System streamlining sales, reservations, inventory and departure control management capabilities. Migration "is an unprecedented milestone in the industry and makes (QAN) the first to become fully operational on the entire Altea platform," the company said.

INCDT: A Qantas (QAN) A330-300 on its way from Singapore to Perth experienced severe turbulence and diverted to Learmonth, about 700 miles north of its destination, with dozens injured. At least 10 were hospitalized in Exmouth, with (QAN) confirming that both passengers and crew suffered "fractures and lacerations . . . following a sudden change in altitude." There were 303 passengers and 10 crew (FC)/(CA) on board, and local media were reporting that up to 50 were hurt. (QAN) dispatched two 717s from Perth to pick up passengers, as the A330 was grounded for inspections. It said there were "no details available at this stage as to what caused the altitude change."

The (QAN) A330-300 turbulence incident that injured 71 of 313 passengers and crew, likely was caused by a computer malfunction, the Australian Transport Safety Bureau (ATSB) said. The airplane, on its way to Perth from Singapore before diverting to Learmonth, suffered "some irregularity" with its elevator control system, that caused the dramatic altitude change, according to (ATSB) Director Aviation Safety Investigation, Julian Walsh. The A330 climbed some 300 ft and then nosedived. Investigators are focused particularly on what inputs may have caused the violent pitchdown that caused the injuries.

Airbus (EDS) issued an Operators Information Telex to all operators of its airplanes in the wake of the Australian Transport Safety Bureau (ATSB)'s investigation into the (QAN) A330-300 incident on October 7. The instruction advises flight crews (FC) to shut down the entire Air Data Inertial Reference Unit No 1 in case of partial failure, which would isolate both (IR) and (ADR) to prevent the (ADR) from continuing to provide erroneous data. The A330 has three (ADIRU)s. The (ATSB) found that "the airplane was flying at FL370 with autopilot and autothrust system engaged, when an inertial reference system (IRS) fault occurred within the (ADIRU) 1, which resulted in the autopilot automatically disconnecting." However, with the autopilot off, the flight control computers still command control surfaces to protect the airplane from unsafe conditions such as a stall. The (ATSB) said, "The faulty (ADIRU) continued to feed erroneous and spike values for various airplane parameters to the airplane's flight control primary computers, which led to several consequences including: False stall and overspeed warnings, loss of attitude information on the captain (FC)'s primary flight display and several electronic centralized airplane monitoring system warnings."

According to the Bureau, "About two minutes after the initial fault, the (ADIRU) 1 generated very high, random and incorrect values for the airplane's angle of attack, which led to the flight control computers commanding a nose-down airplane movement, which resulted in the airplane pitching down to a maximum of about 8.5 degrees and the triggering of a flight control primary computer pitch fault. The (ADIRU) 1 continued to generate random spikes and a second nose-down airplane movement was encountered later on, but with less significant values in terms of the airplane's trajectory."

The (ATSB) is continuing its investigation and arrangements are being made for the units to be sent to Northrop Grumman (GRU) Litton in the USA for further study.

In an extraordinary twist, the A330 incident occurred just north of where a Malaysia Airlines (MAS) 777-200ER suffered a similar upset on August 1, 2005. In that incident, the 777 with 177 passengers and crew aboard was 240 km northwest of Perth, climbing through 38,000 ft, when it pitched up to 41,000 ft and airspeed decreased from 270 to 185 kt, activating the stall warning and stick-shaker. The flight crew (FC) battled the autopilot and autothrottles for some minutes before the captain (FC) disconnected the autopilot and returned the airplane manually to Perth. A fault was found in the software that allowed inputs from a known faulty accelerometer to be processed by the (ADIRU)s and used by the primary flight computer, autopilot and other airplane systems. The incident resulted in an (FAA) Airworthiness Directive (AD) (2005-18-51).

A final report on this incident was released in December 2011 as follows:

A rare computer glitch has been blamed for the 2008 turbulence incident that injured 119 passengers and crew on Qantas (QF) A330 flight 72 from Singapore to Perth.

The Australian Transport Safety Bureau (ATBS), which issued its final report, found that while the airplane was cruising at 37,000 ft, one of its three air data inertial reference units (ADIRUs) started outputting intermittent, incorrect data (or spikes) on airspeed, altitude, air pressure, temperature and the flying angle to the primary flight computers controlling the flight.

Within two minutes, the autopilot disconnected, and five seconds later, the pilots (FC) began receiving spurious cockpit alarms and alerts about stalling and overspeed warnings, along with fluctuating airspeed and altitude readings.

The A330 descended 150 ft in two seconds as part of a 690 ft, 23-second dive. Sixty passengers were not wearing seat belts, and standing crew and passengers hit the ceiling. Two minutes later, the airplane plunged again, diving 400 ft in 15 seconds. In all, 119 passengers and crew were injured with 12 sustaining serious injuries; 39 people required medical treatment.

The (ATSB) found that while the algorithm for processing (ADIRU) data was “generally very effective, it could not manage a scenario where there were multiple spikes that were 1.2 seconds apart.”

According to the (ATSB) report, the occurrence was the only known example where this design limitation led to a pitch-down command in more than >28 million flight hrs on an A330/A340 airplane. Airbus (EDS) has redesigned the algorithm to prevent the same type of accident from occurring again.

After three years of testing, the (ATSB) has been unable to precisely identify the reason for the data spikes.

As well as altering the algorithm, the (ADIRU) manufacturer, Northrop Grumman (GRU), has modified the (ADIRU) to improve its ability to detect data transmission failures.

"As a result of the redesign, passengers, crew and operators can be confident that the same type of accident will not reoccur," investigators concluded.


(QAN) launched A380 service to the USA West Coast, when its inaugural Melbourne (MEL) - Los Angeles (LAX) flight, QF93, departed Australia at 11:15 am local time and landed at (LAX) at around 7:30 am. QF94 was scheduled to depart (LAX) later. (QAN) will operate its first Sydney - (LAX) A380 flight this month and it said using the A380 on routes to the USA is "a mark of its commitment to growing the transpacific market." It currently offers 47 weekly flights to the USA.

(QAN)'s A380 features 450 seats: 14F in first, 72C in business, 32 in premium economy, and 332Y in economy. It will have three A380s by year end, and eight in service by the close of 2009. At that point, it will offer daily A380 flights between (MEL) and (LAX). Its entire order for 20 - - the second-largest commitment to the airplane - - is scheduled to be delivered by 2014.

(CEO), Geoff Dixon said service to London Heathrow, via Singapore will commence in January. This latest flight also marked the North American debut of the Rolls-Royce (RRC) (Trent 970).

As the strike by the International Association of Machinists (IAM) and Aerospace Workers appeared to be concluding, Boeing (TBC)'s largest airline customer for the 787, the Qantas (QAN) Group, confirmed that its first 787 Dreamliner could be up to an additional six months late.

Jetstar Airways (IMU) executives said that (IMU)'s first 787 is not expected until May 2010, 21 months later than the original schedule. A spokesperson added, "Based on what we have been told, we are working on contingencies and planning for a further three-to-six-month delay in our delivery, although Boeing (TBC) is yet to formally confirm that." The lag is far longer than the 54-day (IAM) strike and confirms a report last month that there has been further slippage in the program, possibly due to brake control issues.

Jetstar (IMU) and (QAN) have ordered 65 787s, with the original schedule calling for the first 15 to arrive one per month at Jetstar (IMU) from August 2008. When Boeing (TBC) announced its third program delay last April, (IMU)'s first delivery, ship 21, had slipped 15 months to November 2009.

First flight, and thus first delivery, have been complicated and delayed further by the machinist strike.

Boeing (TBC) Chairman, President & (CEO), Jim McNerney said that the 787 was "on schedule" for a fourth-quarter test flight "pre-strike." He said the supply chain "largely healed up" and had caught up before the (IAM) walked out on September 6. But ongoing production problems have delayed the planned ramp-up as well as first flight and delivery, with some delivery delays stretching to two years. Launch customer (ANA) confirmed that the ambitious production ramp-up schedule will not be achieved. It suggested that its first airplane would arrive next August, but that now appears to have slipped to early 2010.

November 2008: Qantas (QAN) warned that its full-year pre-tax profit may fall -64% from its previous guidance of +A$1.4 billion/+$888.1 million to +A$500 million for the current fiscal year ending June 30, 2009, nearly halving the +$A970 million earned in the 12 months ended last June 30. Responding to the economic downturn, (QAN) also announced fleet changes that effectively ground 10 airplanes attached to its international operations. "By taking this action now, we will have the flexibility to switch growth back on as soon as market conditions improve," (CEO), Geoff Dixon said. "We are in unpredictable times and the international business market, in particular, has slowed." He said the economic and industry downturns principally have affected (QAN)'s mainline international operations and that its domestic flights, Jetstar Airways (IMU), Qantas Frequent Flyer and Qantas Freight divisions "all continue to perform well."

The company will not take up the planned lease of two A330-200s, will change flying patterns of existing airplanes to free up the equivalent of six 747-400s, three 767-300s and one A320-200 between now and mid-2010, and will halt all planned domestic market growth for both (QAN) and (IMU). Its fuel bill will be A$750 million higher than last year. "Our actual flying in the next six months will be -4% below the equivalent period in 2008," Dixon said, adding that (QAN) will seek "further efficiencies by implementing an accelerated leave program" but will not add to its previously announced reduction of -1,500 jobs

(QAN) launched thrice-weekly, Sydney - Buenos Aires flights aboard a three-class 747-400.

(QAN) outgoing (CEO), Geoff Dixon told "The Sunday Telegraph" in Sydney that (QAN) is fortunate that last year's A$11.1 billion/$7.19 billion private equity bid by Airline Partners Australia (APA) failed. "I'm very pleased now it didn't happen," Dixon told the newspaper. "The real issue I'd never repeat, was having the management - - myself and the management - - involved in it." The (APA) consortium launched its bid in November 2006, and Dixon said the deal was "clouded by emotion" because of the significant personal gains on offer to (QAN) management. One of (APA)'s lead partner's, Melbourne's Allco Finance, went into receivership this month, with debts of more than >A$1.1 billion. The May 2007 failure of the (APA) takeover, hastened the retirement of former (QAN) Chairman, Margaret Jackson, while (CFO), Peter Gregg was passed over to replace Dixon and is leaving the airline next February.

December 2008: British Airways (BAB) and Qantas (QAN) are exploring a potential merger "via a dual-listed company structure," both carriers confirmed in a brief statement responding to recent speculation. The Oneworld (ONW) partners warned that there is "no guarantee that any transaction will be forthcoming" and did not offer any timeline for a possible transaction. Revelation of the merger discussions coincided with the publication of a proposal by the Australian government to relax the rules of foreign ownership in (QAN). The plans will not permit a full takeover of the flag carrier but will allow a single foreign entity to own up to 49%. Currently, a single foreign entity can own only 25% and a group of foreign entities or airlines can hold up to 35%.

(BAB) bought a 25% stake in (QAN) in early 1993, for A$665 million/$429.7 million, two years before (QAN) floated. A 2002 rights issue subsequently diluted (BAB)'s stake to 18.25%. It sold its shareholding in 2004, and used the gross proceeds of A$1.1 billion to pay off part of its debt.

The pair operates a revenue-sharing joint venture on the so-called 'kangaroo route' between the UK and Australia, under which they jointly organize capacity, schedules, sales, and operations.

The proposed merger of (BAB) and (QAN) already is generating controversy in Australia, some 19 months after similar sentiments helped derail a leveraged buyout of (QAN) by a multinational consortium. The Australian government issued a new aviation policy proposal raising the amount a single overseas interest could take in (QAN) to 49% from 25%, but the governing Labor party remained concerned that (BAB)'s tie-up with (QAN) could be a de-facto takeover. "Were that to be the case, the government would certainly not support it," Minister for Infrastructure, Transport, Regional Development & Local Government, Anthony Albanese told "ABC Radio." "Whilst (QAN) and (BAB) have put out a statement confirming these talks, they're far from reaching a conclusion and the outcome [is] far from certain," he added, stressing that it has been "made clear" to (QAN), that its arrangement with (BAB) must adhere to national law. The Treasurer of Australia, Wayne Swan said, "Our bottom line is the 'Flying Kangaroo' remains majority Australian-owned and based," "Reuters" reported.

Warren Truss, leader of the opposition National Party, told ABC's "The World Today" that "if one company owns up to 49% of (QAN), then they would have effective control. Indeed, they would achieve effective control at a level much lower than that, and Australians would want to be certain that they still had an airline that would put the interests of this country first and that their capacity to serve Australia was not compromised." Local editorials and public opinion polls also suggested opposition to the merger.

(QAN) (CEO), Alan Joyce warned that there is "no guarantee" of any deal with (BAB) and there will be no three-way combination including Oneworld (ONW) partner and (BAB) merger target, Iberia (IBE).

In his first public speech since taking over as (CEO), Joyce told attendees at the Australia-Israel Chamber of Commerce luncheon in Sydney that there are "a number of significant matters that still need to be resolved, including agreeing on an appropriate merger ratio and resolving issues around (BAB)'s pension fund and the broader economic outlook." He claimed that the potential tie-up would give (QAN) "global scale," allowing it to "grow and enhance" its services and "deliver significant revenue and cost synergies." But the carrier does not need (BAB), he added. "(QAN) comes to these negotiations from a position of strength. We will only proceed with this transaction if we are assured that it will maximize value for (QAN) shareholders." The new CEO also moved to allay Australian concerns regarding foreign influence at (QAN). "There's been a bit of fear and loathing about what participating in global consolidation might mean for (QAN). What I can say to all Australians is this: Whatever happens, (QAN) will remain majority Australian-owned. The vast majority of our employees will always be Australian, and Australia will remain our headquarters."

However, those comments may be too late, as opposition against the deal continues to gain momentum, with virtually all domestic business commentators and analysts giving it the thumbs-down.

Following the speech, Joyce told reporters that there will be no three-way deal including (IBE), according to "Bloomberg News." "(BAB) are conscious, as (IBE) are and we are, that only one of the transactions could take place. When you explore dialogue with any carrier, the likelihood is that the carrier has multiple dialogues going on; that's the way it takes place."

The Australian government had expressed serious reservations, saying that an agreement could mean a de facto takeover of (QAN) by (BAB) that it would not support.

The Federal Court of Australia upheld the A$20 million/$13.2 million fine imposed on (QAN) for its role in an international cartel that colluded on air cargo fuel surcharges between 2002 and 2006. The Australian Competition and Consumer Commission (ACCC) reached a settlement with (QAN) and British Airways (BAB), which was fined A$5 million, in October. (ACCC) Chairman, Graeme Samuel said that the penalty reflected the seriousness of the contraventions and (QAN)'s large share of the market. ''Cartels, particularly those that are engaged in by large businesses with broad application over a period of time, have a significant effect on consumers," Samuel told reporters. ''They are an unseen fraud on the community that must be uncovered and punished." However, former (QAN) CEO, Geoff Dixon said that the airline was using the industrywide fuel surcharge chart established by (IATA) (ITA) without knowing that it was outlawed by regulators around the world. Samuel lauded (QAN) for its admission of guilt. In a statement, he said, "Its behavior after learning of the conduct in its freight division has set a standard we would hope all companies finding themselves in a similar position would follow."

(MAS) is in talks with (QAN) regarding some kind of partnership and intends to "pursue strategic partnerships to create additional value," CEO, Idris Jala confirmed in a statement cited by widespread press reports. "We are in talks with a number of airlines, including (QAN). This ranges from joint ventures and code shares to interlining partnerships. More details will be announced as and when we have finalized the terms of any of these partnerships," Jala said.
Rumors of an (MAS)/(QAN) relationship gained steam after (QAN) and (BAB) revealed their merger discussions.

A bogus (Qantas aircraft engineer (MT) was jailed for a maximum 41 months by an Australian court last week, according to press reports. Timothy McCormack not only forged his qualifications and posed as a licensed engineer (MT) for nine months but also forged character references presented to the court for his defense. He was caught last summer, but only after having supervised some 30 "substantial and significant" safety checks in Sydney.

(QAN) took delivery of its second A380 in Toulouse. The airplane is scheduled to arrive in Sydney and will enter service on flights to Los Angeles (LAX) from Melbourne and Sydney on December 22. "This second airplane will allow us to increase frequency to (LAX) to as many as six return services each week," (AN) Executive General Manager, John Borghetti said, adding that the first A380, which has been operating the transpacific routes thrice-weekly since October, "has more than matched our expectations, with customer feedback extremely positive." A third A380 is scheduled to be delivered December 27 and will commence thrice-weekly, Sydney - Singapore - London Heathrow service on January 16. Four more will be delivered next year (one in the first half) with 20 in service by the end of 2013.

A330-203 (976, VH-EBL "Whitsundays") and A380-841 (022, VH-OQC "Paul McGuiness"), deliveries.

January 2009: A "tremendous team effort" enabled Airbus (EDS) to meet its 2008 delivery goal of 12 A380 super jumbos, just two days before the end of the year. (EDS) delivered four A380s to Dubai's Emirates airline (EAD), five to Singapore Airlines (SIA) and three to Qantas (QAN).

INCDT: The mystery surrounding what is now dubbed the "Ningaloo Triangle" centered at Western Australia's North West Cape near Exmouth, deepened last month when it was confirmed that (QAN) experienced a second air data inertial reference unit (ADIRU) failure in just four months in the area.

The Australian Transport Safety Bureau (ATSB) said it was advised on December 27 of an occurrence involving a (QAN) A330-300 cruising at 36,000 ft on its way from Perth (PER) to Singapore (SIN). Some 260 nm northwest of (PER), the autopilot disconnected and the flight crew (FC) received an Electronic Centralized Aircraft Monitor message (NAV IR 1 fault) indicating a problem with (ADIRU) No 1.

The crew implemented the new Airbus (EDS) Operations Engineering Bulletin procedure by selecting the IR 1 and ADR 1 push buttons to off. The airplane returned to (PER).

The (ATSB) said the incident "appears to be a similar event to a previous event involving an A330 airplane." In the October incident, 70 of the 313 people onboard the A330 flying from (SIN) to (PER) were injured when the airplane pitched up and then dove twice after a failure of (ADIRU) 1. An (ATSB) preliminary report issued in November suggested the possibility that transmissions from a naval communications station interfered with onboard systems.

Joint USA/Australia naval communications base in Exmouth, Western Australia, is not to blame for two air data inertial reference unit failures on (QAN) A330s, according to the base manager. Russell Levine told "The Sydney Morning Herald" that it was "highly, highly unlikely" that radio signals from the base could scramble a commercial airplane's navigation systems, because the two use completely different frequency bands. Levine said the very low frequency signals from the Harold E Holt naval base probably are unable to penetrate an airplane fuselage. "We [also] operate in the kilohertz range and the aviation computers operate in megahertz, so there's a big difference," he said. "If we affected planes like that, we would have a lot more issues." The (ATSB) is investigating both recent incidents and has not ruled out interference from the communications base.

(QAN) launched A380 flights on the Sydney - Singapore - London Heathrow "kangaroo route." QF31 will operate on Tuesdays, Fridays and Saturdays, with the QF32 return operating on Wednesdays, Saturdays and Sundays.

Spairliners, the Air France (AFA) and Lufthansa Technik (LTK) A380 component joint venture, won a 10-year deal with (QAN) to provide component support on (QAN)'s A380s, its first with a third party. The contract calls for the repair and replacement of some 750 components stocked in Spairliners' Hamburg depot and covers all 20 A380s ordered by (QAN). Spairliners is expected to provide component support for a total of 47 A380s.

(QAN) retired the last of its six 747-300s. (QAN) operated the airplanes mainly on regional international and domestic transcontinental routes in recent years. (QAN) was forced to retain the 747-300s for longer than desired because of the late delivery of its A380s. The airplanes have been replaced by A330s.


February 2009: The Qantas Group will restructure its New Zealand and China networks as it strives to remain profitable, and (CEO), Alan Joyce denied speculation that the moves are a portent of things to come on its Australian operations. From June 10, (QAN) flights on New Zealand domestic routes will be taken over by its low-cost subsidiary Jetstar Airways (IMU). In addition, (QAN) will quit its Sydney - Beijing (on April 17) and Melbourne - Shanghai (March 31) flights, flagging the weakness in China's economy. The restructure comes two weeks after the Qantas Group reported a -65% plunge in its half-year profit to +A$216 million/+$140.5 million.

The New Zealand changes are seen by some as the start of a trend that will see (IMU) replace the mainline on an increasing number of routes. Centre for Asia Pacific Aviation (CAPA) (CEO), Derek Sadubin said that, "Without a doubt, (IMU) will take over more (QAN) routes. We have already seen evidence of this recently with the Adelaide to Cairns route and you will also see (IMU) operating more regional short-haul international routes."

The restructuring also includes the retirement of (QAN)'s eight 130-seat 737-300s/-400s, which will reduce capacity by an additional -1%, according to Joyce. (QAN) still will operate flights between Australia and New Zealand, occasionally in competition with (IMU), and will upgrade to new 737-800s with seat-back In-Flight Entertainment (IFE) throughout. (IMU)'s New Zealand network will comprise Auckland, Christchurch, Wellington, and Queenstown. Rotorua no longer will be served.

An (IMU) spokesperson said that with costs -40% below (QAN)'s, the subsidiary is in better shape to respond to market demands for lower fares in difficult economic times.

(QAN) will take delivery of its fourth A380 in late May and announced the following increases in A380 services: Thrice-weekly, Sydney - London Heathrow will become five-times-weekly on June 7 and a fourth weekly, Sydney - Los Angeles flight will launch on June 9. (QAN) expects to take delivery of four A380s this year.

March 2009: Qantas (QAN) will launch thrice-weekly, Singapore - Mumbai service on June 2.

In the biggest management shakeup in its history, (QAN) eliminated -90 senior management positions to cut costs and streamline (QAN) as analysts warned that further layoffs and airplane deferrals are inevitable. (CEO), Alan Joyce would not rule out the option.

(QAN) has an additional 17 A380s on order plus 65 787s, and both it and its low-cost subsidiary Jetstar (IMU) have significant commitments for 737s and A320s. Late last year, (QAN) laid off -1,500 employees, cancelled the recruitment of 1,200 new workers and effectively grounded 10 airplanes as traffic slowed. Joyce said structural changes resulting from the management cuts and the earlier cost-reduction measures will make the airline leaner and "give it the ability to better respond to rapidly changing circumstances." He added, "Some departments had become too bureaucratic."

(QAN) and Etihad Airways (EHD) announced a code share agreement effective March 29 under which (QAN) will place its code on (EHD)'s 21 weekly flights from Abu Dhabi (AUH) to Sydney (SYD), Melbourne (MEL) and Brisbane (BNE) via Singapore, as well as connections from (AUH) to Amman, Beirut and Bahrain. (EHD) will place its code on "selected" (QAN) flights between Australia and Auckland and on "a range" of Adelaide - (MEL), (SYD) - (BNE), and (SYD) - Cairns flights, (QAN) said. The deal is designed to open up the Middle East market for (QAN) customers, while countering the growing influence of Emirates (EAD) in Australia.

Honeywell (SGC) said (QAN) received approval from Australia's (CASA) to use the (SGC) SmartPath Ground-Based Augmentation System (GBAS) at Sydney for satellite-based landings on (QAN)'s A380s. (QAN) previously had been approved to fly (GBAS) approaches with its 737s, recording more than >1,600 (GBAS) landings at Sydney to date.

(QAN) was forced to withdraw its three A380s from service because of unrelated fuel system problems that came after what had been described as the best entry into service of any airplane with Australia's national airline. One A380, (QAN)'s first, had technical troubles in Sydney and was delayed 19 hours before taking off for London Heathrow. On the return trip, the airplane suffered a fuel leak and passengers were transferred 12 hours later to a 747-400. Engineers in London fixed the leak and the A380 was back in service.
The remaining A380s were removed from service due to fuel system problems and were returned to service after fixes were made. (QAN) stated that two A380s were declared unserviceable with a "fuel tank indication system problem." One (QAN) engineer (MT) said that the issue related to the Fuel Quantity Indicating System (FQIS) and some microbiological contamination, which resulted in faulty (FQIS) readings.

Since entering service in October 2007, the 13 A380s flying with Singapore Airlines (SIA), Emirates (EAD) and (QAN) have flown 31,750 hours and 3,300 revenue flights, with 97.8% leaving on time.

Investigators in Australia remained baffled by two major incidents involving (QAN). The Australian Transport Safety Bureau (ATSB) issued interim factual reports into both the violent upset of (QAN) Flight 72, an A330 operating last fall from Singapore to Perth on which some 70 passengers were injured, and the August explosion of an oxygen bottle that crippled (QAN) Flight 30, a 747-400 flying between Hong Kong and Melbourne. The (ATSB) said exhaustive tests of the A330's malfunctioning air data inertial reference units proved inconclusive. However, an (ATSB) spokesperson said further electromagnetic interference testing simulating transmissions from passenger laptops and other electronic devices is about to start. While testing has been completed using the same frequency (19.8 kHz) as the Harold E Holt Naval Communication Station near Learmonth with no faults, interference from the base has not been ruled out.

The (ATSB) found that the A330's primary (ADIRU) sent erroneous data (spikes) on many parameters to systems in the airplane, including the primary flight computers, that resulted in the autopilot disconnecting and two violent pitch-down events. Disassembly of the units will not be done until Electro-Magnetic Interference (EMI) testing is complete in order to prevent disturbance to the hardware. After disassembly, individual modules will be tested separately.

Regarding QF30, investigators said that because the oxygen bottle, which blew a 2-m hole in the fuselage, has not been found, the exact reason for the explosion probably never will be determined. Examination of cylinders from the same production batch did not identify any verifiable deficiencies.

"These two incidents involved extremely rare, if not unique, circumstances that were beyond (QAN)'s control," (QAN) (CEO), Alan Joyce said. He defended (QAN)'s safety record and said, "Importantly, both reports confirm that (QAN) has responded appropriately to all safety actions required by the (ATSB)."


April 2009: Qantas (QAN) announced its intention to ground and sell 10 airplanes, eliminate -1,750 more jobs (including -500 management positions) and defer at least 16 orders as it battles the economic downturn, which it warned will result in a pre-tax profit for the fiscal year ending June 30 of +A$100 to +A$200 million/+$72.5 to +$144.9 million rather than the +A$500 million forecast in November.

The new cuts will result in a -5% capacity reduction, predominantly on its domestic network but also on routes to the USA, UK and South Africa. It will defer four A380s by 10 to 12 months and 12 737-800s by an average of 14 months. The deferrals will result in a -A$1 billion reduction in capital expenditure up until June 30, 2010. It said it still is negotiating the delivery of 15 787-8s intended for low-cost subsidiary Jetstar Airways (IMU).

(QAN) unveiled a streamlined ownership structure for Singapore-based Jetstar Asia (JSA) and Valuair (VLU) designed to provide a growth platform in line with its pan-Asian strategy. Under the structure, the Qantas Group and Singapore-based Westbrook Investments acquired all shares in Orangestar Investment Holdings, the previous ownership holding structure, via a new holding company, Newstar Investment Holdings. Westbrook, wholly owned by Choo Teck Wong, will hold 51% of Newstar. Choo is a longtime partner of (QAN) and will be Newstar's Chairman. (JSA) (CEO), Bruce Buchanan and Orangestar Director, Paul Edwards, also will serve on the new board. Chong Phit Lian will remain (CEO) of both (JSA) and Valuair (VLU).

Buchanan said that "coordination of (JSA), (VLU) and Jetstar (IMU) operations will provide better opportunities for customers by aligning their product offerings, while ensuring the (IMU) business model is applied across each business." He cited the ability to offer cheaper (IMU) "Lite" fares on (JSA) as an example. (QAN) previously had held 45% of Orangestar, with Temasek, the Singapore government's investment vehicle, owning 19%. Local businessmen held the balance.

(QAN) Executive General Manager, John Borghetti announced his resignation effective May 4, completing the management shakeup that included the elimination of -90 senior positions last month. Borghetti had been a contender for the Qantas Group (CEO) position along with former (CFO), Peter Gregg. The job eventually went to former Jetstar Airways (IMU) (CEO), Alan Joyce, and Gregg resigned last summer. Borghetti, a 36-year veteran, will be replaced by Rob Gurney, who was named Group Executive (QAN) Commercial.

(QAN) (CEO), Alan Joyce called for an overhaul of Australia's 10-year depreciation policy, which puts (QAN) at a significant disadvantage compared to carriers like Singapore Airlines (SIA), which has a three-year schedule. "All we want is a level playing field," he said. (QAN) has A$31 billion/$22.46 billion worth of airplanes on order (one of the world's largest order books) and the change in depreciation would have a dramatic effect on its ability to raise capital. Joyce argued that any reduction in the statutory cap of 10 years not only would improve its cost base and international competitiveness but would assist in promoting green technology and support the government's proposed carbon reduction goals. "A reduction in effective life of the airplane for tax purposes would provide airlines with an incentive to purchase newer, environmentally efficient aircraft and engine technologies sooner, thereby reducing the level of fuel consumption," he said. (QAN)'s largest single capital item is an order for 65 787s worth A$23 billion at list prices. Most of its major international competitors enjoy more favorable depreciation schedules or pay no tax at all. For example, Hong Kong has 6.7 years and Thailand, China and Malaysia five years each, while Emirates (EAD) operates in a tax-free environment.

The relationship between (QAN) and Malaysia Airlines (MAS) appears to have fizzled following the expiration of a December 2007 Memo of Understanding (MOU) designed to establish the framework for a joint maintenance repair & overhaul (MRO) organization in Kuala Lumpur. The new (MRO) was supposed to launch last year and handle overflow work for both the (QAN) mainline and its subsidiaries. But the project never got off the ground, for reasons that are unclear, and (QAN) confirmed to several news agencies that no further discussions are planned.

(MAS) told a different story over the weekend, with Senior General Manager Engineering & Maintenance, Roslan Ismail telling media that (MAS) "is in discussions with (QAN) for an extension to the (MOU), but we have yet to come to an agreement." But (MAS) acknowledged that "no active discussions are taking place, unless the (MOU) is subsequently renewed," in a stock market release cited by "Sinchew."

According to Melbourne's "Herald Sun," (QAN) sent a single 737 to Malaysia (MAS) for maintenance in 2007 but has not had any work performed in the country since. A (QAN) spokesperson told the paper that the (MRO) (MOU) "resulted from elementary discussions" that did not bind (QAN) to continue working with (MAS). "This is not a case of the (MOU) being dissolved now. It's just that (QAN) has no need to send airplanes to Malaysia for maintenance."

INCDT: (QAN) and the Australian Transport Safety Bureau (ATSB) said they will consult with and assist Dutch crash investigators after a (QAN) 737-800 suffered a radio altimeter malfunction similar to the one that is suspected of causing the loss of a Turkish Airlines (THY) 737-800 on approach to Amsterdam on February 25. (QAN) Flight 1020, a 737-800 operating from Hobart to Sydney on April 7, experienced the radio altimeter fault on approach. According to a (QAN) spokesperson, the 737-800 was "at approximately 100 ft when the captain (FC)'s radio altimeter indicated that the airplane was at around 10 ft, about where the auto thrust activates full retard on the throttles." As in the (THY) crash, the captain (FC)'s altimeter was indicating a different set of data than the first officer (FC)'s. "Upon noticing the fault, the captain (FC) immediately disconnected from the auto thrust and manually flew the airplane into Sydney," the spokesperson said. "It is (QAN) Flight Operations policy for pilots (FC) to guard the thrust levers and fly with hands on the levers when the airplane is on auto, which ensures that should a fault with the thrust levers occur, the pilots (FC) are immediately able to fly manually." The carrier self-reported the incident to the (ATSB), which confirmed it will investigate due to the similarity of the fault to the assumed cause of the (THY) crash. The (QAN) spokesman said that "there is no suggestion by the (ATSB) that (QAN) or its pilots (FC) were at fault. This investigation is simply to assist European regulatory authorities."

A preliminary investigation by the Dutch Safety Board revealed that the only fault discovered on the airplane was in the captain (FC)'s radio altimeter, which suddenly changed from 1,950 ft to read -8 ft in altitude, although the right-hand altimeter functioned correctly.

Mxi Technologies announced that its software supporting the first three A380s within the (QAN) fleet has gone live. Implementation of the Maintenix software "provides (QAN) with such features as Field Loadable Software configuration management and Civil Aviation Safety Authority-approved electronic certification and record keeping," Mxi said.

(QAN) announced a comprehensive review of its seating configurations, with many premium seats expected to get the ax as business (C) travel plummets. The reassessment comes as (QAN) is suffering the worst decline in business (C) travel in decades with a fall of up to -30% in premium travelers, who are paying up to -50% less than the normal premium fare. (CEO), Alan Joyce conceded that "we have too few seats on some of our airplanes," with premium seats making up 40% of the total on some. He said (QAN) has been too focused on premium classes and pointed to one configuration on the 747-400 that features only 307 seats: 14 first (F), 66 business (C), 40 premium economy and 187 economy (Y). "That is just not enough seats," he said.

(QAN) withdrew first class (F) from sale for flight departures between July 6 and October 31 on three routes due to the downturn in premium traffic. The flights are Sydney - San Francisco, Sydney - Buenos Aires, and Melbourne -Hong Kong - London Heathrow.

(QAN)'s A380s have only 450 seats, the lowest of any operator so far. It already has removed first class (F) from some 747-400s on routes to Frankfurt and between Auckland and Los Angeles. The industry expectation in Australia is that first class (F) will be removed from more 747s while business class (C) will be reduced across the fleet, providing more room for premium economy and economy (Y).

Following its announcement that it plans to sell 10 airplanes and defer delivery of at least 16 more (including four A380s), (QAN) would not be drawn into commenting on the fate of its first 15 787s as speculation mounted that they also may be deferred. The first 15 are the shorter range 787-8 model while the balance of the group's order for 65 787s are 787-9s. (CEO), Alan Joyce said (QAN) is in negotiations with Boeing (TBC) so he could not comment, a sentiment that was echoed by (TBC). However, sources at (QAN) said that "the ball is very much in (TBC)'s court," although "(QAN) really wants those airplanes." The 787-8s are earmarked for low-cost subsidiary Jetstar Airways (IMU) and are to be used on routes to Japan and to launch new services to Europe.

(TBC) has been working hard to secure earlier deliveries to make up for both the delay in the 787 program and the stretch-out in the delivery schedule. It is understood that (IMU) has been offered some extra airplanes from positions belonging to Northwest Airlines (NWA) and Chinese carriers.

May 2009: Japan Airlines (JAL) and Qantas (QAN) will expand their code share agreement to include services between Australia (Sydney, Melbourne, Brisbane and Perth) and Japan (Tokyo Narita and Osaka Kansai) via Singapore from June 1.

June 2009: Jetstar Airways (IMU) launched services in New Zealand, taking over parent Qantas (QAN)'s flights between Auckland, Christchurch, Wellington, and Queenstown. The (QAN) mainline under JetConnect (QNZ), which operated a small fleet of 737-400s in New Zealand, will withdraw from domestic service there.

(QAN) will take delivery of its fourth A380 at the end of next month and will increase its Sydney (SYD) - Singapore - London Heathrow (LHR) service to five-times-weekly from thrice-weekly and its Sydney - Los Angeles (LAX) flights to four-times-weekly from thrice-weekly, beginning August 6. By November, when it will have six A380s, (QAN) will operate (SYD) - (LAX), and (SYD) - (LHR) daily while Melbourne - (LAX) gets a third weekly flight. Total weekly A380 flights will number 34.

(QAN) also announced and expanded code share deals with American Airlines (AAL) and its first arrangement with Iberia (IBE). From June 17, (QAN) will place its code on (AAL) flights from Los Angeles and San Francisco via Dallas/Fort Worth and Chicago O'Hare to eight USA cities. On July 15, it will place its code on (IBE) flights from Madrid to Frankfurt (FRA) and London Heathrow, while (IBE) will place its code on (QAN) service from (FRA) and (LHR) to (SYD). Those flights will be (IBE)'s first under its code to Australia.

INCDT: A (QAN) A330 flying from Hong Kong to Perth encountered "severe turbulence" that resulted in the hospitalization of six passengers and one crew member with "minor injuries," the airline confirmed. All were soon released. "The airplane most likely encountered what is known as convective turbulence, which led to it rapidly gaining around 800 ft in altitude before returning to its cruising altitude of 38,000 ft," (QAN) said, adding that it "remain[s] confident" in the A330, with which it has experienced turbulence trouble before.

(QAN) became the latest customer to cancel and/or postpone orders for the 787 Dreamliner, reaching an agreement with Boeing (TBC) to drop orders for 15 787-9s scheduled for delivery in 2014 through 2015, reducing its order book for the airplane to 50, and also deferring 15 787-8s by four years.

The largest airline customer for the 787, (QAN) said the cancellation is in response to the steep downturn in airline traffic, with (CEO) Alan Joyce emphasizing that the decision was not linked to ongoing problems with the 787 Dreamliner, including a sixth delay in the airplane's first flight announced by (TBC). "Based on list prices, the cancellation will relieve (QAN) of $3 billion in capital requirements. The effect will be far-reaching, putting on hold low-cost subsidiary Jetstar (IMU)'s European expansion plans and delaying (QAN)'s replacement of its aging 767 fleet. (IMU) now will get the larger, longer-range 787-9 instead of the 787-8, with the latter model replacing 767s in mainline domestic operations.

Joyce said that while the latest 787 delay is disappointing, (QAN) remains "committed to the airplane as the right choice for (IMU)'s future international expansion, (QAN)'s growth and as a replacement for (QAN)'s 767 fleet." (QAN) holds options for 50 additional 787s.

July 2009: Qantas (QAN) was fined C$155,000/$133,000 by Canada's Competition Bureau after it pleaded guilty to participating in an air cargo cartel. The guilty plea in a Canadian court is the latest consequence of (QAN)'s admission of price fixing between 2002 and 2006. It was fined A$20 million/$15.5 million by the Australian Consumer & Competition Commission (ACCC) in 2008 and $61 million by the USA Department of Justice in 2007 for the same offences. (QAN) is the fourth carrier to be convicted in the Canadian investigation.

767-223ERF (22318, N761CX), (ATI) Air Transport International (TIN) wet-leased to (QAN) subsidiary, Australian Air Express (ACS) for freight service between Australia and New Zealand.

August 2009: Qantas (QAN) reported a +A$123 million/+$101.3 million net profit for its fiscal year ended June 30, down -87.3% from +A$970 million earned in the prior year, and announced a three-year, -A$1.5 that the key driver of the reduced result was weaker domestic and international demand, particularly for premium travel, which led to a -4.3% yield decline and capacity cuts of -1.9% (ASK) across the group.

One-time events that also weighed down the bottom line included industrial action by the Australian Licensed Aircraft Engineers Association (which cost (QAN) an estimated A$130 million), the impact of the swine flu scare (estimated at -A$45 million) and costs associated with introduction of the A380 (A$37 million). Highly volatile oil prices and a -31% fall in the Australian dollar relative to its USA counterpart were factors as well, particularly in the first half ended December31, 2008.

Consolidated full Fiscal Year (FY) revenue declined -6.9% to A$14.55 billion, while costs increased +0.6% to A$14.34 billion, producing an operating profit of +A$181 million, down -88% from +A$1.41 billion in the prior year. (QAN) took charges of A$152 million on write-downs and provisions related to airplane retirements and A$106 million on restructuring and redundancy.

Group traffic slipped -3.2% to 99.17 billion (RPK)s on a -1.9% dip in capacity to 124.59 billion (ASK)s, producing a load factor of 79.6% LF, down -1.1 points. Yield declined -4.3% to A11.3 cents. The fleet numbered 229 airplanes as of June 30, up from 224 on the same date last year, with 20 airplanes delivered during the 12-month period, while 15 were retired.

(QAN) said its net cash position as of June 30 was A$3.6 billion. It has deferred A$7.9 billion in capital expenditures. However, it still has 160 airplanes on order including 50 787s, to which it remains committed, Joyce said. It recently cancelled 15 787-9s scheduled for delivery in 2014 to 2015 and also deferred delivery of 15 787-8s by four years.

(QAN) (CEO), Alan Joyce said that the time is "absolutely not right" for mergers with competitors and would represent a distraction from managing the airline. The strongly worded statement, reported by the "Sydney Morning Herald," distanced Joyce from his predecessor Geoff Dixon, who touted industry consolidation at the same forum the previous day. Joyce said mergers between airlines in the Asia/Pacific region are more than >10 years away owing to regulatory and competition hurdles. When he took over (QAN) last year, he quickly quashed talk of a possible tie-up with British Airways (BAB) that had interested Dixon strongly. Indeed, while at (QAN)'s helm, Dixon tried unsuccessfully to engage with a raft of airlines regarding a potential merger, including (BAB), Singapore Airlines (SIA), Malaysia Airlines (MAS), and Air New Zealand (ANZ).

Australia and New Zealand are expected to move toward common air travel borders this month, cutting red tape and airfares.
New Zealand Prime Minister, John Keys and Australian Prime Minister, Kevin Rudd are expected to announce the streamlining of arrivals and departures that may see trans-Tasman flights operating from domestic terminals and elimination of departure taxes and duplication of quarantine, customs and security checks.

The changes are expected to boost tourism between the two countries, which already see approximately 1 million visitors cross the Tasman each year in both directions. Under the proposals, passengers leaving Australia for New Zealand would not pay the A$47/$39.10 passenger movement charge and the countries would recognize each other's security, immigration and quarantine checks in a similar way to members of the European Union (EU).

Jetstar Airways (IMU) (CEO), Bruce Buchanan said previously that common border arrangements could reduce fares by at least -30% on services from the east coast of Australia to New Zealand, where taxes and charges make up a large part of the fare. Tourism Australia, however, suggests a -20% reduction is more likely.

It is understood that passports still will be required and passengers will make a one-stop customs and immigration check at the departing airport in a similar way to the USA/Canada arrangement implemented six years ago.

(QAN) took delivery of its fourth A380 (67, VH-OQK). It will use the airplane to increase its thrice-weekly, Sydney - Singapore - London Heathrow (LHR) service to five-times-weekly and to operate a fourth weekly, Sydney - Los Angeles (LAX) flight from September 7. (QAN)'s fifth and sixth A380s are due to arrive by year end, at which point, flights to (LHR) and (LAX) will be daily, and Melbourne - (LAX) will increase to thrice-weekly from twice.

September 2009: INCDT: Australia’s air safety watchdog says a serious loss-of-separation incident on September 3, 2009 was the fault of a recently trained controller, and it identified deficiencies in Airservices Australia’s controller training and assessment. A Qantas (QAN) 737 and an Emirates (EAD) 777 came within 3.6 nm of each other during the incident, which occurred near Mildura, Victoria. The horizontal radar separation standard is 5 nm. In its final report, issued November 24, the Australian Transport Safety Bureau (ATSB) found that the controller had reacted late to the potential conflict, and then compounded the problem by allowing himself to be distracted by a routine task. The controller had recently qualified from the Airservices Melbourne academy, despite having notations on his training record about missing potential conflicts. The controller had been briefly stood down earlier in the day due to another incident, and this may have been another distraction. According to the (ATSB), “the [Airservices] training and assessment system was ineffective in this case, because it placed an individual with deficiencies in scanning and conflict resolution in a control position.” However, this was classified as a “minor safety issue.” Airservices says it “reviewed the situation and determined there are no systematic issues with the assessment regime.” However, to strengthen its training, additional refresher modules in compromised separation training have been added to the curriculum. The (ATSB) says it is satisfied that the action taken by Airservices “adequately addresses the training aspects of the safety issue.” The (ATSB) is investigating another incident involving loss of separation and “will consider the role of controller assessment in that, and subsequent investigations.” The other incident, on December 22, 2009, involved an A330 and a 737.

(QAN) is considering selling its 46.3% in Air Pacific (APC), Fiji's national carrier, in order to compete with the Virgin Group on routes to the tropical tourist destination. (QAN) applied to Australia's International Air Services Commission, the route regulator, for capacity to Fiji on behalf of its Jetstar Airways (IMU) subsidiary, but it would need to sell off its stake in (APC). An airline spokesperson confirmed that the (APC) stake was under review and it is understood that the Fijian government is amenable to the sale. (QAN) apparently has disappointed its partners by vetoing decisions that Fijians say would have helped the airline.

(QAN) wants to launch Jetstar (IMU) on the route next year, starting with Sydney - Fiji in April. Pacific Blue (PBI), Virgin (VAA)'s international arm in the region, started flying to Fiji from Brisbane in 2004 and since has started services from Sydney, Melbourne, and Adelaide. (VAA) has applied for an additional +1,260 seats for those routes and hopes to introduce its V Australia (VAZ) 777-300ERs. (QAN) has applied for 1,500 seats per week and the (IASC) has asked both airlines to justify the extra capacity. (QAN) plans to code share with both (IMU) and (APC).

Australia's airlines were thrown into chaos as unprecedented dust storms in Sydney (SYD) and Brisbane (BNE) and wild weather in Melbourne (MEL) closed and restricted runway operations at the country's three largest airports. The disruption was caused by an intense low-pressure frontal system with winds up to 100 miles per hour that blew 75,000 tonnes of dust per hour over New South Wales and southern Queensland. Pollution levels were 1,500 times normal, the highest on record, and visibility fell to as low as 100 ft. Hundreds of flights were diverted, disrupted or canceled.

Sydney was closed to virtually all traffic for several hours from 6 am to 9.30 am and then was restricted to operations from the single cross runway instead of the normal two parallel runways because of the westerly wind responsible for blowing the dust from inland (NSW). Problems were compounded as airplanes diverted to (MEL) and (BNE) and crews timed out. (MEL) and (BNE) also experienced significant delays as high winds closed runways and effectively cut airport capacity in half. When (SYD) reopened, movements were reduced from 50 per hour to 16.

"We planned for a lower air traffic rate because of the weather pattern that was emerging, but the winds and the dust were much worse than forecast," an Airservices Australia spokesperson said. "There was an 80-minutes hold to land in (SYD), aborted landings everywhere and at one stage the alternate for (BNE) was Canberra."

October 2009: Qantas (QAN) deferred plans for additional flights between Australia and South Africa and decided against summer services to South Korea, owing to "current market conditions," according to a regulatory filing cited by the "Sydney Morning Herald."

(QAN) wants the Australian government to modernize Australia's air traffic control (ATC) system.

In the fiscal year ended June 30, (QAN) increased cash reserves by nearly +39% to A$3.6 billion/$3.33 billion and Clifford assured shareholders it remains profitable despite unprecedented headwinds. "It was a dreadful year for the global economy, which caused a sudden and ongoing contraction in global aviation demand, yields and capacity," he said. (QAN)'s full-year profit plummeted -87.3% to just +A$123 million. The (AGM) was held amid howls of criticism of the A$10.7 million payout for former (CEO), Geoff Dixon, and shareholders lodged a significant protest with 42% voting against the airline's remuneration report. (CEO), Alan Joyce assured those who criticized (QAN)'s customer service that it had "stripped back management layers to speed up decision-making" and given front line staff "more power." The changes are part of the "Q Future" program that seeks to trim -A$1.5 billion in costs within three years.

(QAN) will have to wait until December for the delivery of its fifth and sixth A380s after encountering flight stability problems with the fifth airplane, which had been expected to enter service on USA routes next month. (QAN) confirmed that the airplane will require further testing in Toulouse to rectify a minor trim stability problem. However, it dismissed media rumors that the A380 was not flying straight, while on autopilot. "The problem relates to the flight trim, which controls the airplane's ability to maintain its center of gravity," (QAN) said. "(QAN) has robust contractual provisions in place with all airplane manufacturers, including Airbus (EDS), that govern tolerances around airplane specifications, including flight trim." It added that the delay would have no material impact as the airplanes were not yet placed into the northern winter schedule.

(QAN) named Air New Zealand (ANZ) General Manager Technical Operations, Chris Nassenstein as its new Executive General Manager Qantas Engineering, effective next February.

INCDT: A Jetstar Airways (IMU) A330-203 (CF6-80E1A2) (508, /07 VH-EBA) with 209 passengers and crew on board, suffered momentary erratic speed data indications from its computers in apparent bad weather and possible icing conditions on an October 29 flight from Tokyo Narita to the Gold Coast. The scenario bears similarities to that which investigators believe may have been a factor in the loss of an Air France (AFA) A330-200 over the Atlantic Ocean five months ago.

The pilots (FC) of Flight JQ12 remained in control when the situation occurred at 1:30 am Australian Eastern Daylight Time and the malfunction cleared after a few seconds. The pilots (FC) landed at the Gold Coast around 5 hours later and passengers reportedly were unaware of any problem.

An (IMU) spokesperson confirmed the incident and said the problem appeared to relate to the airplane's speed-sensing system, which involves pitot tubes and air data inertial reference units. "At this early stage, we don't know which component caused the problem," the spokesperson said. However, it was determined that icing of one of the pitot tubes is suspected strongly.

In the wake of the Air France (AFA) tragedy, Airbus (EDS) issued various directives to A330 and A340 operators relating to pitot tubes and suggested the replacement of at least two Thales (THL) probes with Goodrich (BFG) models). Both Qantas (QANH) and (IMU) A330s are fitted with Goodrich (BFG) tubes.

The Australian Transport Safety Bureau (ATSB) and the Civil Aviation Safety Authority are investigating the incident in conjunction with (QAN) and (IMU). The suspect pitot tube and several other components were replaced and checks made, and the airplane was ferried to Sydney to resume operations.

The (ATSB) still has not determined what caused a violent upset of a (QAN) A330 off Western Australia in October 2008, injuring 75. One of the airplane's (ADIRU)s sent erroneous data to the primary flight computer.

November 2009: Qantas (QAN) joined the Sustainable Aviation Fuel Users Group, the industry coalition established to accelerate the development and commercialization of sustainable aviation fuel.

(QAN) plans to introduce an "Airport of the Future" concept in major domestic markets next year that it said will reduce dramatically time spent at check-in and in security queues and speed baggage collection.
Domestic passengers will be issued new (RFID) cards that will replace both the standard boarding pass and baggage tags and give instant recognition to security agents.

(QAN) (CEO), Alan Joyce said the A$40 million/$37.1 million Airport of the Future is just the start of a host of new offerings under a three-year "Q Future" program designed to reestablish (QAN) as a world leader in premium travel. "I can assure you that the reports of the death of premium travel have been greatly exaggerated," he told media. "Sure, demand for premium flying has been affected during the global downturn, but our research confirms that there is now, and will continue to be, an appetite for premium travel among both domestic and international travelers."

A key part of the strategy is to remove that "point of pain" at airport check-in, Joyce said. "Check-in takes too long, causes too much stress and our customers want speed and ease. Passengers will simply swipe their card on a reader and head to a radically simplified baggage drop or straight through a smoother security process to the lounge," he said. The new boarding product is modeled on an Air New Zealand (ANZ) initiative launched last year.

Joyce said (QAN) aims to be the first "next-generation" premium carrier and will unveil more initiatives soon. "Modern premium flying is about going through an important evolution to maximize its position in a more sophisticated and segmented marketplace," he said. "(QAN) is our iconic, premium airline brand and we are focused on reinforcing it."

Over the next two years the (QAN) group will take delivery of eight 450-seat A380s, three A330s, nine 737-800s and six DHC-8-Q400 regional airplanes, while its Jetstar Airways (IMU) subsidiary will get 17 more 180-seat A320s. In the longer term, (QAN) has firm commitments for a further 92 airplane, including 50 787s. The 787 Dreamliner is due to make its first flight on December 22.

Last spring, (QAN) cut capacity and staff, grounded airplanes and cancelled orders for 15 787s, measures that (CEO), Alan Joyce said no longer are necessary. It also launched a A$1.5 billion cost-cutting program over the next three years, along with its "Airport of the Future" designed to handle more passengers without major terminal expansion.

Next month, it will reveal a reconfiguration of its A380s and 747s to eliminate first class (F) on more routes, decrease the number of business class (C) seats and increase capacity in premium economy and economy (Y) cabins. (QAN)'s A380s and some of its 747s have the lowest seat count (450 and 305, respectively) in the industry because of the heavy focus by previous management on premium travel.
Despite the reductions, Joyce said that he is confident "premium travel will return" and is "upbeat on the recovery" witnessed on domestic routes.

December 2009: For all its financial and strategic success, what Qantas (QAN) fears most is the recent increase of flights from the Arabian Gulf. Qatar Airways (QTA), has joined Emirates (EAD) and Etihad Airways (EHD) on the list of airlines serving Australia, with the launch of nonstops between Doha and Melbourne three time s weekly with a new 777-200LR. The service becomes daily next month and will join the new Doha - Sydney service scheduled for sometime in 2010. For (QTA), Melbourne is one of four new destinations added in 2009. (QAN)'s biggest exposure to Gulf carrier competition is most evident in the Europe - Australia market, with particular emphasis on London - Australia.

Multinational corporations can now complete their Oneworld (ONW) alliance sales contracts electronically. The agreements, through which (ONW) alliance members jointly offer special prices and perks to large corporate clients, previously required ink signatures by representatives of the company and members of each airline in the (ONW) alliance. The first firm to use the new service is Rio Tinto, an Australian mining giant which unsurprisingly does business with the (ONW) alliance because (QAN) is a member.

The Australian government will relax the ownership rules for (QAN), allowing the national airline to play a bigger role in consolidation of the global airline industry. Under the new policy, detailed in a 246-page "Aviation White Paper," the government will eliminate the 25% ownership cap for foreign individuals and 35% cap for foreign airlines for a combined ceiling of 49%. (QAN) must remain domiciled in Australia and have an Australian-controlled board. The Federal Transport Minister, Anthony Albanese said the move will "increase (QAN)'s ability to compete for capital and to take opportunities to form strategic partnerships in an increasingly globalized industry."

The government also announced plans to tighten security at regional airports by closing loopholes related to security exemptions for turboprop airplanes. It relaxed some restrictions on carry-on items and will allow passengers to take metal nail files, knitting needles and umbrellas on board airplanes.

The White Paper represents the most comprehensive overhaul of aviation policy since deregulation and (QAN)'s privatization in the early 1990s. The policy document contains 158 government initiatives that will shape Australian aviation for the next 20 years.

(QAN) said it is has contingency plans in place in case 190 engineers represented by the Association of Professional Engineers, Scientists and Managers Australia (APESMA) follow through with their threat to strike later this month or next. (APESMA) is asking for a +26% pay increase over the next three years.

(QAN) took delivery of its fifth A380 and will take the sixth before the New Year. (QAN) plans to operate the airplane on a Melbourne (MEL) - Singapore (SIN) - London Heathrow (LHR) routing beginning January 22. (QAN) has flown the A380 between Sydney (SYD) and LHR since January. From March 29, (QAN)'s six A380s will operate daily, (SYD) - Los Angeles; five-times-weekly, (SYD) - (SIN) - (LHR), thrice-weekly, (MEL) - (LAX); and twice-weekly, (MEL) - (SIN) - (LHR).

January 2010: Two Australian Qantas (QAN) executives have been restricted from leaving Vietnam, while the former (CEO) of Jetstar Pacific (PAH) has been arrested over losses at (PAH), a joint venture (JV) between (QAN) (27%) and the Vietnamese government and investors. (QAN) (COO), Daniela Marsilli, and (CFO), Tristan Freeman were not charged and are assisting authorities in investigating currency losses at (PAH). (QAN) (CEO), Alan Joyce said that Pacific's fuel hedging losses ran into the millions of Australian dollars and "were a part of global business risk." He said Marsilli and Freeman had not acted outside the company's board structure. Vietnamese media reported that former (CEO), Luong Hoia Nam was taken into custody in Hanoi earlier this month under allegations that he, Marsilli and Freeman flouted a board resolution at the end of 2008 and continued to buy fuel into May 2009.

(QAN) said it remains confident in its 27% investment in Vietnam's Jetstar Pacific (PAH) despite the emergence of a report highlighting maintenance deficiencies and the legal troubles facing several executives. (QAN) (CEO), Alan Joyce confirmed that a Civil Aviation Administration of Vietnam (CAAV) report on (PAH) "identified a number of administrative and quality issues related to the (PAH)'s operations." He said those issues "have already been addressed by the airline. We will work with our Vietnamese partners on the (PAH) board as they continue to liaise with the (CAAV) . . . We remain confident in our investment in (PAH) and confident in the airline's total commitment to safety."

Joyce also said that in addition to (the (CAAV))'s investigation, (QAN) supported a number of routine and independent audits to assess (PAH)'s maintenance performance. "The first of these was undertaken prior to the airline taking on the (PAH) brand and the most recent was finalized in October last year," he revealed. "This audit concluded there were no safety concerns with (PAH)'s operations and that (PAH) met regulatory requirements."

According to the "Australian Associated Press," the (CAAV) claimed three Pacific officials, including former (CEO), Luong Hoia Nam made mistakes in monitoring maintenance work. The other two individuals were unidentified foreigners who headed the carrier's maintenance and technical quality divisions. (CAAV) Deputy Director, Lai Xuan Thanh said (PAH) made numerous mistakes that put flights at risk, according to the "Vietnam News Agency." Hanoi police arrested Nam, alleging neglect relating to fuel hedging.

(QAN) decided not to renew its membership in the Association of Asia Pacific Airlines (AAPA), a move that analysts predict may spell the end of an organization with a history spanning more than four decades. (QAN)'s decision is expected to be emulated by a number of other member airlines, some of whom suggested that the industry is better off uniting behind one voice, (IATA) (ITA).

One (AAPA) critic said the fact that there are no Low Cost Carrier (LCC)s or mainland Chinese members "was a weakness," adding that the group "relied on well-established legacy airlines" and therefore was not truly representative of the region. During November's Assembly of Presidents in Singapore, Singapore Airlines (SIA) (CEO), Chew Choon Seng called on members to increase their involvement, although a number of carriers failed to send representatives to the meeting. At that time, (AAPA) Director General, Andrew Herdman said the group was striving to attract new members, including from mainland China.

Other (AAPA) members are Air New Zealand (ANZ), (ANA), Asiana Airlines (AAR), Cathay Pacific Airways (CAT), China Airlines (CAL), Dragonair (DRG) (a Cathay (CAT) subsidiary), (EVA) Air, Garuda Indonesia (GIA), Japan Airlines (JAL), Korean Air (KAL), Malaysia Airlines (MAS), Philippine Airlines (PAL), Royal Brunei Airlines (RBA), Thai Airways (TII), and Vietnam Airlines (VIE).

(QAS) opened a new Business Class (C) Lounge at Hong Kong's Chep Lap Kok Airport (SEE ATTACHED PHOTO - - "QAN-2010-01 HKG LOUNGE."


February 2010: Qantas (QAN) reported a +A$58 million/+$52.2 million profit for the half-year ended December 31, down -72% from the +A$210 million earned in the year-ago semester, and announced the elimination of first class (F) service to all but two destinations in an effort to lift yield. The group result would have been a loss but for the contribution of low-cost subsidiary Jetstar Airways (IMU), which trebled its earnings, and the frequent-flyer program that doubled earnings. Consolidated revenue slumped -14% to A$6.09 billion, while costs declined -15% to A$6.76 billion. Operating profit sank -48% to +A$143 million from +A$274 million in the first half of fiscal 2008 to 2009.

The Qantas (QAN) mainline unit posted (EBIT) of A$60 million, down -63.33% year-over-year, while Jetstar (IMU) recorded a thumping +181% lift in (EBIT) to A$121 million. The loyalty program reported (EBIT) of A$157 million.

Group traffic increased +1.2% to 51.49 billion (RPK)s against a -2.2% decline in capacity to 62.47 billion (ASK)s. Load factor improved +2.7 points to 82.4% LF but yield decreased -14.9% to A10.28 cents. There were some significant differences within those numbers, with Qantas International (QAN) suffering a -8.9% drop in (RPK)s to 25.73 billion, while Jetstar International (IMU) experienced a +40.2% leap to 5.53 billion. The group's fleet numbered 237 airplanes at period end, up from 226 the previous year.

(QAN) announced that it has committed A$400 million to reconfigure and enhance its A380s and nine 747-400s. It will eliminate first class (F) on all long-haul airplanes except for 12 A380s that will be dedicated to Los Angeles and UK service. Those A380s, however, will be reconfigured with fewer business class (C) and more premium economy and economy (Y) seats. From 2012, the remaining eight A380s on order will be delivered in a three-class, 550-seat configuration with no first class (F). (QAN) will revamp its newest 747-400s, including its six 747-400ERs, in a 359-seat configuration comprising 58 business (C), 36 premium economy and 265 economy seats (Y).

CEO, Alan Joyce said that the outlook remains tough on the international front, with "the UK and USA still weak." While declining to provide specifics, he said (QAN)'s "international operations are losing money while domestic is making money." He added that "passenger revenue in the second half of this financial year is expected to be higher than the first half as yield continues to improve. Our yield in the month of December had recovered 16.5% from the lows in August." For the full year, (QAN) is forecasting an operating profit in the +A$300 to +A$400 million range.

Lufthansa Technik (DLH) (LTK) and Virgin Blue (VOZ) signed a three-year exclusive agreement "on an innovative repair procedure" for (CFM56-7B) engines powering 737NGs operated by the carrier and its Pacific Blue (PBI) and Polynesian Blue (PLY) entities. All repair work will be carried out by (LTK)'s Airline Support Teams based at its Melbourne subsidiary (LTQ) Engineering, a joint venture between (LTK) and Qantas (QAN). According to (LTK), the agreement covers inspection and replacement of variable stator vane bushings.

Honeywell (SGC) will provide wheel and brake carbon materials for Qantas (QAN)'s fleet of six A380s as well as 14 additional airplanes on order.

A330-202 (1094, VH-EBN), CIT Group (TCI) leased.

March 2010: Air New Zealand (ANZ), Virgin Blue (VOZ), and Qantas (QAN), together with Boeing (TBC) and Australia's Defence Science & Technology Organization, commissioned a world-first study aiming to accelerate the development and commercialization of sustainable aviation fuel in the region. The initiative, which commences in Sydney, is being convened by the Australian and New Zealand group of the Sustainable Aviation Fuel Users Group and will be carried out by the Commonwealth Scientific Industrial Research Organization, Australia's peak scientific body. The study will build on international developments but focus on the unique advantages and challenges. In particular it will look at barriers to a commercial and scalable sustainable aviation fuels industry.

Qantas Group CFO, Colin Storrie announced his resignation "for personal and health reasons" effective March 5. Gareth Evans, currently CFO of the (QAN) airline unit, will fill in for Storrie on an interim basis. The company said it "will consider internal and external candidates" in its search for a permanent successor. Storrie, 41, was appointed CFO & Finance Director in September 2008.

June 2010: Qantas (QAN) will introduce daily A380 service between Melbourne and London Heathrow (LHR) and six-times-weekly A380 flights between Melbourne and Los Angele as its eighth, ninth and tenth A380s are delivered by the end of the 2011 first quarter. The services are expected to be launched by March 2011. (QAN) has six A380s in service and expects to take delivery of its seventh in the final quarter of 2010, enabling Sydney - (LHR) A380 services to go daily.

August 2010: Qantas Airways (QAN) 2009 World Total Passenger Traffic = 99,176 Million (-3.2%) (RPK)s (World Highest #10) (#9); World Total Employees = 33,966 (+0.9%) (World Highest #11). SEE ATTACHED - - "QAN-2010-08-WLD RPK-2009."

The Qantas Group reported a significantly improved profit for the fiscal year ending June 30, and it expects market conditions to improve further through the current six-month period. The group saw its pre-tax profit triple to +A$377 million/+US$337.8 million compared with the prior year. CEO, Alan Joyce noted that (QAN) is one of the few carriers to record back-to-back annual profits and retain an investment-grade credit rating. If current conditions continue, the first half of the 2011 fiscal year “may be materially
stronger” than in the prior year, Joyce said. The improvement in Fiscal Year (FY) 2010 was partly due to the group’s two airline brands — Qantas (QAN) and Jetstar (IMU) — which “provided flexibility to adapt to the changing market conditions,” as well as allowing “responsive and timely capacity management.”

Due to the global recession, (QAN)’s revenue fell by A$610 million to $13.8 billion, with passenger yields down by about -7%. The Icelandic volcano resulted in -A$46 million in lost revenue and extra cost. However, the weaker yield environment was offset by unit cost reductions of -4.3%. Fuel prices were -13% lower, and the QFuture restructuring plan delivered -$533 million in savings and revenue growth.

Yields are improving from the lows during the worst of the industry downturn, with domestic business travel and international demand continuing to strengthen. The domestic leisure market “continues to be highly competitive,” but (QAN) also expects to record better performance in this segment in the first half of the current
fiscal year.

(QAN) elected Gareth Evans, CFO.

(QAN) has warned that it will be seeking new hubs in Europe and thus new travel destinations, because of the UK’s recent decision to halt further runway development at London Heathrow and Gatwick on environmental grounds.

Qantas (QAN) CEO, Alan Joyce said (QAN), while not ruling out other destinations in the UK, is now eyeing Berlin and Madrid as hubs for future growth. “Certainly the UK is important, but we have to look for other gateway opportunities, and with Air Berlin (BER) joining the Oneworld (ONW) alliance, Berlin will be a natural fit,” he said. “We are also looking at Madrid with British Airways (BAB) to build its operations there with the pending merger with Iberia (IBE). Airlines are now making decisions around these new environmental taxes and restrictions such as runways,” he noted.

(QAN) has four slots into Heathrow and will move to an all-A380 operation as soon sufficient airplanes are delivered. It also is looking at other southern European hubs for its low-cost carrier (LCC) subsidiary Jetstar (IMU) from next year. Another part of the equation is the UK's distance-based Passenger Duty Tax, which disadvantages Qantas (QAN) against operators such as Emirates (EAD) that hub from Dubai.

In July last year, the Dutch government was forced to abandon its deeply unpopular "eco tax" on passengers of €11/$14 for intra-(EU) flights and €45 for intercontinental flights from all Dutch airports. The tax was introduced on July 1, 2008, in the face of strong protests by airline and airport groups and resulted in a significant drop in passengers through Schiphol, with most opting to fly to their intended destinations from Belgian or German airports.

Qantas (QAN) said it will boost domestic flights by almost +10% in response to growing demand, particularly from resource-rich Western Australia. The move comes a day ahead of Virgin Blue (VOZ) announcing a total revamp of its product offering to take on Qantas (QAN)’s vice-like grip on the country’s high-end business and corporate travel market.

According to (QAN) CEO, Alan Joyce, (QAN) will add 65 flights a week, while low-cost carrier (LCC) subsidiary, Jetstar (IMU) will add 130. (IMU)'s domestic capacity will jump +30%. "We are seeing improved demand domestically, and the introduction of these additional services and aircraft will see the Qantas Group well placed to meet this demand," Joyce said.

Joyce said Qantas (QAN) would focus on the high-traffic east coast routes, the long-haul Sydney - Perth flight and legs in booming Western Australia.

INCDT: Australian air safety investigators suggest that turbine failure was the cause of the engine explosion on a (QAN) jetliner departing San Francisco International on August 30 for Sydney. In the incident, a gaping hole was torn in the far side of an engine cover, and there were smaller holes on the near side.

October 2010: Japan Airlines (JAL) and Qantas Airways (QAN) expanded their code share agreement to allow (JAL) to place its code on (QAN)'s twice-daily, Singapore Changi - Brisbane service from October 1. (JAL) is suspending its own Tokyo Narita - Brisbane service on September 30 after 22 years of operating the route.

A new code-sharing agreement between Qantas Airways (QAN) and Kenya Airways is expected to help (QAN) boost its presence in the African market. Under the deal, (QAN) will put its code on daily (KEN) flights between Bangkok and Nairobi, and Kenya Airways (KEN) will put its code on daily, (QAN) services between Bangkok and Sydney. The code share will begin on November 15. There is “considerable potential” for growth in both leisure and business travel between Australia and Kenya, says Group Executive (QAN) Commercial, Rob Gurney. Kenya is Northeast Africa’s leading tourism destination,
and Nairobi is the region’s major business and aviation hub, Gurney says. The deal “positions (QAN) well to capitalize on that [market] potential.” Gurney says the code share will complement (QAN)’s existing direct service between Sydney and Johannesburg, which the carrier recently upgraded to daily flights. “We believe this is the ideal time to be enlarging our footprint in Africa, with the [soccer] World Cup in South Africa having delivered global coverage of not just the host country but the continent as a whole,” Gurney says.

November 2010: INCDT: Qantas (QAN) grounded its entire fleet of A380s after a midair engine failure forced an emergency landing in Singapore. There were no injuries in the incident, which occurred about 15 minutes after takeoff, but (QAN) said it would "suspend those A380 services until we are completely confident that (QAN) safety requirements have been met."

Twenty of the 37 A380s in service with Qantas (QAN), Singapore Airlines (SIA) and Lufthansa (DLH) use Rolls-Royce (RRC) engines. Emirates (EAD) and Air France (AFA) use engines built by (GE) and Pratt & Whitney (P&W), respectively.

The European Aviation Safety Agency (EASA) issued an Emergency Airworthiness Directive (AD) for all Rolls-Royce (RRC) (Trent 900) series engines calling for “repetitive inspections of the Low Pressure Turbine stage 1 blades and case drain, HP/IP structure air buffer cavity and oil service tubes in order to detect any abnormal oil leakage” in the wake of the uncontained failure of a (Trent 972) on a Qantas (QAN) A380 on November 4. The (AD) says that “analysis of the preliminary elements from the incident investigation shows that an oil fire in the HP/IP structure cavity may have caused the failure of the Intermediate Pressure Turbine Disc.” It adds that “this condition, if not detected, could ultimately result in uncontained engine failure potentially leading to damage to the aeroplane and hazards to persons or property on the ground.”

The (AD) requires that all engines are inspected within 10 flight cycles of the date of the (AD) and then every 20 flight cycles. Any engine off-wing must be inspected immediately. (EASA) says that if any discrepancy is found, it prohibits further engine operation.

Singapore Airlines (SIA) reported that it had already implemented the (AD) as it knew it was coming and had rearranged its A380 flight schedule to accommodate the extra time required for the checks. (SIA) still has three A380s grounded for engine changes. Qantas (QAN) is keeping its six A380s grounded until at least next week.

Rolls-Royce (RRC) has said the failure of the (Trent 972) and the test-stand failure of a (Trent 1000) on August 2 are unrelated and that the cause of the latter is understood. However, (QAN) engineers and a former Australian Transport Safety Bureau inspector have said that there may be a connection between the two events.

Rolls-Royce (RRC) has advised airlines that up to 34 (Trent 900) engines may have to be replaced, according to airline sources in Sydney, who noted that Singapore Airlines (SIA) may have to replace up to 20 engines in its fleet of 11 A380s, and (QAN) may have to replace 14 engines.

(QAN) said it is still working through the issue with Rolls-Royce (RRC), while a Singapore Airlines (SIA) spokesman said (SIA) is “working with (RRC) on an agreed program, which will cover the replacement of a module in our A380 engines.”

Airbus (EDS) COO Customers, John Leahy told Australian media in Sydney that new-build (RRC) engines had the required modification, understood to be a bearing box, but older engines did not. As of press time, the engine maker had not officially advised its airline customers of the upgrade or a fix for older engines. At the briefing, Leahy said that (RRC) is “constantly upgrading its engines” and that the new engines had a modification relating to the oil leak problem. “The engines on the production line are to a new-build standard and do not have the [oil] problem,” Leahy said.

(QAN) continues to ground its A380s; Airbus (EDS) had offered to fly some new engines out, but that was before the new revelation on the number of engines to be replaced.

Later, by the end of the month, (QAN) returned two of its six A380s to service on the Sydney to London route after some engine changes. (QAN) is limiting take-off thrust to 70,000 lbs instead of the 72,000 lbs for which the engine is certified.

The return to service of (VH-OQF) and (VH-OQE) comes a week ahead of the release of the Australian Transport Safety Bureau’s preliminary report on the uncontained failure of the No 2 Rolls-Royce (RRC) (Trent 972) engine on November 4 after take-off from Singapore.

Last week, (EASA) issued a new Emergency Airworthiness Directive (AD) on the (Trent 900) series engine, which superseded the November 11 (AD) that retains the inspection of the air buffer cavity but also focuses on "the oil service tubes within the high pressure and intermediary pressure structure." (QAN) will not return the A380s to transpacific flights for the time being, as take-offs from Los Angeles sometimes require maximum thrust. (QAN) is due to receive three more A380s before December 31 and all are fitted with upgraded engines.

The European Commission (EC) fined 11 airlines a total of €799 million/$1.1 billion for "operating a worldwide cartel which affected cargo services within the European Economic Area." In a statement, the (EC) said the carriers "coordinated their action on surcharges for fuel and security without discounts over a six-year period." Air France (AFA) received the largest fine at €182.9 million, followed by its affiliate (KLM) at €127.2 million. Other fines include British Airways (BAB) (€104 million), Cargolux (CLX) (€79.9 million), Singapore Airlines (SIA) (€74.8 million), (SAS) (€70.2 million), Cathay Pacific Airways (CAT) (€57.1 million), Japan Airlines (JAL) (€35.7 million), Martinair (MTH) (€29.5 million), Air Canada (ACN) (€21 million), Qantas (QAN) (€8.9 million) and (LAN) Airlines (€8.2 million).

Lufthansa (DLH) and its subsidiary Swiss International Air Lines (CSR) "received full immunity from fines under the (EC)’s leniency program, as it was the first to provide information about the cartel," the (EC) stated.

"It is deplorable that so many major airlines coordinated their pricing to the detriment of European businesses and European consumers," said (EC) VP Competition, Joaquin Almunia. "With today’s decision, the (EC) is sending a clear message that it will not tolerate cartel behavior." The (EC) charged that the "cartel members" coordinated pricing from December 1999 to February 2006.

The (EC) in late 2007 sent out official statements of objections to as many as 25 carriers regarding cargo price fixing. It said that 11 carriers originally charged were not fined.

The (EU), USA Department of Justice, Australian Competition and Consumer Commission and other authorities worldwide have been investigating anti-competitive practices in air cargo since 2005. Cargolux (C LX) President & CEO, Ulrich Ogiermann and Senior VP Sales & Marketing, Robert Van de Weg were recently indicted in a USA court on charges of conspiring to fix and coordinate certain surcharge rates on air cargo shipments to and from the USA.

In a statement, Air France (AFA)/(KLM) said it considered the level of the fine to be "disproportionate given the fact that the economic analysis demonstrated that the actions in question had no detrimental effect on the freight shippers or the freight forwarders. Moreover, the level of the fines disregards the economic hardship that the air cargo industry has suffered, and will have a distortive effect on the level playing field." It added that it intends to appeal the decision to (EU) courts. Because the level of the fine exceeds the level of provisions already taken by the company for potential cargo antitrust payments, (AFA)/(KLM) will book a charge of €127 million for the first half of its current fiscal year.

(SAS) said in a statement it has not been involved in a global cartel and the fines are disproportionate. It also plans to appeal the decision, a process that could take several years. The fines will be accounted for in (SAS)'s third-quarter earnings.

Air Canada (ACN) said in a statement it may appeal the decision and said the penalty is “more than adequately” covered by a C$125 million provision it made in 2008.

"We are highly disappointed and strongly contest the considerable level of the fines, which we believe to be disproportionate to (SAS) Cargo's actions," said (SAS) Chief Legal Officer, Mats Loennkvist. "We have cooperated fully with the (EC) during the entire investigation and, for slightly more than four years, we have disputed the (EC)'s view that (SAS) Cargo has been involved in a global cartel."

December 2010: Qantas (QAN)’s market stranglehold in Australia is set for the most dramatic shakeup since the demise of Ansett (ANS) in 2001, after the Australian competition regulator, the Australian Consumer and Competition Commission (ACCC) gave approval for Virgin Blue (VOZ)’s comprehensive alliance with Air New Zealand (ANZ), reversing a draft decision rejecting the partnership and a draft OK tick for its tie-up with Etihad Airways (EHD). The two alliances underpin a (VOZ) makeover set to be unveiled next month.

(ACCC) Chairman, Graeme Samuel said that the regulator was satisfied that the alliances will “likely benefit passengers in a number of ways including more choice of routes and frequencies, and potentially lower fares, as a result of cost savings and efficiency improvements.”

The Virgin Blue Group of Airlines, CEO & Managing Director, John Borghetti, welcomed the separate decisions saying they were “truly game changing,” adding, “We are extremely pleased that the way is now cleared for us to create a truly global airline that not only offers a great product and service but also greater frequencies and great value for money fares.”

Starting in January, (VOZ) will roll out a series of innovations that will reshape the airline with business class (C), new branding, larger airplanes, color scheme, uniforms and on board offering intended to reshape and reposition the airline.

The alliance with (ANZ), which was previously initially rejected by the (ACCC), involves a coordinated approach to a range of issues including pricing, revenue management, schedules, capacity, and routes flown.

However, Samuel warned that the (ACCC) is still worried that the alliance may negatively affect competition on a number of routes between Australia and New Zealand. To counter this, it "imposed a number of conditions on authorization which are designed to address these competition concerns."

The Virgin Blue (VOZ)/Etihad (EHD) alliance involves joint pricing and scheduling of services across networks and also an addition of capacity between Australia and Abu Dhabi. The (ACCC) said it "considers that the [Etihad (EHD)] Alliance is likely to promote competition and result in benefits for Australian consumers through new international services and increased online connections," Samuels said.

“The Etihad (EHD) partnership will see us establishing an international hub in Abu Dhabi. This will allow us to offer corporate and leisure travelers a very attractive one-stop alternative to more than >14 destinations in Europe, plus the Middle East and Africa," Borghetti said. V Australia (VAZ), (VOZ)’s long-haul airline, will commence direct services from Sydney to Abu Dhabi three times per week in February 2011 and three Brisbane - Abu Dhabi services per week by February 2012.

(VOZ) is awaiting a final determination from USA regulators on its proposed alliance with Delta Air Lines (DAL). The (DOT) tentatively disapproved the deal; however, the Australian government is now lobbying for approval on (VOZ)'s behalf. The (ACCC) has approved that tie up.

The Australia Transport Safety Bureau (ATSB) has issued a Safety Recommendation for all Rolls-Royce (RRC) (Trent 900) engines to be checked within two flight cycles for fatigue cracking within the stub pipe that feeds oil into the High Pressure and Intermediate Pressure bearing structure. The (ATSB)’s recommendation was quickly followed by an (AD) from Australia’s Civil Aviation Safety Authority (ACASA) to Qantas (QAN) and is expected to be followed by an (AD) from the European Aviation Safety Agency (EASA).

The ongoing investigation by the (ATSB), (EASA) and Rolls-Royce (RRC) into the uncontained failure of the No 2 (Trent 972) engine on a (QAN) A380 on November 4 has revealed the oil pipe had “misaligned counter-boring understood to be related to the manufacturing process,” according to the (ATSB). The (ATSB) said the “condition could lead to an elevated risk of fatigue crack initiation and growth, oil leakage and potential catastrophic engine failure from a resulting oil fire.” It added that the misalignment had “produced a localized thinning of the pipe wall on one side. The area of fatigue cracking was associated with the area of pipe wall thinning.”

(QAN) said the “revelation appeared to provide a more definitive explanation for the engine failure that occurred on QF32.” It added that the (ATSB)’s recommendation that "these one-off inspections be conducted within two flight cycles," provides a level of inspection "over and above the current 20 cycle inspection required by the (EASA).”

(QAN) has two A380 airplanes in operational service. It said that both airplanes would be checked immediately. At the same time, (QAN) has filed a statement of financial claim with the Federal Court of Australia against (RRC). (QAN) was granted an injunction by the court, which will ensure it can pursue legal action against the engine maker in Australia under the Trade Practices Act if a commercial settlement is not possible. That claim is expected to run well over >$100 million with the repairs to the A380 alone to top $70 million.

“Today’s action allows (QAN) to keep all options available to the company to recover losses, as a result of the grounding of the A380 fleet and the operational constraints currently imposed on A380 services,” said (QAN) in a statement.

The (ATSB) Chief Commissioner, Martin Dolan credited Qantas (QAN) pilots (FC) with saving the A380 that suffered an uncontained engine failure after take-off from Singapore on November 4. Addressing media in Canberra at the release of the (ATSB)'s interim report on the incident, Dolan said that "the airplane would not have arrived safely in Singapore without the focused and effective action of the flight crew (FC).''

The (ATSB) report also showed that the A380 lost 17 critical control systems and the five pilots (FC) on board, with a combined experience of 72,000 hours, took just under an hour to deal with 54 error messages after debris from the Rolls-Royce (RRC) (Trent 972) engine ripped through the wing. The crew (FC): — a captain, co-pilot and second officer — was bolstered by a check captain and training check captain on QF32.

VP Australian & International Pilots Association, Richard Woodward said the pilots (FC) were forced to deal with an "unprecedented" number of issues during the two-hour ordeal. Dolan said that, while it was impossible to say how close QF32 came to disaster, the consequences of this type of uncontained failure "were very serious." "The most serious damage in terms of scale was the result of one significant part of the turbine disc going directly through the wing of the airplane," Dolan said. While the 54 error messages were demanding, the landing was extremely difficult and passengers were briefed for an overrun.

The relationship between (QAN) and Rolls-Royce (RRC) hit more turbulence after the engine maker’s lawyers failed to show up at an Australian Federal Court hearing to discuss a compensation claim for the grounding of (QAN)’s A380 fleet for 23 days following last month’s uncontained engine failure incident.

In a related development, (QAN)’s seventh A380 (on the production line in Toulouse) required one (Trent 972) engine changed because it was a “Mod A” with the faulty stub pipe thought responsible for the November 4 incident. The airplane is due to be delivered. (QAN) confirmed that it refused to accept the latest A380, named "Charles Ulm" after the pioneer aviator, until the “Mod C” engine was fitted, which was completed Wednesday.

(QAN) filed a 25-page statement of claim in the federal court to negotiate a commercial settlement with (RRC) over loss of earnings— which could run more than >$100 million by some estimates — from the grounding of its A380 fleet. Repairs to the airplane alone could be $70 million. (RRC) countered and filed an application to suppress aspects of the claim, but the judge declined because no lawyers for the engine maker showed up in court. He set a new date of December 16.

In an interview with the Royal Aeronautical Society (RAes), one of the five pilots (FC) aboard the Qantas (QAN) A380 that suffered an uncontained engine failure after take-off from Singapore NovEMBER 4 gave insight into the handling of the emergency on that “extraordinary day.” The (ATSB) has credited the (QAN) flight crew (FC) with saving the airplane and all on board. (QAN) Senior Check Captain David Evans, who was training Route Check Captain Harry Wubben on the flight deck of QF32, told the (RAes) in an interview released December 8 that there “were 43 (ECAM) messages in the first 60 seconds after the explosion and probably another 10 after that. “It was nearly a 2-hour process to go through those items and action each one or not action them depending on circumstances. It was getting very confusing with the avalanche of messages," Evans said.

Once aware of the damage to the wing, with fuel streaming out, Evans said the flight crew (FC) elected not to initiate further fuel transfer in response to a number of the (ECAM) messages. “We elected not to open cross-feed valves and try and transfer fuel in a wing that had obvious damage. We were getting messages about imbalance, losing fuel out of one side and not the other. And those messages were some of the (ECAM) messages that we didn’t follow. We were very concerned about the damage to the galleries, the forward and aft transfer galleries, whether they were intact, whether we should be transferring fuel. We ended up with quite a significant imbalance between the two—nearly 10 tonnes of fuel.”

Giving insight into the complexity of the problems, Evans told the (RAes), “Subsequent to the hydraulic system we lost some braking. The wing brakes went into what they call the emergency system — ‘accumulator only’ — this gives about three or four applications before the accumulator runs out of brake energy. Also the anti-skid on the wing gear. Now, with the antiskid being unserviceable on the wing gear, it’s very important to have the airplane nose gear down that limits the braking on the wing gear to 1,000 psi. If you have lift and not all the weight on the wing gear, you run the risk of locking the brakes up and bursting tires,” he said.

In another complication, Evans recounted to the (RAes) that the computer that calculates the landing speed spat out the problem saying it was unable to calculate that many failures. “So we then looked at them in more detail and rejected ones that we considered minor. After we’d eliminated about three or four items, the computer happily made a calculation and it gave us a touchdown speed of about 165 kt and showed us about 130 m of surplus runway—so it basically said we could stop on the runway.” With the loss of the leading-edge slats and the overweight position, the approach speed was 35 kt above normal,” he said in the (RAes) interview.

Underscoring the severity of the situation, Evans told the (RAes) that (QAN) has since tried to “recreate it in the simulator and we can’t! I think it was just such an extraordinary day.”

See more details in:

Last week, the (ATSB) issued a safety recommendation for all (RRC) (Trent 900) engines to be checked within two flight cycles for fatigue cracking within the stub pipe that feeds oil into the high pressure and intermediate pressure bearing structure. The (ATSB) said that the oil pipe had “misaligned counter-boring understood to be related to the manufacturing process,” and the “condition could lead to an elevated risk of fatigue crack initiation and growth, oil leakage and potential catastrophic engine failure from a resulting oil fire.”

Singapore Airlines (SIA) has also found one engine with a suspected faulty pipe. A spokesman said that (SIA) had one “precautionary engine change” as a result of the inspections. “The engine was removed for a more detailed inspection in the shop.”

January 2011: Qantas (QAN) celebrates 90 year anniversary!


Finnair (FIN) reached a code share agreement with (QAN) for routes between Helsinki and Melbourne, Brisbane, Perth, Adelaide, and Sydney, via Singapore, and between Helsinki and Sydney, via Bangkok. The cooperation begins via Bangkok in February and via Singapore in May, when (FIN) commences its daily operations to Singapore.

Oneworld (ONW) alliance partners Qantas (QAN) and American Airlines (AAL) are to strengthen their longstanding relationship with the first step being the introduction by (QAN) of four times weekly, 747-400 service from Sydney (SYD) to Dallas/Fort Worth International (DFW) from May 16. At the same time, (QAN) has decided to scrap its daily (SYD) - San Francisco (SFO) flights from May 14.

With the announcement, (QAN) said (AAL)/(QAN) will “soon seek to expand their commercial relationship,” including a substantial increase in code sharing and greater cooperation in scheduling, capacity and pricing, pending approval from the Australian Competition and Consumer Commission "and other relevant authorities." The new (SYD) - (DFW) service will be operated nonstop outbound but will stop at Brisbane on the return leg owing to range issues.

The move occurs against a background of growing competition in the USA - Australia market, with Delta Air Lines (DAL) seeking to implement an antitrust immunized (ATI) agreement with Virgin Blue (VOZ), which is already in partnership with Air New Zealand (ANZ).

According to (QAN), the “enhanced commercial agreement . . . will involve coordination of operations between Australia/New Zealand and the USA and deliver considerable benefits for Australian and USA consumers.”

With the new (DFW) service, (QAN) will code share to 13 new USA destinations and three Mexican destinations lifting the number of destinations in the USA, Canada and Mexico served via (AAL) code share to 51.

(AAL) Chairman & CEO, Gerard Arpey said “An expanded relationship and deeper commercial cooperation with (QAN) will benefit consumers, the employees, shareholders and financial supporters of both airlines and will greatly enhance the services offered to passengers by Oneworld (ONW) alliance carriers.”

(QAN) will pay $26.5 million to settle a class action lawsuit brought in the USA relating to air cargo price fixing. The settlement, which is subject to court approval, is based on (QAN)'s freight revenue to/from the USA. In exchange, (QAN) is released from claims made by all class members who were direct purchasers of air cargo services to/from the USA from January 2000 to September 11, 2006. The class action was brought against a number of airlines regarding the activities of their freight divisions. According to (QAN), other airlines that have reached class action settlements are: Air France (AFA)/(KLM) ($87 million), Lufthansa (DLH) ($85 million), Cargolux (CLX) ($35.1 million), Scandinavian Airlines (SAS) ($13.9 million), Japan Airlines (JAL) ($12 million), All Nippon Airways (ANA) ($10.4 million), and American Airlines (AAL) ($5 million).

(QAN) said it "continues to cooperate fully with global antitrust regulators and has resolved its liability and that of its current employees in the USA, Australia, Canada, Korea, and Europe for the improper conduct of its freight division." (QAN) reached a settlement on cargo price-fixing charges with the USA Department of Justice in 2008, paying a $61 million fine. One of its executives, former VP Freight Americas, Bruce McCaffrey, agreed to plead guilty to criminal charges related to fixing air cargo shipment rates and served eight months in jail.

(QAN) signed a Letter of Intent (LOI) with Washington-based Solena Group to investigate the feasibility of a waste-based aviation biofuel production plant in Australia. A (QAN) spokesperson said that the aim is to get a business case for a plant within a year, although (QAN) is some way from establishing cost estimates and investment requirements. “We expect to produce a business case for such a plant within 12 months. While we are still in the early stages of this project, the possibilities are exciting. We hope to announce further details shortly,” the spokesperson said. Should the plans come to fruition, (QAN) hopes it will cut its emissions by -1.5% a year. The proposed plant is similar to one being built for British Airways (BAB) and would use food scraps, grass and tree cuttings and agricultural and industrial waste as a feedstock for the fuel. The spokesperson added, “As part of its comprehensive environment strategy, the Qantas Group has a strong interest in the development of sustainable alternatives to traditional aviation fuel. We are a member of the global Sustainable Aviation Fuel Users Group and we are closely involved with other industry stakeholders in a ‘road map’ study into the outlook for sustainable aviation fuel development in Australia.”

Solena estimates that its biofuel process offers life cycle greenhouse gas savings of up to -95% over fossil fuel-derived kerosene. Projected CO2 savings are 550,000 tonnes per year. Solena formed a (JV) with (BAB) in February last year to build a plant in London by 2014 to turn up to 500,000 tonnes of waste a year into 73 million liters of jet fuel - - enough to fuel 2% of (BAB)’s airplanes at Heathrow.

A380-842 (055, VH-OQI) delivery.

February 2011: Qantas (QAN) reported a statutory net profit for the fiscal first half ended December 31, 2010 of +A$239 million/+$241.7 million, dramatically improved over earnings of +A$60 million in the year-ago period. (QAN) said it had an underlying profit before tax of $417 million for the half-year, +56% up on the year-ago period.

Revenue rose +10% to A$7.59 billion, while expenses climbed +8% to A$7.23 billion. (EBIT) for the period totaled A$364 million, more than double the A$143 million (EBIT) in the year-earlier period.

(QAN) CEO, Alan Joyce said the result built on the Qantas Group’s Fiscal Year (FY) 2010 performance and showed it had emerged from the global financial crisis in a solid position. “The Qantas Group has delivered a strong result and is, again, one of the few airlines to remain consistently profitable and continue to hold an investment grade credit rating,” Joyce said. “All parts of the Group performed well, with Jetstar (IMU) and (QAN) Frequent Flyer delivering record half-year profits and (QAN)’s performance significantly improving.” (QAN) contributed A$165 million, (IMU) A$143 million and the Frequent Flyer program A$189 million.

The grounding of the Airbus A380 last November cost (QAN) A$55 million in the half-year period, while full year impact is estimated at A$80 million, a figure that does not include the cost of repairing the damaged airplane and engines, estimated to be at least A$100 million.

Group traffic (RPK)s rose +6% to 54.5 billion, while capacity (ASK)s increased +7% to 66.8 billion. Passenger numbers increased +9% to 22.94 million with seat load factor down -0.7 pts to 81.7 LF. Yield increased +7% to 11 cents/(RPK).

Air New Zealand (ANZ) will run a special 747 flight from Auckland to Christchurch in the South Island of New Zealand, which was devastated by an earthquake. (ANZ) is charging just NZ$50/$35 a seat and said that fare also applies to any service to and from Christchurch from any point in New Zealand to enable support staff and relatives to get in and people to be evacuated.

All airline services to Christchurch were suspended after the magnitude 6.3 earthquake hit at 12:51 pm local time. The event took out New Zealand’s Air Traffic Control (ATC) radar, which forced a 2-hour halt on all departures to and from the country.

Christchurch-based, (ANZ) CEO, Rob Fyfe advised New Zealand Prime Minister, John Key and Christchurch Mayor, Bob Parker that the airline’s full resources are available to assist in the tragedy, for which the death toll stands at 75 as of press time, according to the Associated Press (AP).

Qantas (QAN), Pacific Blue (PBI), and Jetstar (IMU) are reviewing their operations to Christchurch and are expected to resume services.

In an effort to counter Virgin Blue (VOZ)’s new business class (C) product on domestic Australian services, Qantas (QAN) announced it will deploy internationally configured 747s and A330s with lie-flat beds on transcontinental routes to Perth. It will also provide additional flights and more spacious domestic A330s. Very soon, (VOZ) is expected unveil its new business class (C) product aboard 737NGs and A330s to be added to the fleet from May. Those A330s will be deployed on transcontinental routes.

(QAN) CEO, Alan Joyce said the changes were a direct response to the growing demand for travel to Perth, particularly from business (C) passengers. “Increasing the premium service we provide business customers flying from east to west, will help further cement our position as the ‘Best for Business’ airline,” said Joyce, who noted that passengers in both cabins of the 747 between Perth and Sydney “will experience (QAN)’s globally renowned international service.” He said that business (C) passengers will experience the Skybed business class (C) seats, and passengers in both cabins will have personal In-Flight Entertainment (IFE) options.

(QAN) operates A330-300s, 767-300ERs and 737-800s on its major domestic routes and enjoys a virtual monopoly in the significant business class (C) market, which is particularly strong on transcontinental routes to Perth owing to a resources boom in Western Australia. (QAN) is also adding more services to Perth, lifting capacity by +15% as well as upgrading airplane types. (QAN) will offer 90% of services with wide body equipment from May. (QAN) has also been upgrading its meal service on long-haul domestic flights to international standards.

Strike action looms as Qantas (QAN) and its international pilots (FC) face off over job security and pay rates. (QAN) dismissed claims by the Australian and International Pilots Association (AIPA) that (QAN) flight deck crew job security is imperiled as “completely unfounded” while warning that the pilots (FC)’s wage requests are not viable.

(QAN) said in a statement that it has “not made a pilot (FC) redundant in almost 40 years and there is no threat to the job security of our pilots (FC).”

(QF) rejected (AIPA)'s demand that only Qantas (QAN) pilots (FC) be allowed to fly airplanes operated by other Qantas Group airlines such as its Low Cost Carrier (LCC) Jetstar (IMU). (QAN) pointed out that (IMU) is a separate company that is competing with other low-fare airlines — not with the premium service offered by (QAN).

Outspoken (AIPA) President, Barry Jackson told Australian media that (QAN) management is seemingly eager to destroy its relationship with loyal workers. “We are witnessing the demise of an icon through mismanagement,” he charged. “This is not the first time some of the (QAN) managers have been through this. This dispute is about jobs and whether there will be a recognizable aviation industry based in Australia in the future.” Jackson also warned about job security at (IMU). “It [Jetstar (IMU)] is now being undercut and off-shored at every opportunity, with the imminent formation of more off-shore bases.”

March 2011: Qantas (QAN) has slashed growth plans and warned of management cuts as the airline grapples with unprecedented natural disasters and soaring jet fuel prices. (QAN) CEO, Alan Joyce said that a -A$140 million/-$141 million hit to its bottom line from the recent weather and earthquake disasters necessitates a cut in domestic growth from a previously-planned +14% to +8% and in international growth from +10% to +7% for the second half of its current fiscal year ending June 30. Joyce would not specify the number of management jobs to be eliminated, though some analysts put the number as high as -200. In 2009, (QAN) cut -90 senior managers and 500 middle managers from its ranks. Joyce said he hopes that layoffs can be avoided through employees taking annual and long-service leave.

(QAN) outlined the costs of recent disasters: Queensland floods, -A$60 million; Cyclones Yasi and Carlos, -A$20 million; Christchurch (NZ) earthquake, -A$15 million; and Japan’s earthquake and tsunami, -A$45 million. Additionally, the temporary grounding of its A380s and the resulting impact on passenger confidence cost (QAN) -A$80 million, although that cost will be recovered from Rolls-Royce (RRC).

“There has never been a time when the world faced so many natural disasters, all of which have come at a significant financial cost to the Qantas Group,” Joyce said. “We need to act decisively to respond to rising fuel costs and natural disasters, just like we did during the global financial crisis, to ensure the ongoing sustainability of our business.”

In February, (QAN) reported a statutory net profit of +A$239 million for its fiscal first-half ended December 31, 2010, a significant improvement over earnings of +A$60 million in the prior-year period. Joyce said the price of Singapore jet fuel has increased from around $88 per barrel in September 2010 to more than >$131 per barrel today.

The Qantas Group is also suspending four return weekly, Jetstar (IMU) services from Australia to Japan until the end of August and suspending its Perth - Tokyo Narita route from May 8, while reducing other services. The airline will also cut domestic New Zealand flights as that country's economy reels from the impact of the Christchurch earthquake.

(QAN) has already increased domestic airfares and international fuel surcharges in February and March, while Jetstar (IMU) increased fares in selected domestic and international markets. However, while the airline is striving to increase prices, discount airfares are at the lowest level ever, according to government data. As a result of the reduction in growth, (QAN) will retire two 767s.

May 2011: Qantas (QAN) launched four-times-weekly, Sydney - Dallas Fort Worth 747 service.

(QAN) aircraft engineers (MT) threatened work stoppages after walking out of negotiations over their list of 28 demands, which included job security. Australian Licensed Aircraft Engineers Association (ALAEA) Federal Secretary, Steve Purvinas told media that (QAN) has not allayed concerns over job security. The (ALAEA) represents 1,600 of (QAN)'s 5,000 engineers (MT) who perform day-to-day line maintenance work and heavy engineering.

For the second time in two months, (QAN) CEO, Alan Joyce lashed out at “ridiculous” union demands and warned that (QAN)’s international operations are losing money. Speaking at the launch of (QAN)’s first Sydney - Dallas nonstop service, Joyce labeled (ALAEA)’s laundry list of demands—such as Qantas Club Membership — as “reckless and unrealistic.” (QAN) engineers (MT) had already called off the last planned work stoppage owing to concerns about technical difficulties with (QAN) planes.

“What we are faced with are unbelievable claims and the public would be shocked by them," said Joyce. "We simply can’t agree to them."
Joyce sent a sobering message to the (ALAEA) and the Australian & International Pilots Association (AIPA), warning that (QAN)'s international operations were in the red and the group was propped up by the frequent flyer program and low-cost carrier (LCC) Jetstar (IMU). “We have huge challenges and [are] finding it hard to compete and our international market share is declining,” Joyce said, noting there was “no silver bullet” to fix (QAN) but he wanted to grow the airline with a mix of operations, including Asia-based options such as Jetstar Asia (JSA). He would not confirm rumors that (QAN) would set up a new premium airline in Singapore or Kuala Lumpur to reduce costs.

Joyce said that the (ALAEA) claims alone would total A$160 million/$180 million over three years, while the international pilot (FC)’s demands would see the failure or contraction of some of (QAN)’s low-cost divisions, which have been the most profitable in recent years. As well as a pay increase, (AIPA) wants pilots (FC) of other airlines that carry a (QAN) flight number, such as American pilots (FC) flying a domestic USA sector with a (QAN) flight number, to get paid what (QAN) international pilots are paid. On the issue of job security — a major demand of both unions — Joyce reminded pilots (FC) that (QAN) has not made any pilot (FC) redundant since the 1970s.

(ALAEA) has called a four-week truce on strike action, but (AIPA) has warned it will seek approval to conduct a secret ballot of members to authorize protected industrial action unless management has signaled a change of heart on job security issues.

Joyce last month slammed the unions representing the airline's engineers (MT), pilots (FC) and baggage handlers, saying that they are conducting a "kamikaze" industrial campaign that will "kill jobs"

(QAN) Group Executive Operations, Lyell Strambi said that passengers could continue to travel with confidence with only minor delays expected. Strambi said the union was misrepresenting their claims for increased wages and conditions. "The cost of the union's claim is +28.6% over three years, with further increased costs being incurred in subsequent years, bringing the real cost to above 36%," he said. However, Purvinas said the wage claim "is modest" and less than inflation. "What interests us more is job security, and for aircraft engineers (MT), that means simply being able to carry out aircraft maintenance in Australia," he said.

American Airlines (AAL) and Qantas (QAN) said they are seeking approval for a joint business agreement (JBA) "on their services between Australia/New Zealand and the USA, within these regions and beyond to third countries." Approval of the agreement by the respective national regulators would permit them to cooperate on planning, marketing, scheduling and pricing, and share revenues on the routes.

The airlines said that (QAN) has filed for approval of the (JBA) with the Australian Competition and Consumer Commission (ACCC) and will also seek permission from the New Zealand Minister of Transport. The USA Department of Transportation (DOT) must also review and approve the application. "This agreement has the potential to make traveling between Australia and the United States — and beyond — considerably more attractive for our customers, with better fares, improved connections and increased frequent flyer benefits," said (QAN) Group Executive Commercial, Rob Gurney.

"By strengthening and broadening further our cooperative business partnership with (QAN), (AAL) will be better positioned to deliver enhanced benefits to our joint customers," stated (AAL) CCO, Virasb Vahidi, adding, "(QAN) is one of our longest standing and most highly valued partners, and together we are creating a new joint platform from which to launch significant growth in air travel between North America and the South Pacific."

Earlier this month, the (DOT) tentatively approved antitrust immunity (ATI) for Delta Air Lines (DAL) and Virgin Australia (VOZ)/(VAZ)/(PBI) to coordinate services between the USA and Australia. The deal was approved by the (ACCC) last December.

INCDT: A Qantas (QAN) A380 en route from Singapore to Melbourne was caught short on fuel, forcing it to divert to Adelaide (ADL). QF Flight 10 encountered stronger-than-forecast head winds associated with an unseasonably cold weather affecting the eastern states of Australia, which forced the crew to land at (ADL).

The (QAN) flight, with 249 passengers, landed safely at 4:15 am local time during the city’s curfew after an emergency was declared. A (QAN) spokesman said the likely reason for the fuel issue was “as a result of changed flight conditions en route.”

(QAN) also inspected the airplane for a possible fuel leak but none was discovered. "The airplane was inspected by engineers (MT) in Adelaide and no issues were found and we will certainly be inspecting the airplane again before it operates its next sector, which is scheduled this afternoon," said the spokesman.

The Australian Transport Safety Board (ATSB) will investigate the incident.

June 2011: Airline operations in Australia and New Zealand were thrown into chaos by ash from Chile’s Puyehue-Cordon Caulle Volcano eruption - - SEE PHOTO - - "QAN-2011-06-CHILE VOLCANO ERUPTION."

Qantas (QAN) and Jetstar (IMU) canceled all operations from Melbourne, Tasmania and to and within New Zealand on Sunday, June 12 and Monday June 13, while other airlines limited operations in the affected areas. The ash cloud now stretches almost around the globe in the roaring forties latitudes and is located at altitudes of between 6,000 m and 10,600 m/19,680 ft - 32,800 ft. It temporarily grounded air service to, from and within Argentina the previous week.

In contrast to the Australian airlines, Air New Zealand (ANZ) and most international airlines said they would continue operating normally, flying either above or below the cloud or flying longer routes to avoid it where required. Puyehue began erupting June 4, with the initial ash plume reaching above 15,240 m.

More dense ash areas to the south and west are expected to affect airline operations in Australia over the next week. New Zealand’s Civil Aviation Authority and Australia’s Civil Aviation Safety Authority are monitoring the cloud in conjunction with both countries' volcanic ash centers and weather bureaus.

Airservices Australia and New Zealand’s Airways are also involved, liaising with airlines to develop new flight routes around the cloud. Decisions on whether or not flights will operate are being made by individual airlines and operators, Airservices said. “The airlines will make decisions on how flights operate based on a careful assessment of all the information,” a spokesperson explained.

Australian and New Zealand air travelers faced another day of travel disruptions as Perth Airport on the west coast was affected by the ash cloud from Chile’s Puyehue-Cordon Caulle Volcano eruption. Qantas, (QAN), Virgin Australia (VOZ) and a host of smaller domestic operators canceled up to 200 flights from the capital of Western Australia as the ash cloud crossed the southwest corner of the country.

According to the "Associated Press," more than >70,000 customers in Australia and New Zealand have been affected by the cancellations since the weekend (June 10/11). So far, more than >1,000 flights have been canceled since the volcano erupted on June 4.

The Australian Competition & Consumer Commission (ACCC) granted interim approval for the proposed joint business agreement (JBA) between Qantas (QAN) and American Airlines (AAL) "on their services between Australia/New Zealand and the USA, within these regions and beyond to third countries."

(QAN) CEO, Alan Joyce hailed the (ACCC)’s conditional approval and said the proposed (JBA) would result in significant benefits for Australian and USA consumers. "This agreement has the potential to deliver better fares, improved connections and more frequent flyer benefits," Joyce said, noting it will "build on (QAN)’s new service to Dallas/Fort Worth, a key (AAL) hub. We code share with (AAL) to 52 destinations beyond Dallas/Fort Worth and both airlines are committed to further strengthening this relationship."

The agreement does not include revenue sharing, although the (JBA) does create a shared financial objective. It still requires approval from the New Zealand Minister of Transport and the USA Department of Transportation.

Qantas Airways (QAN) will sponsor Malaysia Airlines (MAS)'s entry into the Oneworld (ONW) alliance as it looks to form a close partnership with (MAS) as part of its plan to lift its share of the Asian market.

(MAS) CEO, Azmil Zahruddin said that the airline had carried out a careful analysis of the alliance options and concluded that "the time is clearly right for our company to join one of the global service groups and the (ONW) alliance is clearly the best option for us."

"The (ONW) alliance already features four of the best airlines in the Asia-Pacific, including member-elect, Kingfisher Airlines (KFH)," said (ONW) alliance CEO, Bruce Ashby. "Adding another leading Asian carrier, in (MAS), will greatly enhance the (ONW) alliance's offering throughout the world's fast growing region for air travel demand."

(QAN) CEO, Alan Joyce said (QAN) had been talking to (MAS) for quite some time and would help make the necessary changes for (MAS) to join the (ONW) alliance by the end of 2012. However, he said the entry of (MAS) into the (ONW) alliance would not diminish (QAN)'s presence in Singapore. "I think it opens up opportunities for (QAN) going forward," Joyce said. "However, we will still have a big operation in Singapore." He added, "We are keen to discuss how we can cooperate in the Malaysian and South-East Asian markets. That dialogue will continue; we think there is a lot of opportunity for us to work together."

Rolls-Royce (RRC) agreed to pay Qantas Airways (QAN) A$95 million/$100 million in full settlement for last November's uncontained failure of a (Trent 900) engine on a (QAN) A380.

The announcement came as part of (QAN)'s disclosure of a forecast profit before tax of +A$500 million - +A$550 million for the year ended June 30. (QAN) reported a profit before tax of +A$417 million for the half-year to December 31, 2010.

(QAN) has blamed disruptions from several significant weather events and natural disasters for an A$206 million hit to the bottom line, worse than its earlier guidance of an A$140 million hit. The revised figure includes an A$21 million cost from the disruptions caused by ash from Chile's Puyehue-Cordon Caulle Volcano as of June 20.

In a statement to the Australian Stock Exchange, (QAN) said that "these events reflect a more challenging operating environment, with significantly higher fuel prices than in the first half."

(QAN) CEO, Alan Joyce said the forecast reflected the underlying strength of the Qantas Group portfolio. "Considering the challenges facing the aviation industry, this is a very good result — the Qantas Group's best since the global financial crisis," he stated. "The combination of our two domestic flying brands — Qantas (QAN) and Jetstar (IMU), together with Jetstar International (IMU), Qantas Frequent Flyer and Qantas Freight — has enabled us to withstand a number of major events affecting our performance."

However, Joyce said that Qantas International (QAN) is forecast to generate a loss before interest and tax of approximately -A$200 million, on invested capital of more than >A$5 billion, with a worse result expected next year. "Qantas International (QAN) is the group's weakest business — it has achieved required returns only three times in the past 15 years. Clearly the situation is not sustainable," he conceded. "However, we are developing a long-term strategy aimed at restoring competitiveness and profitability."

(QAN) will likely announce a major shakeup of Qantas International (QAN) later this year.

July 2011: Former Australia Civil Aviation Safety Authority Chairman, Dick Smith (also one of the country's most controversial and outspoken entrepreneurs) has infuriated airline unions by predicting that Qantas International (QAN) will go bankrupt unless it moves its operations to Asia. Speaking with "The Australian," Smith warned that high wages and government policies that opened up routes to/from Australia to too many carriers, had put (QAN)'s mainline international operations in danger. He claimed that (QAN) was in a similar position to manufacturers forced to move offshore because of an inability to compete with lower-cost competitors.

Smith told "The Australian" that servicing on airplanes in Singapore was -50% cheaper than in Australia, and many airlines were operating at much lower costs than (QAN). "I feel sorry for [(QAN) CEO] Alan Joyce, I feel sorry for the pilots (FC) and I totally blame the government," he said. "The politicians have decided that we should have this "open skies" [regime] where you have to compete with completely different wage scales and salary scales. If they [QAN] don't move virtually everything up into Asia, they will go broke."

Joyce will announce major structural changes to (QAN) on August 24 with many services to be cut or restructured. There are also strong indications that Joyce will set up an Asian-based, full-service airline.

Smith's comments angered pilot (FC) and engineers (MT) unions worried about job security and poised to take industrial action. Responding, Australian Licensed Aircraft Engineers Association Federal Secretary, Steve Purvinas told "The Australian," "Anyone can get a cheap fix done on a car — unfortunately, in our game, when something is missed, it tends to resurface at 30,000 ft."

Australian & International Pilots Association VP, Richard Woodward slammed Smith, saying Smith had never worked as a professional pilot (FC) or at an airline. "Sure, things are tough out there, but there are other international carriers making significant amounts of money right now in these difficult times," Woodward said.

(QAN)’s long-haul pilots (FC) voted overwhelmingly for industrial action—expected to take place in early August — to drive home demands for higher wages, re-grading and job security. The move threatens to bring (QAN)’s long-haul operations to a standstill. The industrial action will also impact many transcontinental domestic services to Perth from Sydney and Melbourne, which are flown by international flight crews (FC).

The Australian and International Pilots Association (AIPA), which represents 2,500 pilots (FC), said 89% of eligible pilots (FC) voted in the ballot, with 94% voting to take protected industrial action for the first time since 1966.

The (AIPA) said pilots (FC) have a list of demands that include twice-a-year confirmed economy travel on top of the usual travel benefits and a re-grading of all pilots (FC). However, the most crippling demand relates to code share flights where (QAN) uses Jetstar (IMU) services, particularly to leisure destinations. (QAN) pilots (FC) are demanding an end to the practice, which would significantly cut back (QAN)’s network.

In April, (QAN) CEO, Alan Joyce slammed the unions representing (QAN)'s pilots (FC) — and engineers (MT) and baggage handlers — saying they are conducting a “kamikaze” industrial campaign that will “kill jobs.” Joyce will announce a major restructure of (QAN)’s loss-making international operations on August 24. In May, (QAN) engineers (MT) called off a strike owing to technical concerns over (QAN) airplanes.

(AIPA) President, Barry Jackson said pilots (FC) will now decide on what form of protected industrial action they will take.

“(QAN) pilots (FC) dedicate their careers to looking after (QAN) passengers, so naturally we will be doing everything possible to minimize disruption to travelers and focus the pressure on management,” he said. “We believe and the public believes that when you board a (QAN) flight, you are entitled to a (QAN) pilot (FC) in the cockpit. That’s part of the deal when you fly (QAN). You expect the world-leading safety culture of Australian (QAN) pilots (FC). Yet we now have a CEO who believes you can substitute Australian (QAN) pilots (FC) with outsourced and offshore alternatives without doing damage to the brand. He’s dead wrong.”

However, the problem for the pilots (FC) and (QAN) is that Australians in increasing numbers are turning their backs on (QAN). (QAN)'s share of international traffic has slumped from 40.3% in 1995 to just 18.5% last year, with Jetstar (IMU) accounting for 8%. Low-cost airlines, including (IMU), now account for 19.5% of traffic into and out of Australia.

(QAN) declared that its future is in China, the world’s second biggest and fastest growing aviation market, but (QAN) needs its staff to embrace the radical change to succeed. (QAN) CEO, Alan Joyce warned that “out of touch union leaders” who are resisting change don't understand that (QAN)'s costs are +25% above its competitors such as Singapore Airlines (SIA). “Globalization continues to change our world in profound ways and it is still changing the way we work, consume and engage — and it is still driving relentless competition,” said Joyce. “Globalization is not optional and it is not over.”

According to Joyce, China is already home to seven of the world’s top 20 airports by capacity. “By 2020, China will have 15 cities with bigger populations than Sydney and the region will be home to 2.6 billion people. And by 2030, the country expects to have at least three globally recognized international airline hubs, 10 national and regional hubs and at least 244 airports,” he said.

But to capitalize on the booming China and Asia market, (QAN) needs significant change, cautioned Joyce. “Change is always tough. But the competitive challenges we face make major change essential, and our commitment to the change process is absolute,” he said. The CEO noted a significant upside: “I believe we have a major opportunity to go beyond the natural limitations of our market size and geography, to become a champion Australian company in a globalized region and world.”

Joyce noted that (QAN) subsidiary Jetstar (IMU) operates Asia’s largest and fastest-growing low-fares network. “That is an amazing achievement for an Australian airline,” he said.

On August 24, (QAN) is expected to announce a major restructure of its international operations and a new joint venture (JV) to establish an airline in Asia, which will be based in either Malaysia, China or Singapore. Joyce said that the future is “wrapped up in even deeper alliance partnerships and further joint ventures,” but such sentiments do not sit well with unions that fear outsourcing.

According to Joyce, some of the airline’s union leaders are “simply out of touch and trying to block our use of new business models” and that could scuttle expansion plans. Joyce also claimed that some unions are blocking efficiencies that can be delivered by new maintenance technologies.

“Less than a month ago, Australia’s Civil Aviation Safety Authority issued new aviation maintenance regulations that bring Australia into line with European standards and global best practice,” said Joyce.

The new regulations finally recognize the quantum leap in aviation technology, particularly in the sophisticated information, material and design technologies that underpin new airplanes. However, Joyce said the (QAN) engineers’ union is resisting the change. “Our maintenance and repair costs are among the least efficient and most expensive in the world,” he stated. “It’s time to catch up. We don’t repair our cars the same way we did 40 years ago. We can’t repair our planes the same way either. We can — and we will — be safer, smarter and more efficient.”

(QAN) is in a bitter dispute with both its engineers (MT) and long-haul pilots (FC), who have voted for industrial action expected to take place in early August.

August 2011: Qantas (QAN) posted a net profit of +A$249 million/+$260 million for its fiscal year ended June 30, more than doubling last year’s profit of +A$116 million, but second-half profit slumped -83% to +A$9 million.

(QAN) said the impact of natural disasters, including severe weather in Australia and the UK, earthquakes in New Zealand and Japan, and the Chilean volcanic ash cloud, cost (QAN) A$244 million. Fuel costs increased +12% to A$3.73 billion.

Full-year revenue was up +8% to A$14.9 billion, while operating costs increased +7% to A$12.43 billion. (QAN)’s Frequent Flyer program was again the best performer, contributing an (EBIT) of A$342 million with (QAN) delivering A$228 million, low-cost subsidiary, Jetstar (IMU) A$169 million, and Qantas Freight A$62 million.

However, the (QAN) mainline result was affected by a -A$216 million loss on international routes. Passenger numbers rose +7.3% to 44.4 million, while (RPK)s increased +6% to 106.7 billion, and (ASK)s were up +6.9% to 133.21 billion, easing load factor 0.7 points to 80.1% LF. Qantas (QAN) International recorded a modest +1.3% increase in passengers to 5.97 million, while Jetstar (IMU) Domestic saw a +16.6% increase in passengers to 9.75 million. Yield increased +5.8% to 10.9 Australian cents.

Australian Federal Transport Mminister, Anthony Albanese said the government was adamant that (QAN) would remain Australian-owned but that would not rule out an equity buyout with majority Australian control.

In 2007, an international consortium led by the Macquarie Bank and the Allco Finance Group launched an unsuccessful $11.1 billion bid to take over the airline.

(QAN) CEO, Alan Joyce talked up (QAN)’s future and said it had received a “no private equity take-over bid." “Australia ranks 51st in the world by population but we have the 11th largest airline based on passengers and distance flown,” Joyce said. “We punch above our weight and we have made a profit in every year since privatization.”

The Australian Consumer and Competition Commission (ACCC) has issued draft approval for the Joint Business Agreement (JBA) between Qantas (QAN) and American Airlines (AAL) for Pacific routes between the USA and Australia/New Zealand and the networks that support those routes. Australia’s competition regulator said it did not believe the (JBA) would be anti-competitive and would lead to consumer benefits. It said the applicants propose “to coordinate all business operations, including flying operations, pricing and revenue management, scheduling, cargo, passenger sales and marketing, airport services and frequent flyer programs.”

The (ACCC) said it “considers that the (JBA) is likely to result in new and improved products and services (including improved schedules and connectivity, a greater choice of connection and stop-over options, and the possibility of new and improved routes) and enhanced value-added services (including reciprocal lounge access, equivalent frequent flyer privileges and improved check-in procedures).”

According to the (ACCC), “the (JBA) will provide the applicants with an incentive to offer new fare products, which may result in lower fares on many transpacific routes.”

The (ACCC) will seek further submission before issuing a final determination. The (JBA) still requires approval from the New Zealand Minister of Transport and the USA Department of Transportation (DOT).

Qantas (QAN) pulled its airline safety video featuring Ambassador-at-Large, John Travolta as part of the ongoing industrial dispute with long-haul pilots (FC), according to Australian and International Pilots Association (AIPA). Travolta, who has been fronting (QAN)'s safety video, says in the video there is no one he would rather have flying the plane than a (QAN) pilot (FC). However, the union said this message conflicts with management's stance in the industrial dispute over outsourcing.

The (AIPA) insists that all (QAN) flights be crewed by pilots (FC) employed on terms and conditions of its Australian-based members. The union also wants pilots (FC) flying for Jetstar (IMU), (QAN)'s low-cost carrier (LCC) subsidiary, to be paid the same rate as (QAN) pilots (FC) if their flight is carrying a (QAN) flight number.

(AIPA) VP, Richard Woodward said the video's removal indicates (QAN) CEO, Alan Joyce is "eager to outsource (QAN) jobs to overseas pilots (FC)." However, a (QAN) spokesman said the pulling of the video "has absolutely nothing to do with" the industrial dispute with long-haul pilots (FC). "It was always intended to be a temporary feature," he stated.

(QAN) Head Corporate & Government Affairs, Olivia Wirth said that if (QAN) agreed to the union's pay demands for all flights, "it would drive up fares." She claimed, "The (APIA) wants to force all (QAN) affiliate airlines, including Jetstar (IMU), to pay their pilots (FC) the same premium rates and conditions as (QAN) pilots (FC)."

(QAN)'s plans to restructure its international division include creating more airline alliances, a re-jigging of fleet plans, and scrapping some routes. But it will not include any major transfer of routes to Jetstar (IMU), according to one (QAN) source.

Later, Qantas (QAN)announced a major restructuring that could see it buy 110 new planes, cut up to -1,000 jobs and launch two Asia-focussed airlines as it bids to stem financial losses. The bold new strategy for its international operations will include (QAN) slashing positions, while deferring delivery of six A380s for up to six years to keep costs down.

Part of the business plan will also see (QAN), Japan Airlines (JAL)/(JAS) and Mitsubishi Corporation launch a new low-cost carrier (LCC) domestic airline, "Jetstar Japan" by the end of next year.

(QAN) plans also to set-up a new joint-venture (JV) premium airline based in Asia, with the location yet to be finalised as it sets its sights firmly on the growth region.

(QAN) has been grappling with disasters and surging fuel costs that have hit its bottom line, with a string of natural disasters this year costing it Aus$206/US$218 million.

CEO, Alan Joyce has previously said he expects (QAN)’s international operations to record a loss of -$Aus200 million before tax, and said change had to happen. “Qantas International (QAN) is a great airline with a proud history,” he said. “But it is suffering big financial losses and a substantial decline in market share. To reverse that decline we need fundamental change. “To do nothing, or tinker around the edges, is not an option.”

The key objective of the new five-year plan is to return (QAN)’s international operations to profitability, with a new focus on Asia.
“As a nation we used to fly over or via Asia, on our way to Europe,” said Joyce. “Now we fly to Asia, both for business and relaxation. And as Asian economies grow, the future will be about travel to and within Asia.”

But the plans were lashed by the Australian and International Pilots Association (AIPA), which warned of strike action. “(This) is exactly what (QAN) pilots (FC) have been warning of for months: a shift of Australian (QAN) operations into Asia to start employing people working to Asian conditions and standards,” said (AIPA) President, Barry Jackson. “Until we get an assurance from Alan Joyce that future (QAN) flights will be operated by (QAN) pilots (FC), we will be doing everything we can to stop this destructive strategy for (QAN)’s future.”

As part of the focus on Asia, (QAN) will strengthen its relationship with British Airways (BAB), which will carry more passengers between (QAN)’s Asian destinations and Europe.

From early 2012, (QAN) will still fly from Australia to Bangkok and Hong Kong, but British Airways (BAB) will operate the Bangkok - London and Hong Kong - London sectors.

(QAN) also announced its new gateway to South America would be the Chilean capital, Santiago, replacing its Sydney - Buenos Aires route.

To meet its objectives, (QAN) will buy up to 110 A320 airplanes to support fleet renewal and growth over the next 10 to 15 years, with 194 rights and options on further purchases. Joyce said the purchases would position (QAN) “very strongly in the competitive Asia - Pacific aviation market, while containing costs”. “The first of the A320s will be allocated to the new "Jetstar Japan" joint venture (JV) between the Qantas Group, Japan Airlines (JAL)/(JAS) and Mitsubishi,” he said. The (JV) will be one-third controlled by each company and commence by the end of 2012 with three new A320s, growing to 24 airplanes.

It will initially fly domestically from Tokyo’s Narita airport and Osaka, with plans to offer short-haul international services to key Asian cities.

A new premium joint-venture (JV) airline based in Asia is also core to (QAN)’s revised strategy. It will not be branded under the Qantas name but will use (QAN)’s know-how. Eleven A320 airplanes will initially be used, Joyce said.

(QAN)/(IMU)/(JSA) has selected for the first time, A320 airplanes to launch its new premium airline to service routes to/from Australia and the Asian region. In addition, Jetstar (IMU)/(JSA) has selected the A320 to continue its growth in Australia and Asia. The commitment to order a minimum of 106 A320 Family airplanes includes 78 A320neo jets.

Qantas (QAN)’s engineers (MT) union has announced one-hour weekday stoppages through mid-December, escalating (QAN)’s long-running industrial problems. The Australian Licensed Aircraft Engineers Association (ALAEA) has instructed it members to strike in different cities each week, causing knock-on delays across the network.

The escalation follows an acrimonious breakdown in talks between the (ALAEA) and (QAN) management after what (QAN) called “aggressive and inappropriate behavior” from a union official.

Relations between the airline and a number of unions disintegrated after (QAN) announced it would make -1,000 lay-offs, route cuts, airplane retirements and deferrals as part of a restructuring that also includes the launch of new Asia-based airlines.

(ALAEA) Federal Secretary, Steve Purvinas said that the union does not believe that (QAN)’s international division is losing money. “The airline has not responded to a list of 61 question on the subject sent on August 10,” he said.

The union queries how costs are being allocated and also the benefit to the domestic airline of having an international operation. (QAN) has offered the union briefings with (QAN) CEO, Alan Joyce and the airline’s auditors. The pilots (FC)’s union, the Australian and International Pilots Association, will meet to decide on a similar escalation of action.

Until now the pilots (FC)’s campaign has been confined to not wearing hats and announcements to passengers. That is expected to change significantly, but an all-out strike is considered unlikely as it would risk losing public support similar to what happened in the protracted and bitter 1989 domestic pilots (FC)’s strike. Many pilots (FC) lost their jobs in that dispute and their places were snapped up by foreign pilots (FC).

September 2011: The Australian Competition and Consumer Commission (ACCC) gave final approval for the Joint Business Agreement (JBA) between Qantas (QAN) and American Airlines (AAL). This follows last month’s draft approval for the two carriers to coordinate operations on Pacific routes between the USA and Australia/New Zealand and the networks that support those routes.

“The (ACCC) does not consider that the (JBA) will have any anti-competitive effects, as (QAN) and (AAL) do not currently provide any overlapping direct services on the transpacific routes,” the (ACCC) Chairman, Rod Sims said.

(QAN) welcomed the (ACCC) final approval.

“The launch of (QAN)’s services to American’s Dallas/Fort Worth hub earlier this year has opened up unprecedented access to North America for (QAN) customers through code shares with (AAL),” said (QAN) Group Executive Commercial, Rob Gurney.

(QAN) has reaffirmed its commitment to the Boeing 787 program, despite the long delays. (QAN) Group Executive General Manager Operations, Lyell Strambi said, “If the 787 lives up to its promise, it will be a major draw card. It will stand out in customers’ minds and I think it will be the plane of choice.”

Strambi confirmed that while the first 787-8s would go to its low-cost carrier (LCC) subsidiary, Jetstar (IMU), the first 787-9s due in 2014 would more likely go to (QAN) first. However, Strambi stressed that no final decision has been made on precise timings and placement within the group.

(QAN) has 50 787s on order; Strambi pointed out (QAN) has another 50 options. In the longer term, Strambi sees a three-airplane (QAN) fleet (A380, 787 and 737).

(QAN) will shortly be taking delivery of a 737-800, its 175th Boeing narrow body airplane. (QAN) took delivery of its first Boeing, a 707-138, on June 26, 1959, and ordered 737s from the Renton division after its merger with Australian Airlines in 1996.

It also inherited a fleet of 11 717s when it took over Impulse Airlines in 2001. Australian Airlines ordered 18 727s under its former name Trans Australian Airlines, and then 32 as Australian Airlines.

October 2011: INCDT: A Qantas (QF) 747-400, en route from Bangkok to Sydney on Sunday, October 17 returned to Bangkok an hour into the flight following the contained failure of one of its Rolls-Royce (RRC) (RB211) engines. There were no injuries among the 356 passengers and crew.

The failure is believed to be related to the distortion of the compressor case, resulting in the cracking and disintegrating of fan blades. The latest incident is (QAN)’s ninth involving the (RB211) since February 2009. (QAN)'s (RB211) failure rate is three times the industry average.

Rolls (RRC) issued a service bulletin on (RB211) (HPC) blades in 2006 but in 2009 opted to redesign the blades. (QAN) has fast-tracked (RB211) engine modifications and has modified an estimated 40% of its fleet. It has also altered the way it operates its 747s because other airlines do not have the same failure rate.

(QAN) closed its (RB211) engine shop a few years ago and has had to rely on (RRC) to complete the modification work. When the shop closed, (QAN) expected most of its 747s would be quickly replaced by Airbus’s 450-seat A380s and Boeing’s 250 - 340 seat 787s.

However, the A380 deliveries were two years late and the 787 program is four years late, turning (QAN)'s fleet and maintenance planning into disarray. (QAN) has ordered 50 787s; it was supposed to receive one a month from August 2008 but now will not get its first delivery until late next year.

Australia’s Civil Aviation Safety Authority (CASA) has deemed the (RB211) safe even without the modification. (CASA) said it was unable to comment pending further details of the incident.

Qantas (QAN) will increase 4X-weekly, Sydney - Dallas Fort Worth service to 6X-weekly, January 15 and to daily, on July 1.

(QAN) started the month with costly union disruptions, including more work actions by mechanics (MT) and ground handlers (which happened to be a busy travel period because of school holidays and some big sporting events in the area). (QAN) says 8,500
domestic and international passengers were affected.

(QAN) faces an unprecedented industrial action after the Australian Licensed Aircraft Engineers Association (ALAEA) warned of a series of full-day strikes leading up to Christmas to support wages and job security claims. The (ALAEA) canceled a threatened 4-hour stoppage over a technical issue but 11,000 passengers were still disrupted.

The union immediately called for another 4-hour stoppage later and warned passengers to book with another airline. (ALAEA) Federal Secretary, Steve Purvinas said that by October 28, there “will be full-day stoppages.” Purvinas also warned it would be a lengthy campaign and may last a year.

(QAN) was forced to bring forward, cancel or delay 77 domestic and 11 international flights because of the planned rolling 4-hour stoppages, which were to hit Melbourne, Sydney, and Brisbane.

The Transport Workers Union (TWU), which represents baggage handlers, will hold two 2-hour stoppages across the network.

According to (QAN), the total cost of (ALAEA)’s claim is A$165 million/$161 million — plus A$95 million to build a new hangar.

(QAN) said engineers (MT) have a list of demands, including a +15% increase in wages and allowances over three years, putting their salary at around A$170,000 in January 2013.

(QAN)’s long-haul pilots (FC) have taken a far more low-key approach to their dispute with (QAN) and have confined their action passenger announcements and uniform-related issues. The pilots (FC) are pressing for wage and grade increases, plus job security provisions.

(QAN) said that the ongoing labor dispute was costing (QAN) approximately -$16 million per week in lost revenue.

Later, industrial arbitrator, Fair Work Australia ruled the industrial action must be terminated. This is subject to approval from the regulator.

The move comes after (QAN) grounded its entire domestic and international fleet, in a move designed to force the Australian government to end a nine-month industrial dispute with three key unions over pay and security. The strike action has cost the airline -A$68 million with the grounding of 108 airplanes.

(QAN) and the unions now have 21 days to negotiate a settlement before binding arbitration may be imposed, according to "Reuters."

The airline's action came as a result of an impasse with the Australian and International Pilots Assasociation (AIPA), the Transport Workers Union (TWU) and the Australian Licensed Aircraft Engineers Association (ALAEA). (QAN) has had more than >200 meetings with the three unions to try and hammer out a deal.

The grounding, which did not affect QantasLink (NJS) or Jetstar (IMU), affected 447 flights a day and disrupted travel for more than >60,000 passengers who were stranded across the world.

(QAN) had hoped the overwhelming vote of support of the company’s strategy at the airline’s annual general meeting (AGM) would send a clear signal to the unions, but instead it received further threats of increased industrial action.

(QAN)’s forward bookings have plunged as the (ALAEA) warned passengers not to book with the airline because the dispute would drag on for 12 months.

The Australian Prime Minister, Julia Gillard said she would not get involved, possibly because it would upset the unions, which are her power base. As a result, (QAN) held a special board meeting and decided to lock out the members of the three unions. However, it was decided to ground the airline owing to safety concerns.

The Qantas (QAN) Group's low-cost carrier (LCC) subsidiary, Jetstar Japan has named Miyuki Suzuki as CEO of the recently launched joint venture (JV) airline. Jetstar Japan is a partnership between the Qantas Group, Japan Airlines (JAL)/(JAS) and the Mitsubishi Corporation.

Suzuki, a Japanese national with 30 years of Information Technology (IT) and telecommunications experience across the Asia Pacific region, will start his job on December 1st.

Jetstar Japan, which hopes to begin operations by the end of 2012, will have a fleet of new Airbus A320s, configured for 180 passengers. The fleet will grow to 24 airplanes within the first few years. Initially, the (LCC) will fly domestically with short-haul international flights expected to start in 2013. It will announce domestic destinations by mid-2012, to possibly Sapporo, Fukuoka, and Okinawa.

Qantas (QAN) and Airbus (EDS) have finalised a contract for 110 A320 Family airplanes, to help with the airline’s fleet renewal and expansion plans in the coming years. The firm order for 78 A320neo and 32 A320s is the largest single order in Australian aviation history by airplane units and follows a commitment signed in August.

“The A320 will be the launch airplanes for (QAN)’s new, premium airline based in Asia and will support Jetstar (IMU)’s expansion plans – including the establishment of Jetstar Japan,” said Alan Joyce, (QAN) CEO. “The A320 Family’s outstanding operational efficiency and comfort, plus its environmental credentials, make it the right choice for the Qantas Group.”

737-838 (34186, VH-VZT), delivery.

November 2011: INCDT: A Qantas (QF) A380, en route from Singapore to London Friday, was diverted to Dubai after the flight crew (FC) was alerted to an engine oil problem in the No 4 engine, shutting it down.

The A380 was carrying 258 passengers and landed without incident at Dubai, which is a major A380 maintenance center. The incident happened just 90 minutes into the 14-hour flight and an emergency was not declared.

English actor and comic, Stephen Fry was a passenger on the airplane, who tweeted his disappointment at the diversion to his 3.3 million followers.

In this latest public relations (PR) setback, (QAN) was not sure if the problem was genuine or if it was with the warning system.

(QAN), which grounded its fleet October 29 over an escalating industrial dispute with unions, resumed flights after industrial arbitrator, Fair Work Australia ruled to terminate the industrial action. A few days later, (QAN) revealed an alleged sabotage of a 767 in Brisbane earlier that led to its decision to ground the fleet. The Australian Federal Police (AFP) is investigating the alleged sabotage.

Fair Work Australia (FWA) will resolve the long-running between Qantas (QAN) and three labor unions with binding arbitration, after negotiations broke down. (QAN) has been engaged in a bitter 10-month dispute with three unions (the Australian Licensed Aircraft Engineers Association (ALAEA), the Australian & International Pilots Association (AIPA) and the Transport Workers Union (TWU)) over new labor contracts, which culminated in (QAN) grounding its fleet October 30 and appealing to the industrial umpire for a lockout of union members. (FWA) responded by calling an end to the industrial impasse and giving the unions 21 days to negotiate a settlement.

The (AIPA) and (TWU) are challenging the (QAN) grounding and lockout. (ALAEA) Federal Secretary, Steve Purvinas said that while progress had been made, “four or five matters” remained outstanding. “We think at this stage, it’s probably best if we go to arbitration to sort them out,” Purvinas said. “We are quite happy for Fair Work Australia to decide in arbitration. A 21-day extension wasn’t going to help us and it’s just easier to sit down before a full bench and get them out of the way.” Purvinas said the (ALAEA) was hopeful for a resolution before Christmas.

(QAN) CEO, Alan Joyce said the move to arbitration will bring certainty to (QAN) and its customers but that the process could take a number of months. “During that period, there can be no industrial action by any of the unions,” he said, noting that a binding arbitration agreement would lead to an agreement that will be in place for four years. “This brings certainty to our customers, our employees and our shareholders,” he said.

Last November, a (QAN) A380 suffered an uncontained failure of the intermediate pressure turbine on a (Trent 900) engine just after takeoff from Singapore. In June, Rolls Royce (RRC) agreed to pay (QAN) A$95 million/$100 million in full settlement.

Qantas (QAN) said the extensive industrial action taken by its three labor unions has cost the airline A$194 million/$195 million. Combined with soaring fuel costs of $450 million, (QAN)’s first-half profit will be slashed by up to -66%.

(QAN) advised the Australian Stock Exchange that its underlying profit before tax for the six months to December 31 is expected to fall to between +A$140 million and +A$190 million, down from +A$417 million for the same period last year, as a result of the 10-month dispute.

(QAN) said the cost of all the stoppages up to the October 29 grounding was A$68 million; the grounding itself cost A$70 million, plus a A$27 million impact on forward bookings and A$29 million for initiatives to placate passengers.

(QAN) CEO, Alan Joyce said that if the industrial campaign had continued, “the impact on the business would have grown to -A$85 million a month.”

Separately, there is speculation in Australia that there may be a renewed takeover bid for (QAN) from a private equity group after it was revealed that former (QAN) CEO, Geoff Dixon had considered taking a stake. Dixon told "The Australian" that his consortium had decided "right now is not a good time," but he believed others might be looking at a move. "Despite all that has happened, I am pretty bullish on Qantas (QAN). It is a terrific airline. It has a terrific set of assets,” Dixon said.

Dixon was the architect of the failed A$11 billion Airline Partners Australia equity buyout of (QAN) in 2007.

Later, Qantas (QAN) and the Australian Licensed Aircraft Engineers Association (ALAEA) have reached an agreement, bringing to a close one of the most bitter disputes in Australian aviation history.

The deal, which has been submitted to Fair Work Australia, gives (QAN) the flexibility to have heavy maintenance work performed overseas for airplanes such as the A380.

Another key win for (QAN) is the adoption of new, updated maintenance regulations without restriction that have been introduced by Australia’s Civil Aviation Safety Authority, bringing the country into line with other nations.

Engineers (MT) will get a +3% pay increase, which is on par with other (QAN) staff. (ALAEA) Federal Secretary, Steve Purvinas said engineers (MT) had locked in job security despite missing out on A380 work. “The main issue all along for us was job security and what we wanted was an A380 hangar in this country. We’ve missed out on that,” said Purvinas. “But what we have done is we’ve secured all of our existing job functions in a job security clause, which is good news for our members.”

(QAN) said the agreement was a good deal. “It does not include any of the claims that would have restricted (QAN) in making the changes needed to compete in the global aviation industry.”

Australia’s Transport Minister, Anthony Albanese and Workplace Relations Minister, Bill Shorten said the truce was good news for the traveling public. “The government is hopeful that transport workers and pilots (FC) can now come to an agreement with (QAN),” the ministers said.

(QAN) has denied Australian media reports that (QAN)'s Asian strategy has been put on hold and confirmed that discussions were continuing with Malaysia Airlines (MAS) and Singaporean interests.

In August, the Qantas Group announced it was setting up a joint venture (JV) with Japan Airlines (JAL) and Mitsubishi to form Jetstar Japan, and it would also launch a premium branded airline in Asia to tap the rising middle class.

An airline spokesperson said “a cornerstone of (QAN)'s policy of revitalizing its international operations is tapping into the forecast growth in the intra-Asia travel sector — - not just at the low-cost end, but premium traffic.”

While discussions are continuing with Singaporean interests, the recent tie-up between (MAS) and AirAsia (ASW), which has a cooperation agreement with (QAN)’s low-cost carrier (LCC) Jetstar (IMU)/(JSA), has significant appeal.

"With the recent changes at Malaysia Airlines (MAS), combined with their joining of the Oneworld (ONW) alliance, as well as our long-standing relationship with Tony Fernandes [(CEO) of AirAsia (ASW)], this now presents a genuine option for the Qantas Group to tap into Asia. At this stage, nothing is ruled in or out and all options are under serious consideration,” the (QAN) spokesperson said.

INCDT REPORT: The Australian Transport Safety Bureau (ATBS), issued its final report, regarding an October 2008 incident involving a Qantas (QAN) A330 flying Flight 72 from Singapore to Perth, which injured 119 passengers and crew. Please read above in October 2008 to see the findings of the report.

1 A380 delivery this month.

January 2012: Qantas (QF) has confirmed that about 150 of its 2,000 pilots (FC) have taken unpaid leave after it reduced services to cut losses on unprofitable international operations. (QAN) has allowed pilots (FC) to take unpaid leave since the 2008 financial crisis so they can work for overseas airlines such as Emirates (EAD).

According to "Bloomberg," the VP of Australian & International Pilots Association, Richard Woodward believes the number on leave will reach 500 by 2015. “Our young guys are voting with their feet,” Woodward said. “Because of retrenchment and downsizing, they’re going directly to our competitors, which will exacerbate our problems.”

Fair Work Australia is arbitrating a new labor contract between (QAN) and its pilots (FC).

British Airways (BAB) and Qantas (QAN) have introduced changes to their joint flights between the UK and Australia. (QAN) will cancel its routes from Bangkok Suvarnabhumi and Hong Kong to London Heathrow from March 24, while (BAB) will cancel its Bangkok Suvarnabhumi - Sydney flights by March 3.

Airbus (EDS) engineers (MT) carrying out repairs on the Qantas (QF) A380 that suffered an uncontained engine explosion in late 2010 after take-off from Singapore have found a small number of 3 mm-long cracks in the airplane’s wing rib feet.

A (QAN) spokesman said that “minuscule cracking was found in the wing ribs of the (QAN) A380 being repaired in Singapore but investigations have found that the cracking is unrelated to the engine failure incident experienced by this airplane in November 2010 and is not unique to (QAN). It has now been repaired.”

An Airbus (EDS) spokesman said: “(EDS) confirms that minor cracks have been found on some non-critical wing rib-skin attachments on a limited number of A380s. We have traced the origin to a material-related manufacturing issue. (EDS) has developed an inspection and repair procedure which will be done during routine, scheduled four-year maintenance checks. All A380 operators have been informed. It’s very important to note this is not a safety issue, and that (EASA) is in agreement with our approach.”

It is understood that similar cracks have been found on one Singapore Airlines (SIA) A380, which was in for a "C" maintenance check.

Airbus (EDS) has also found the same issue on two test airplanes.

“No immediate action is required by A380 operators, because the cracking presents no risk whatsoever to flight safety,” a (QAN) spokesman said. “Formal guidance is being developed by (EDS) that is likely to require A380 operators to inspect wing ribs for this type of cracking every four years in line with scheduled maintenance checks. Qantas (QAN) will comply fully with this guidance when it is published.”

Sources say that the cracking appears related to production and not fatigue. (QAN) expects the A380 under repair (its first) to be returned to service in March.

737-838 (34188, VH-VZX), delivery.

February 2012: Qantas (QAN) will delay service entry of its 787-8 fleet as the airline moves to slash capital expenditure in the 2012 - 2013 period. (QAN) says the move, which it said has been enabled by "manufacturer delays", will contribute to cuts in capex from a projected A$2.5 billion/$2.68 billion to $2.3 billion for 2012 and from $2.8 billion to $2.3 billion in 2013 "with further cuts to be identified for that year", said (CEO), Alan Joyce.

Boeing (TBC) was due to deliver (QAN)'s first three of 15 787-8s in 2012, itself a delay from a handover initially projected for 2010. (QAN) did not specify when it would now receive its initial 787 Dreamliner.

Speaking as he announced the airline's half-year results, Joyce unveiled a raft of cost-saving measures, including route closures and a root-and-branch review of its Maintenance Repair & Overhaul (MRO) capability, which he said were necessary to "restore, retain and increase our efficiency and competitiveness."

Joyce said services will be withdrawn from the Singapore - Mumbai and Auckland - Los Angeles routes from May. From June, its Sydney - Bangkok service will be served using an A330 instead of a 747-400. Sydney - Auckland will also shift from an A330 to a 737-800. A330s will also replace 747-400s on "certain services" between Sydney and Perth, and A330s will now be utilized on the Melbourne - Perth route. 747 services to Japan will rise to seven per week, from six at present, said Joyce.

The network changes "and the critical mass of 12 A380s" in its fleet will enable (QAN) to retire two more 747s this year, in addition to the four of the type that will retire in April.

Its entire maintenance operation will be re-configured, said Joyce, as it looks to increase competitiveness in a division which is +30% more expensive than its competitors. Although promising no jobs would be shifted off-shore, some -500 positions will be made redundant by the changes, said Joyce. Heavy maintenance operations will be consolidated from its three sites at Melbourne, Brisbane and Avalon. No decision has been taken on the size of final maintenance footprint, but Joyce warned "doing nothing is not an option". The majority of other maintenance and supply chain operations will be moved to Sydney, he added.

Line maintenance will change to a "maintenance on demand" approach, so that "engineers (MT) will not be conducting airplane checks that are not required", said Joyce.

Rostering and planning activities will largely be consolidated to Sydney as well, he added. "We need to be ready to take tough decisions, and we must become more flexible and productive."

Qantas continues to evaluate the creation of a premium airline in Asia, but this will be a "capital-lite model", Joyce said.

The Qantas (QAN) Group’s new low-cost carrier (LCC) subsidiary Jetstar Japan has pushed up the launch of its domestic services to July 3, several months ahead of schedule. Jetstar Japan, which will be based at Tokyo Narita (NRT), is on track to be the first (LCC) to fly on domestic routes from Tokyo.

It will initially serve five major Japanese cities (NRT, Osaka, Sapporo, Fukuoka, and Okinawa) using three new Airbus A320s. Its fleet is expected to grow to 24 airplanes within the first few years. Short-haul international flights are expected to start in 2013.

Competitor AirAsia Japan, the joint venture between AirAsia (ASW) and All Nippon Airways (ANA), will launch in August from (NRT). International services are scheduled to launch October 1. From 2013, it plans to offer A330 services to Thailand, Indonesia, and Singapore.

Jetstar Japan is a partnership between the Qantas Group (QAN), Japan Airlines (JAL)/(JAS) and Mitsubishi Corporation. Last year, (QAN) finalized a contract for 110 A320 family airplanes for (QAN) subsidiary, the Jetstar Group in Australia and Singapore and Jetstar Japan.

Jetstar Group (CEO), Bruce Buchanan said past experience with Japan puts Jetstar (IMU) in a good position. “Serving the Japanese customer for the past five years with international services gives us a clear advantage in rolling out a domestic network,” Buchanan said.

Jetstar Japan (CEO), Miyuki Suzuki said Jetstar Japan was preparing for strong customer demand when fares to its first five destinations go on sale. “In a country that’s never had a true low fares domestic network, the ability to travel for an average of -50% less will open up new places and opportunities,” Suzuki said.

March 2012: Qantas (QAN) said it has begun to implement, and in some areas accelerate, its previously announced five-year plan to remain competitive during the “ongoing reshaping of global finances, the painful economic restructuring in Europe, the rebalancing of global economic weight to Asia, and a profound transition in the Australian economy.”

(CEO), Alan Joyce told investors and journalists (QAN) is facing these competitive realities and learning to adapt “if we are to prosper and enhance long-term shareholder value.” Joyce said (QAN) is facing a strong competitor capacity growth into Australia and a flat inbound market, as well as a softening of demand for travel out of the (UK) and Europe. As a result, (QAN) will terminate Singapore - Mumbai and Auckland (AKL) - Los Angeles service in May, as well as service between Bangkok (BKK)/Hong Kong and London in March. It will replace its 747 Sydney (SYD) - (BKK) services with A330s in June, and replace A330 airplanes on the (SYD) - (AKL) route with 737-800s. It will also add A330 airplanes to its Melbourne - Perth (PER) routes as well as on certain services between (SYD) and (PER), replacing 747s. It will retire two additional 747s this year, on top of the four scheduled to be retired this April.

(QAN) reported an underlying profit before tax of +$202 million for the six months ending December 31, down -51.6% from the prior year's profit before tax of +$417 million. During the period, it recorded a financial impact of $194 million due to industrial action, and a +$444 million increase in fuel costs. It has cash reserves of $3.3 billion, and said it is one of only two global airlines with an investment grade credit rating with both ratings agencies. It aims to reduce projected capital expenditure from $2.5 to $2.3 billion for full-year 2012, and from a projected $2.8 billion down to $2.3 billion for financial year 2013.

“With our dollar likely to stay at a sustained high value for the foreseeable future, Australia has become a very high-cost economy in which to do business,” Joyce said, adding that (QAN) will continue to invest in the renewal of its 737 fleet.

(QAN) plans to consolidate, not outsource, its maintenance operations.

In a speech on the airline’s half-year results, (QAN) (CEO), Alan Joyce told investors and journalists (QAN) will reduce its engineering and maintenance expenditures (which is nearly $1.4 billion a year, or at least +30% higher than its competitors) through a consultative review of its heavy maintenance procedures, a consolidation of maintenance tasks and more efficient performance of maintenance tasks.

“With airplane retirements, there is simply not enough heavy maintenance work to justify the three facilities in Melbourne, Brisbane and Avalon,” (QAN) (CEO), Alan Joyce said. It will consolidate its Airlines Aircraft Airworthiness Group in Sydney, Brisbane and Melbourne; maintenance operations centers in Melbourne and Sydney; and Commodities Management Group in Melbourne into its home base in Sydney.

Its engineering (MT) staff is now proceeding with what it calls “maintenance on demand,” for new-generation airplanes. Under the new process, engineers (MT) will not conduct airplane checks, which are not required. “This will bring our practice into line with both the manufacturers’ guidelines and Civil Aviation Safety Authority regulations,” Joyce said. “It will allow our engineers (MT) to be assigned to airplanes that require attention.”

Over the next two months, (QAN) will consult with unions including (AMWU), (AWU), and (ALAEA) on the adjustments. It anticipates that approximately 500 positions will be affected by the immediate changes — with no jobs going offshore.

“Overall our business is strong, we are exerting financial discipline, and we are well placed to handle this complex economic and competitive environment,” Joyce said. “But the highly competitive markets and tough global economy in which we operate mean that we must change.”

(QAN) launched in-flight connectivity trials on board six A380 airplanes flying to Los Angeles from Sydney and Melbourne. The OnAir connectivity service, using Inmarsat’s SwiftBroadband, will initially be available to customers in the first (F)- and business (C)-class cabins.

“The eight week trial will give customers the opportunity to access the Internet in exactly the same way as a terrestrial Wi-Fi hotspot in which customers can pay with their credit card and surf the Internet, including the use of email,” (QAN) Executive Manager Customer Experience, Alison Webster said. “(QAN) is the first airline in the world to trial this service on direct flights between Australia and the USA.”

The trial will allow passengers to access the Internet via Wi-Fi enabled laptops and personal electronic devices. (QAN) said it will next “assess opportunities for the long-term application of Internet capabilities across its A380 fleet,” following the eight-week period.

China Eastern Airlines (CEA) and the Qantas (QAN) Group are planning to launch a low-cost carrier (LCC) subsidiary, Jetstar Hong Kong. The Hong Kong-based joint venture (JV) is expected to launch in 2013.

The new (JV), subject to regulatory approval, will make (CEA) the first state-owned Chinese carrier with an (LCC). According to (CEA), the new (JV) will have a registered capital of $115 million; each airline will own a 50% share of the (LCC).

“The low-cost airline market in Hong Kong has a significant development potential and room for growth, which provides the company with opportunities for investing and developing the businesses in [a] low-cost airline,” (CEA) said.

(CEA) Chairman, Liu Shaoyong said, "Cooperation with the Qantas (QAN) Group is a key step in (CEA)'s international expansion strategy and an excellent opportunity for (CEA) to develop low-cost carrier (LCC) operations to complement its existing business model.”

“Establishing Jetstar Hong Kong in the heart of Asia and on the doorstep of mainland China is a historic opportunity to continue the successful expansion of the Jetstar brand in this region,” (QAN) (CEO), Alan Joyce said.

Jetstar Hong Kong is expected to operate three A320s, initially on intra-Asian routes starting from Hong Kong, and plans to expand its fleet to 18 A320s by 2015.

Jetstar (IMU) Group (CEO), Bruce Buchanan said the new airline will “trigger new travel demand” because it will offer fares at -50% less than full-service carriers.

An industry insider said that if Jetstar Hong Kong is successful, (CEA) will consider launching a new company called “Jetstar China to further explore the low-cost airline market in China.” China has only one (LCC), Spring Airlines (CQH).

In recent years, the number of (LCC)s in the Asia/Pacific region has been growing.

Peach Airlines (PCH), the (JV) established by (ANA) and Hong Kong First Eastern Financial Investment Group began operations in March. AirAsia Japan, a (JV) between All Nippon Airways (ANA) and AirAsia (ASW), will launch in August. Singapore Airlines (SIA) has launched its low-cost subsidiary, Scoot (SCT), this month.

(QAN)’s new (LCC) Jetstar Japan has pushed up the launch of its domestic services to July 3, several months ahead of schedule.

Qantas (QAN) and SkyNRG will operate Australia’s first commercial biofuel flight April 13 between Sydney and Adelaide. The flight, using an A330, will operate using a 50:50 blend of biofuel derived from used cooking oil and conventional jet fuel.

The fuel, supplied by SkyNRG, has been fully certified for use in commercial aviation. Its life cycle carbon footprint is around 60% smaller than that of conventional jet fuel.

“With high fuel costs and carbon pricing affecting airlines around the world, the Qantas Group is taking the lead in advocating the development of a sustainable aviation fuel industry in Australia.”

QF1121 will depart Sydney at 10:20 am on April 13, arriving in Adelaide at 12:05 pm. The return flight, QF1120, will depart Adelaide at 1:35 pm, arriving in Sydney at 4 pm.

(QAN) Head of Environment, John Valastro said the goal of the flights is to raise awareness about the potential for sustainable aviation fuel in Australia. “We know that sustainable aviation fuel can be used in commercial aviation just like conventional jet fuel,” he said, “but until it is produced at a commercial scale, at a competitive price, the industry will not be able to realize its true benefits. No single player can make this happen: it needs support from government, private sector investment, access to infrastructure and market demand.”

Valastro said that (QAN) has been in discussions with government and industry partners about “producing a clear blueprint for the establishment of an Australian sustainable aviation fuel industry. This needs to focus not on speculative technologies but on biofuels that are operationally feasible now, production of which could commence within the next few years—given the right conditions. We hope to accelerate the process in the coming weeks as we build towards this Australian-first flight,” Valastro said.

(QAN) said low-cost carrier (LCC) subsidiary, Jetstar (IMU) will use the same fuel mix when flying the Melbourne - Hobart route on April 19.

See video "QAN Pilots"

April 2012: Repairs have been completed on a Qantas Airways (QAN) A380 that experienced an uncontained engine failure over Singapore in November 2010. The A380 (VH-OQA) will be flown back to Australia from Singapore on 21 April.

This comes after 18 months of extensive repairs on the airplane, which suffered significant damage to its airframe. The incident occurred minutes after take off on flight QF32 from Singapore to Sydney on the morning of 4 November while the airplane was flying over the Indonesian island of Batam. The A380 rolled off the Airbus (EDS) assembly plant in September 2008 and entered into service that same month.

Australian investigators have finished collecting data for an investigation into the uncontained failure of the Rolls-Royce (RRC) (Trent 900) engine. The data is being analysed and a final investigation report is expected in the third quarter of 2012. So far, the investigations identified a defect in an oil feed tube as the cause behind an oil fire, which led to the engine failure. The defect caused a section of the oil tube to thin out and crack, leading to an internal engine oil fire that weakened the intermediate pressure turbine disc. This was then separated from the turbine shaft, puncturing the engine case and wing structure.

In January, the Australian Transport Safety Bureau (ATSB) said that both Rolls-Royce (RRC) and Airbus (EDS) had taken several measures to improve their processes. (RRC) conducted several "major internal investigations" looking into the manufacture of oil pipes with reduced wall thickness, the management of concessions of manufactured components, and the failure mode, effects and criticality analysis (FMECA) of previous component failures. In its (FMECA) procedures, Rolls-Royce (RRC) has revised it to include numerical justifications for any assumptions made. (RRC) also revised its procedures to include feature checks and risk assessment during the design and manufacture of new structures, and introduced a revised procedure to provide training to better manage the application of retrospective manufacturing concessions.

Airbus (EDS) is working with airports and firefighting agencies to develop an agreed safe method for these agencies to externally shut down the manufacturer's engines when the need arises. The agreed procedure will then be incorporated into (EDS)'s rescue and firefighting chart and distributed to those involved.

In its report, the (ATSB) said that together with the UK's Air Accidents Investigation Branch and (RRC), it is still looking into "the circumstances and missed opportunities with the potential to have detected the reduced wall thickness and offset counter bore of the oil feed pipe" before, during and after the manufacturing of the (IP) turbine module case.

The (ATSB) added that checks on the airframe and systems damage has been completed and did not reveal any significant or critical safety issues.

The Qantas Group has selected (CFM) International (LEAP-1A) engines for the 78 A320neo airplanes it has on order. (CFM) valued the deal at $2 billion including spare engines.

(QAN) and Airbus (EDS) last year finalized the single largest commercial airplane order in Australian history with a contract for 110 A320 family airplanes including the 78 re-engined units. Airlines can also choose (Pratt & Whitney) (PRW) (PW1100G) engines to power A320neos.

“The (LEAP) engine was chosen because of its performance, fuel efficiency and maintenance program," (QAN) (CEO), Alan Joyce said, adding that the first of the A320neos, to be delivered in 2016, are targeted for subsidiary Jetstar (IMU).

Qantas (QAN) is still eyeing Singapore as the base for its premium Asia carrier. (QAN) (CEO), Alan Joyce told "The Australian" newspaper that (QAN) remains keen to set up a premium carrier and is looking at a range of options.

“This will take a bit longer than we originally thought, but we’re still keen to set up a premium airline in Asia and we’re still looking at a range of options available to us — and Singapore is one of them,” Joyce told the paper.

After a prospective deal with Malaysia Airlines (MAS) collapsed last month, the onus has swung back to Singapore although this time the dialogue is with the government.

“We [are] work[ing] with them on a range of issues and one of them is keeping the door open to the possibility of a premium airline,” Joyce told "The Australian."

Joyce stressed (QAN) was not desperate to establish the new carrier, "but we do believe that for the long-term success of (QAN), it needs to participate in the premium end of the market," Joyce said.

May 2012: The Qantas Group (QAN) will increase capacity on (QAN), Jetstar (IMU) and QantasLink (NJS) domestic routes in 2012 - 2013 to strengthen its network in the business and leisure markets.

Changes include upgrading airplanes and adding more frequencies, including extra services during peak times on business routes between Sydney (SYD), Melbourne (MEL) and Brisbane (BNE). It will also reintroduce 747 services on the (SYD) - Perth (PER) route.

Adding more A330 services on the (MEL) - (PER) route will increase capacity in the east-west market, according to (QAN).

Jetstar (IMU) will increase capacity in key leisure markets and QantasLink (NJS) will increase capacity across Queensland with the introduction of Fokker F 100 services between (BNE) and Emerald, complementing Bombardier DHC-8-Q400 services and providing cascaded growth in key regional markets.

These measures will ensure that the Qantas Group maintains its profit-maximizing 65% market share, while retaining the flexibility to adjust planned capacity growth according to market conditions.

Qantas (QAN) is considering closing down its maintenance base at Melbourne Tullamarine International (MEL) airport with -400 jobs expected to be lost according to Australian trade unions. (QAN) denies reports that any decisions have already been made on its maintenance bases but has confirmed that it is currently reviewing options for its three maintenance bases at Melbourne Avalon (AVV), Brisbane International (BNE) and Melbourne's Tullamarine airport.

Later, however, (QAN) confirmed a second heavy maintenance base in Victoria will eventually close after it cut -500 engineering (MT) jobs and announced it was closing its base at Melbourne's Tullamarine Airport.

As angry unions railed at the cuts, (QAN) (CEO), Alan Joyce confirmed that the plan was to ultimately consolidate the airline's maintenance operations in one base in Brisbane. But he said there was no time frame for the closure of the Boeing 747 heavy maintenance facility at Avalon, near Geelong, because there was still maintenance to be done on jumbo jets, reconfiguration work and expected overflow 737 and 767 work.

Most of the immediate pain will be felt at Tullamarine, where -422 positions will be lost and unions were surprised that a further -113 positions will go at Avalon. The losses will be partially offset by the relocation of 737 heavy maintenance to Brisbane and availability of +30 new job opportunities in line maintenance in Melbourne and five in Sydney.

The net loss of -500 jobs, about -10% of (QAN)'s total maintenance workforce, will save the airline up to -$100 million annually and is expected to be complete by August. (QAN) said the restructure was necessary because there was not enough heavy maintenance work to keep three facilities operating. It is retiring older 737-400, 767 and 747 planes and more advanced, newer airplanes requiring less maintenance meant there would be more down time at the bases.

Mr Joyce revealed there was no heavy maintenance work scheduled at Tullamarine between August and January. He warned that the introduction of new airplane technology would see a -60% cut in heavy maintenance requirements in the next seven years. The high Australian dollar had also made (QAN) operations uncompetitive.

At Tullamarine, Antony Surace was bewildered when he found out he was among 422 (QAN) maintenance workers (MT) who have had their livelihood taken away. "I'm devastated," Mr Surace said. "I've been through this before with Ansett (ANS) and I came here for a bit of job security and it's just gone out the door."

Also left reeling by the job cuts, the Victorian government indicated it was having ongoing discussions with (QAN) about protecting Avalon's future with an industry assistance package. "We offered (QAN) a strong case to locate its heavy maintenance bases in Victoria," Premier, Ted Baillieu said.

But Mr Joyce said airplane maintenance differed from the car and steel industry. "The reality is that we just have empty lines with people that wouldn't be doing anything so it's very hard to get a government subsidy that actually makes it worthwhile to keep these facilities economic," he said.

Unions warned of further job losses. Australian Workers Union State Secretary, Cesar Melhem said this announcement was "the thin edge of (the) wedge as fleets start to be retired". Federal Workplace Relations Minister, Bill Shorten expressed concern about the impact the decision would have on the aviation industry's long-term capacity.

Qantas Group’s new low-cost carrier (LCC) subsidiary Jetstar Japan has taken delivery of its first A320, as the Japanese (LCC) prepares to launch domestic services July 3, several months ahead of schedule. “The first airplane will arrive by the end of this week and the next two in July,” an Airbus (EDS) official said.

The all-economy (Y) airplane can carry 180Y passengers.

Jetstar Japan, which will be based at Tokyo Narita (NRT), is on track to be the first (LCC) to fly on domestic routes from Tokyo. It plans to start commercial services in July operating from Narita to Kansai, Fukuoka, Sapporo and Okinawa with an initial fleet of three airplanes. “The carrier will start international services in 2013,” the (EDS) official said. Its fleet is expected to grow to 24 airplanes within three years.

“We aim to become the number one (LCC) in the Japanese market, and the A320 will help us achieve our goals,” Jetstar Japan President, Miyuki Suzuki said.

The Qantas Group (QAN) will defer deliveries of its A380s as it moves to further reduce capital expenditure in 2012 - 13. Capital expenditure in 2012 - 13 will now total $1.9 billion compared to $2.3 billion previously planned.

Headlining the reductions are changes to the Group’s fleet plan, which will see two A380 that had been scheduled for delivery in early 2013 moved to 2016 - 2017, (QAN) said, adding that the Group’s final six A380s will be delivered between 2018 to 2019.

Progress continues on the Group’s international transformation initiatives, with benefits of $280 - $365 million to be realized across financial years 2012 - 2014 from improving fleet economics, deepening alliances, withdrawing from loss-making routes and modernizing operational practices.

(QAN) (CEO), Alan Joyce put the changes in the context of an airline moving to fulfill strategic goals in an uncertain economy. “We have made substantial progress in our fleet renewal program — our average passenger airplane age is now 8.3 years, which is highly competitive with other major global carriers,” he said.

“As a result we are in a good position to reduce capital expenditure, targeting investment at business areas that deliver sustainable returns while maintaining flexibility in forward fleet commitments. With 12 A380s now in service and our 747 reconfiguration program well underway, we have made the financially prudent decision to reschedule a further two A380 deliveries — enabling significant capital expenditure savings,” he said.

The Qantas Group (QF) announced it will split (QAN)’s international and domestic operations into two distinct businesses as part of its five-year transformation plan launched in August 2011.

“Qantas International and Qantas Domestic (currently combined as ‘Qantas Airlines’) will be formally managed as two distinct businesses. Each will have its own (CEO) and its own operational and commercial functions with financial results to be reported separately.” The new structure will be effective July 1.

The restructure will strengthen the Qantas Group’s portfolio and help deliver its previously agreed strategic goals, (CEO), Alan Joyce said.

The Group also announced a number of executive management changes, including appointing former (QAN) Frequent Flyer (CEO), Simon Hickey to (CEO) (QAN) International; (QAN) Operations Group Executive, Lyell Strambi to (CEO) (QAN) Domestic; Group Executive, Strategy & Technology, Jayne Hrdlicka to (CEO) Jetstar (IMU) Group; Group Executive International Strategy, Lesley Grant to (CEO) (QAN) Frequent Flyer; and Gareth Evans to (CFO).

June 2012: Rating agency, Standard & Poor’s has placed the Qantas Group on a ratings watch, citing concerns about Qantas (QAN)’s international business.

(QAN) said earlier it expects to report a profit before tax of between +A$50 million and +A$100 million/+$49 million to +$98 million for the financial year ending June 30. For the same period the previous year, (QAN) posted a +A$552 million profit.

(QAN) also said its international business was expected to report full-year loss of more than >-A$450 million, more than doubling the loss of the previous year. “The forecast result reflects the recent deterioration in global aviation operating conditions driven by the European economic crisis, the Group’s highest ever jet fuel bill, and substantial capacity increases in the domestic market that have reduced yields,” the Group said.

Fuel costs across the group are expected to reach A$4.4 billion, an increase of around +A$700 million on the prior year.

(QAN) (CEO), Alan Joyce said the tough and worsening environment reinforced the importance of the (QAN) International five-year transformation plan announced in August 2011.

“We have taken decisive action to mitigate losses in (QAN) International by withdrawing from loss making routes, reducing capital investment, and transforming (QAN) Engineering. The introduction of a new Qantas Group structure with dedicated (CEO)s for Qantas International and Qantas Domestic will bring further rigor to our business,” he said.

In the domestic market, (QAN) said both (QAN) and Jetstar (IMU) will deliver improved results compared to the previous year and combining the two flying brands will deliver earnings before interest and tax of over >A$600 million.

Qantas Airways (QAN) has decided to pull its four representatives from the Air Pacific (APC) board of directors following arguments with the Fiji government run by the country's military. government had issued a decree on airline ownership in March that essentially was only issued to restrict (QAN) influence on board decisions at (APC). (QAN) currently owns a 46.3% stake in (APC).

Fair Work Australia (FWA) has upheld Qantas (QAN)'s position that pre-flight safety checks on A330 and 737-800 airplanes are no longer required on every flight.

The Australian Licensed Aircraft Engineers Association (ALAEA), which disagrees with the ruling, had told its members to continue to perform the maintenance tasks after the mandate took effect June 14. However, after (QAN) filed an application with (FWA) objecting to (ALAEA)’s action, the regulator upheld (QAN)’s position and issued a binding order to the union, requiring it to cease what it called unprotected industrial action.

(ALAEA) Federal Secretary, Steve Purvinas tsaid it would appeal the decision. However, he said, “Our members are complying with the Fair Work order; they could lose their houses if they don't.”

“From our point of view it is now business as usual and we can proceed with running our business in line with industry standards and new technology,” (QAN) Senior Advisor, Corporate Communications, Thomas Woodward said. (QAN) has approximately 5,000 engineers (MT) with 1,000 licensed engineers in line maintenance, Woodward said.

At the end of last year, (FWA) was asked to arbitrate a bitter 10-month dispute over maintenance between (QAN) and its three labor unions, including the (ALAEA), which resulted in the grounding of its fleet. The FWA ultimately ruled QF had the flexibility to have heavy maintenance work performed overseas for airplanes such as the A380.

June 2012: Qantas (QAN) said it will increase its 6X weekly 747-400ER frequencies to Dallas/Fort Worth International Airport (DFW) to daily on June 1. It will increase capacity on Perth (PER) - Melbourne (MEL) flights, in response to growing demand for premium travel to (PER) for both business and leisure passengers.

(QAN) outbound services from Australia operate directly from (SYD) to (DFW), while return services operate via Brisbane. (DFW) is home to (QAN)’s Oneworld (ONW) alliance partner, American Airlines (AAL).

(QAN) also announced it will increase A330 services on its (PER) - (MEL) route from October 15. A330 services will rise to 68 from 44, replacing flights operated by 767s, while services operated by internationally configured A330s will increase to 37 per week from 12.

(QAN) will also reintroduce 747 services on the (SYD) - (PER) route from July 9.

Jetstar Hong Kong, the joint venture (JV) low-cost carrier (LCC) being set up by China Eastern Airlines (CEA) and the Qantas Group subsidiary Jetstar (IMU), is on track to formally launch by the end of 2012 or early next year, according to (CEA) Chairman, Liu Shaoyong.

The (JV), which will have a registered capital of $115 million with each partner owning 50%, was announced in March. The company has applied for its air operator’s certificate (AOC) from the Hong Kong government.

(CEA) General Manager, Ma Xulun asserted that (LCC)s have great potential in the Chinese market. “(LCC)s account for more than a >25% share of the global air transport market and the figure is more than >33% in Southeast Asia, while comparably speaking, this figure is less than <5% in China,” Ma said.

Industry analysts pointed out that challenges remain for Chinese carriers developing (LCC) business models, including high import taxes for foreign-made airplanes and a shortage of pilots (FC) and airports. Liu conceded that “the operating environment for domestic carriers still needs to be improved,” but added he is confident Jetstar Hong Kong can make a profit by its third year of operation.

The only (LCC) in China is Shanghai-based Spring Airlines (CQH), which has been profit-making since its launch in 2004. It reported net income of +CNY500 million/+$79 million) in 2011. Spring (CQH) is preparing to launch an Initial Public Offering (IPO).

July 2012: Qantas (QAN) will increase Melbourne service to Hobart (2X-daily to 3), Launceston (17X-weekly to 28), and Devonport (2X-weekly DHC-8-Q300 service to DHC-8-Q400 service) and 32X-weekly, Adelaide - Canberra service to 37X-weekly on October 29.

(QAN) has denied rumors of a possible takeover bid after media reports that a group of wealthy individuals, including venture capitalist Mark Carnegie, was putting together a syndicate to make a bid for (QAN). A report in the "Australian Financial Review" said the group, which included former managers, “had been testing lenders on their limits to any debt financing,” according to (AAP).

“There’s no formal or informal offer or proposals,” (QAN) (CEO), Alan Joyce said in a report by (AAP) carried by a number of Australian media outlets. “I think what we read is just pure speculation.”

(QAN) is expected to announce losses, its first since privatization, and has seen a decline in its stock price to near-record lows. Last month, rating agency "Standard & Poor’s" placed the Qantas Group on a ratings watch, citing concerns about the airline’s international business.

Qantas (QAN) has announced Brett Johnson will retire as the Qantas Group's General Counsel. He will be replaced by Andrew Finch, effective November 1. Finch joins (Qan) from Allens where he has been a partner since 2002.

August 2012: Citing lower international growth requirements in an “uncertain global context,” Qantas (QAN) has canceled firm commitments for 35 787-9s and posted its first full-year loss since 1995.

(QAN) will retain 50 787-9 options and purchase rights, available for delivery from 2016. (QAN) said there were no changes to its order for 15 787-8s, the first of which is scheduled for delivery in the second half of 2013.

The 787-9 cancellations will reduce capital expenditure by -$8.5 billion.

(QAN) posted a net loss of -A$244 million/-$255 million for the financial year ended June 30, compared with a net profit of +A$249 million for the previous year. (QAN) International lost -A$450 million, while (QAN) Domestic and low-cost carrier (LCC) subsidiary Jetstar (IMU) Domestic delivered a combined profit of more than >+$600 million.

Joyce attributed the losses to a combination of a record fuel costs, up +$645 million (a +18% hike) to $4.3 billion; $194 million incurred because of a prolonged industrial dispute last year; and costs of $376 million associated with a transformation plan aimed at turning around the company’s international business.

But Joyce added that the company was on track to make its international business profitable by 2014, as envisioned in a five-year transformation plan that started in August 2011 and which aims to cut costs by -A$300 million a year.

“Our domestic position is pre-eminent and our domestic earnings outperformed the previous year. We have the two most profitable airlines in Australia,” Joyce said.

"We have 12 A380s in service across our long-haul network and the reconfiguration of nine 747s will be complete by late 2012,” (CEO) Alan Joyce said. “737-800s will continue to enter the Qantas (QAN) Domestic fleet as part of the Group’s existing fleet plan, while A330s will transfer from Jetstar (IMU) as 787s are delivered. And Jetstar (IMU)’s domestic and pan-Asian fleet requirements will be met over the long-term by our existing A320 order book and the arrival of 787-8s.”

Qantas (QAN) will commence 3X-daily, 737-800 services between the Gold Coast and Sydney from late October.

(QAN) will deploy Panasonic in-flight entertainment (IFE) systems onboard 16 767s, streaming content direct to iPads at every seat.

(QAN) will also refresh the airplane cabin interiors, adding leather seat covers in business class (c) and enhancing carpet, lighting, curtains and dividers. The first of the upgraded airplanes is scheduled to enter service in October.

September 2012: Australia’s Qantas (QAN) and Dubai-based, Emirates Airline (EAD) have entered into a 10-year global aviation partnership, enabling the two carriers to grow their international sides. This means (QAN) will end its Joint Services Agreement with British Airways (BAB), according to (QAN) (CEO), Alan Joyce.

While there will be no equity investment from either carrier, the deal includes integrated network collaboration with coordinated pricing, sales and scheduling as well as a benefit-sharing model.

Pending regulatory approval, from April 2013 the two carriers will fly 14 times a day from Australia to Dubai, and beyond to four continents. Dubai will become a one-stop hub, opening up Europe for (QAN) passengers, with access to 33 European destinations, including daily A380 flights to London Heathrow, Paris, Rome and other cities, according to the (EAD) website. “This is the most significant partnership the Qantas Group has ever formed with another airline, moving past the traditional alliance model to a new level. It will deliver benefits to all parts of the Group,” Joyce said.

A bonus for (QAN) especially will be its use of accessing Dubai's new A380-optimized airport with its A380s, which no other carriers other than Emirates (EAD) will be allowed to serve. (QAN) and (EAD) will share terminals in London, Melbourne, and Sydney.

“This is a more integrated partnership than most airline alliances and both (QAN) and (EAD) agreed that it should be a long-term commitment, rather than simply an open-ended code share,” a (QAN) official said.

While the two sides declined to discuss their benefit-sharing model, the (QAN) official said the partnership “substantially increases the size of the inbound markets we can draw from and means we can sell a far greater range of destinations out of Australia.” “There will also be associated benefits from restructuring our Asian network to focus on point-to-point travel, plus withdrawing from the unprofitable Frankfurt route,” the official added.


British Airways (BAB) and Qantas (QAN) will terminate their long-running revenue-sharing agreement on UK - Australia routes following (QAN)’s decision to embark on a new global partnership arrangement with Emirates Airline (EAD).

The existing (BAB) - (QAN) Joint Services Agreement (JSA) has enabled the two companies to share revenues and costs since 1995. (BAB)’s parent, the International Airlines Group (IAG), said the (JSA) will end March 31, 2013 (the day before the new (QAN - (EAD) agreement starts). “We’re ending the joint business on amicable terms and support (QAN)’s decision to work with (EAD),” (IAG) (CEO), Willie Walsh said. “The world has changed since 1995 when the joint business started. This is a small part of our overall network and this move fits in with changes in our global strategy.” (IAG) was already talking to several airlines about replacement arrangements, particularly for services into Asia, Walsh said.

Despite ending their agreement, (BAB) and (QAN) will continue to work together as part of the Oneworld (ONW) alliance and through bilateral code shares, he added. “The good relationship that we have with (QAN) (CEO), Alan Joyce and his team will continue through our joint membership of the Oneworld (ONW) Alliance.” “Over the past 17 years, the joint business with (BAB) has been central to the (QAN) network,” (QAN) (CEO), Alan Joyce said. “However, global operating conditions have changed and partnership with (EAD) is the right strategy for (QAN).”

OnAir has been granted authorization to provide its Internet OnAir in-flight Wi-Fi service within Australian airspace. This means that airlines (including Emirates (EAD), Qantas (QAN) and Singapore Airlines (SIA)) that provide OnAir Wi-Fi services on flights to Australia, can now offer the service throughout the flight, including in Australian airspace.

OnAir (CEO), Ian Dawkins said, “Our expertise in securing regulatory approvals means we have a network of more than >80 governmental authorities and over >350 roaming agreements with mobile operators.”

Qantas Airways (QAN) will be the launch customer for the Boeing (TBC) Onboard Performance Tool (OPT) for iPad. (QAN) will deploy the iPad-based Electronic Flight Bag (EFB) solution on 130 of its Boeing (TBC) airplanes in the fourth quarter. (QAN) will be the first airline to use Boeing’s (OPT) application on an iPad aboard commercial airplanes.

The (OPT) provides ideal speeds and engine settings along with the other standard applications provided by (EFB) solutions. Boeing (TBC) said (QAN) will use the (OPT) as a standalone (EFB) or as a backup to other Class 2 or 3 (EFB) applications.

"The mobile (OPT) is the latest of our industry-leading airplane applications, part of our Digital Airline solutions suite. It was developed to give our customers a marketplace advantage as they serve their customers and run the most efficient operations possible," said Per Noren, VP Information Services at Boeing (TBC). "Boeing has a unique portfolio of digital solutions and we're rapidly expanding it, making use of our existing and new, innovative technologies."

The (OPT) application is currently used by more than >120 customers, and Boeing (TBC) has received more interest recently for their new iPad-based version of the (OPT).

"The Boeing (TBC) mobile (OPT) is very well aligned with our flight deck mobile strategy. We especially appreciate the (OPT)'s remarkable flexibility, which allows us to define unique policies and configurations to suit our needs,” said Captain David Oliver, Head of Flight Technical for Qantas (QAN).

(QAN) receives its 60th 737-838; its 115th new airplane since 2008.

October 2012: Qantas (QAN) expanded its domestic network on 28 October when the Australian flag carrier resumed services to Gold Coast (OOL) from its Sydney (SYD) hub. The airline now operates the route three times a day using 737-800s. The last time Qantas (QAN) operated the route was in 2009. The route is highly competitive and Qantas (QAN) now faces three other airlines, including its low-cost carrier (LCC) subsidiary, Jetstar (IMU). Virgin Australia (VOZ) operates 77 weekly flights, Jetstar (IMU) 72 and Tiger Airways Australia (TAU) 19. - - (SEE THIS MONTH'S (VOZ) FOR DETAILS OF (VOZ)'S 60% TAKEOVER OF TIGER AUSTRALIA (TAU)).

November 2012: Qantas (QAN) said it would accelerate Aus$650 million/US$675 million in debt repayments and buy back shares worth Aus$100 million in a bid to shore up its ailing stock and boost confidence.

(QAN)’s Chairman, Leigh Clifford said the on-market buyback, which represents about 4% of total (QAN) stock, and early debt repayment reflected the board’s confidence in (QAN)’s improving fortunes. “Our continued progress towards the turnaround strategy for (QAN), plus cash inflows from recent transactions, gives the board confidence to approve these capital management measures,” Clifford said. “The share buy-back and accelerated debt reduction reflect the board’s goal of returning value to shareholders and maintaining a strong balance sheet, as well as retaining the flexibility to pursue current growth initiatives.”

The Aus$650 million debt repayment five months ahead of schedule was part of a Aus$1 billion debt reduction drive for the 2012 - 2013 financial year, (QAN) told the Australian stock exchange. Both it and the share buyback would be funded by the recent sale of (QAN)’s stake in freight company StarTrack and settlement from Boeing (TBC) on its 787 order, which had brought $750 million into (QAN)’s coffers, it said.

(QAN) stock jumped +6.5% on the announcement to Aus$1.31 in early trade.

Clifford said the board believed the current share price “does not reflect fair value” given the recent sealing of a mammoth partnership with Emirates (EAD) on its international routes and strength of its domestic business. The “Flying Kangaroo” hopes the 10-year tie-up with (EAD), unveiled in September, will boost its push into Asia and help stem losses at (QAN) — spun off earlier this year as a separate business.

Intense competition in the region, rocketing fuel costs and the strong Australian dollar saw (QAN) post its first loss since privatization in 1995 back in August, plunging -Aus$244 million into the red. It was a significant reverse from a net profit of +Aus$250 million a year earlier, and prompted ratings agency, Standard & Poor’s to downgrade (QAN) from "BBB" to "BBB-" due to what it described as “structural issues”.

(QAN) said it would also slash capital expenditure by -Aus$100 million to Aus$1.8 billion, forecasting underlying profit before tax of +Aus$180 - 230 million for the six months to December, comparable to +Aus$202 million in the same period last year. It added that the “outlook for the second half of Fiscal Year (FY) 2013 remains volatile and, given the uncertainty in global economic conditions, fuel prices and foreign exchange rates, it is not possible to provide further guidance at this time.

Qantas (QAN) has become a launch customer for the ‘FlySmart with Airbus (EDS)’ cockpit applications on iPad. These ‘Electronic Flight Bag’ (EFB) applications will be used by all pilots (FC) in (QAN) who fly (EDS) airplanes.

The (EDS) (EFB) solution for iPad was announced at the Farnborough Air Show earlier this year and (QAN) has been working closely with (EDS) since the launch of the project. (QAN) pilots (FC) took part in testing the (EDS) applications and worked with (EDS) Engineers (MT) to help define the best iPad (EFB) applications for the pilot (FC) community.

The (EDS) iPad (EFB) applications will soon be delivered to (QAN) as well as to a growing number of launch customers worldwide who have chosen the system. Pilots (FC) around the world will soon be able to consult all their (EDS) Operational Manuals on iPad. They will also be able to compute their airplane performance calculations which will provide them with optimised and accurate results on any runway of their operational route network.

(QAN)’s Head of Flight Technical, Captain David Oliver, said: “We’re pleased to be working with Airbus (EDS) on this innovative new (EFB) application, which will form part of the broader roll-out of iPads to all (QAN) pilots (FC) over the coming months. (QAN) is committed to new technology that reduces paperwork in the cockpit and improves access to information for our pilots (FC), and this app very much meets that requirement.”

Didier Lux, Executive VP of (EDS)’ Customer Services commented: “We are delighted that (QAN) has become a launch customer for the iPad FlySmart with Airbus (EDS) (EFB) apps following our close collaboration during the development phase of the project.” He added: “We have listened to our customers’ requirements for a lightweight alternative to (PC) operating system (EFB) devices.”

A pioneer in providing (EFB) applications to the industry with the goal of creating the ‘paperless’ cockpit 15 years ago, Airbus (EDS) is again leading the way in achieving this important leap in technology by combining its (EFB) content with the iPad.

December 2012: The Australian Competition & Consumer Commission (ACCC) has given its conditional approval of the proposed Qantas Airways (QAN) and Emirates (EAD) alliance.

The antitrust regulator said that the two airlines will be allowed to “cooperate on passenger and freight operations across their networks.” However, it wants to restrict cooperation between the airlines on flights between Australia and New Zealand to ensure that an acceptable level of service is maintained.

(QAN) said it expects final approval of the partnership by March 2013. (QAN) (CEO), Alan Joyce said “Our customer research has shown very strong support for the (QAN) and (EAD) partnership, particularly in terms of increasing one-stop access to Europe, cutting travel time and offering frequent flyer benefits.”

(EAD) President, Tim Clark added, “The partnership with (QAN) means we can add regional destinations like the Gold Coast and Hobart to the growing list of places we offer (EAD) customers worldwide.” The two airlines said they have already “started initial preparations that do not require regulatory approval, including connecting Information Technology (IT) systems, designing frequent flyer benefits and establishing an operational base for (QAN) in Dubai.”

(ACCC) Chairman, Rod Sims said, “The (ACCC) is of the view that the main benefit arising from the alliance is an improved product and service offering by the two airlines to their customers.” He added, “The alliance is likely to result in some public detriments through its effect on competition where (QAN) and (EAD) currently offer overlapping services. In most of these regions, there are factors which are likely to mitigate the public detriment, including continuing competition from a number of established airlines.” The exception, he said, is on Australia - New Zealand routes, where conditions will be put on the alliance.

The (ACCC) said it will require the alliance to be reviewed for approval again in five years. The airlines had requested to gain immunity for 10 years without a review. (QAN) is a member of the Oneworld (ONW) Alliance, while Emirates (EAD) has remained independent of the three global airline alliances.

January 2013: A major overhaul of Qantas (QAN)'s international operations is going to have serious ramifications for the other big players in Australia's long-haul markets next year. The most significant change will see (QAN) partnering with Emirates (EAD), giving the pair a more dominant position in the highly contested Australia – Europe market. The link-up will enhance (QAN)'s network into Europe but will make life more difficult for carriers, such as Singapore Airlines (SIA), that draw a lot of revenue from the so-called "Kangaroo" routes. 2013 will also be important for (QAN) low-cost carrier (LCC) subsidiary, Jetstar, which is due to take delivery of the first of its 15 787-8s.

A bitter two-year dispute between Qantas (QAN), and three of its worker unions has drawn to a close, for the time being at least, with Australia’s Fair Work Commission (FWC) handing down the last of three arbitration decisions on an employment contract for international long haul pilots (FC). (QAN) and the Australian & International Pilots Association (AIPA) have until 12th February 2013 to provide the (FWC) with a draft agreement giving effect to its decision and raising any areas of disagreement in doing so.

In the decision issued on 17 January 2013, the (FWC), (formerly Fair Work Australia) found largely in favor of (QAN), rejecting key job security claims by the (AIPA) representing 1,600 long-haul pilots (FC).

The pilots (FC) had sought to impose the terms and conditions of their employment contract on pilots (FC) beyond the (QAN) mainline brand including low cost carrier (LCC) subsidiary, Jetstar (IMU).

Two earlier decisions involving negotiations with the Australian Licenced Aircraft Engineers Association (ALAEA) and the Transport Workers Union (TWU) were issued on 23 January 2012 and 08 August 2012, respectively.

The long running dispute came to a head with the unprecedented decision by (QAN) (CEO), Alan Joyce to ground the entire (QAN) fleet on 29 October 2011, forcing the (FWA) to intervene on the basis that the dispute could damage the national economy.

(QAN) appears to have achieved a favorable outcome in each of the decisions, which effectively confirm its right to manage the business. Importantly, the decision also provides (QAN) with relief from industrial action from the three powerful unions until the end of 2014.

Qantas (QAN) has ordered three new Bombardier (BMB) DHC-8-Q400s and plans to lease five more Boeing 717s, but it has canceled one Boeing 787 in a move unrelated to the 787's recent grounding.

The Bombardier (BMB) order is valued at $98 million at list prices. The 717s are scheduled for delivery from this year’s second half.

(QAN) had 15 787s on order. However, at the end of 2012, (QAN) reduced the order to 14 787s. This change has now been finalized. (QAN) already canceled a firm order for 35 787-9s last year after posting its first full-year loss since 1995.

(CEO), Alan Joyce stressed that the Qantas Group “remains firmly committed” to the 787. “(QAN) is confident current technical issues will be resolved by Boeing (TBC),” he added.

“While the plan is for Jetstar (IMU)’s long-haul network to keep expanding, we are using the flexibility in our agreement with (TBC) to cancel a firm order knowing that we can replace it with one of our 50 options for this airplane down the track, and with a full view of what market conditions are like at the time,” Joyce said.

The 787s are slated for delivery to its Jetstar (IMU)subsidiary from mid-2013. They are being brought in to replace retiring 767s and A330s, which will be transferred to (QAN) Domestic.

The Bombardier (BMB) order will take (QAN) to 31 DHC-8-Q400s and DHC-8-Q400 NextGens, plus two DHC-8-200s, three DHC-8-Q200s and 16 DHC-8-Q300s.

“This expansion to our fleet of 125-seat 717s and 74-seat, DHC-8-Q400s gives us flexibility to pursue growth opportunities in a range of short-haul markets. It is a sensible investment in a part of the Qantas Group that is delivering strong returns,” Joyce said.

February 2013: The Qantas (QAN) Group posted a first-half net profit of +A$111 million/+$114.6 million, more than double the +A$42 million in the year-ago period. The Group’s first half ended December 31, 2012.

The results included an A$125 million payment from Boeing (TBC) as part of changes to (QAN)'s 787 orders announced in August 2012. (QAN)
(CEO), Alan Joyce said the Group was delivering against all its strategic goals. “During the 2013 first-half, we increased underlying profit by +10%, announced a global aviation partnership with Emirates (EAD), launched Jetstar Japan (JJP), reinforced our position in the Australian domestic market, reduced comparable unit costs by -3%, announced the early repayment of $650 million in debt, commenced a share buy-back and sold non-core assets,” Joyce said. “In total, the Group achieved A$172 million in transformation benefits in 1H13. The operating environment remains complex and volatile, but we are now beginning to realize the benefits of the tough decisions that we have made over the past 18 months.”

First-half revenue was A$8.2 billion, up +2.4% compared to the year-ago period. All operating segments were profitable except Qantas International (QAN), which reported an underlying (EBIT) loss of -$91 million in the first half, a +65% improvement of a -A$171 million loss year-over-year.

Jetstar (IMU) reported underlying (EBIT) of A$128 million, down from $147 million year-over-year, reflecting domestic market conditions and start-up investments in Jetstar Japan (JJP) and Jetstar Hong Kong (JHK). “Jetstar (IMU)’s revenues increased by +12%, as it positioned itself for a new phase of growth,” Joyce said.

“Jetstar Japan (JJP) commenced domestic operations in July and has made a strong start — with over >600,000 passengers carried in its first six months. Singapore-based, Jetstar Asia (JSA) continued to grow, with an improvement in profitability, while the performance of Vietnam-based Jetstar Pacific (PAH) is also improving after an ownership restructure and fleet renewal program,” said Joyce.

He added, “Jetstar Hong Kong (JHK)’s application for regulatory approval is well underway, and though we do not take the outcome for granted, we believe there is a compelling case for a new low-cost carrier (LCC) in this market.”

The Qantas (QAN) Group announced plans to order five additional 737-800s and upgrade its A330 fleet. Qantas (QAN) said the 737-800s, scheduled for delivery in 2014, would be used for Qantas Domestic. It will also extend the leases on two existing 737-800s this year. (QAN) will phase out its older narrow body 737-400s by the end of this year and will retire its 767s by mid-2015.

“Beginning in late 2014, the Group will reconfigure the interior of 10 A330-300s and 20 A330-200s with a new flat seat in business (C) class, refreshed economy (Y) cabin and a new in-flight entertainment offering,” (QAN) said.

The A330-300s will be operated by Qantas International (QAN) on its network between Australia and Asia, while the A330-200s will be operated by Qantas Domestic on routes between the east coast and Perth — enabling the final retirement of the (QAN) Group’s 767s.

(CEO), Alan Joyce said, “Together with our recent announcement of orders for five additional 717 airplanes and three additional Bombardier DHC-8-Q400s for regional operations, the changes we’ve now outlined will ensure that we have the right fleet in every part of the international and domestic market.”

March 2013: Qantas (QAN) commenced flights on the 1,100 km route from Sydney (SYD) to Gladstone (GLT) in the Australian state of Queensland. Eight weekly services are offered by (QAN) using DHC-8s. (QAN), Australia’s largest domestic carrier, operates to a total of 23 destinations across the country from Sydney.

Emirates SkyCargo (EMC) and Qantas (QAN) Freight (ACS) have inked a partnership to cooperate on cargo capacity on each other’s passenger services. Beginning March 31, the two companies will offer customers access to each of the two networks, marketing their cargo capacity to a total 233 ports across six continents. “This partnership will offer customers a range of benefits including increased frequencies, more options and flexibility, and ultimately improvements through the creation of seamless connections to more destinations,” Emirates Divisional Senior VP Cargo, Ram Menen said. “SkyCargo (EMC) customers from around the world will initially have access to 28 destinations on Qantas (QAN) Freight (ACS)’s network including 10 ports in Australia and eight destinations in Asia.”

Qantas (QAN) will also expand its network to include 65 Emirates (EAD) destinations in Europe, the Middle East, North Africa, and Asia connecting with its own existing network of 80 destinations in Australia through interline arrangements.

Emirates (EAD) and Qantas (QAN) will offer more than >90X-weekly Australia - Dubai services beginning March 31, subject to regulatory approvals.

Australia’s competition watchdog approved the Qantas (QAN) - Emirates (EAD) alliance, to the surprise of nobody. The (ACCC) had already flagged that approval was likely in a draft decision. However, there were some interesting nuggets buried in the 160-page final decision.

One such nugget was the discussion over capacity requirements that the (ACCC) is imposing on Australia - New Zealand routes, where both (QAN) and (EAD) are major players. These routes were the major concern of the (ACCC), because the two airlines have overlapping service, and they could potentially reduce capacity in the market.

The (ACCC) had already proposed a condition that (EAD) and (QAN) cannot reduce overall capacity across the four Australia - New Zealand routes where they overlap. While the regulator has not required capacity growth, it will review the routes in 2015 to see if growth requirements should be imposed.

The airlines had argued that the capacity commitments should apply to all of their flights in this market, so they could reallocate some capacity to new routes between the two countries. Some airports had also expressed concern that the condition might limit new route development.

In its final decision, the (ACCC) has stuck with the capacity condition for the four overlap routes. However, it has also given a pretty broad hint that it will grant relief from the capacity rules under certain conditions – which could include the launch of new routes.

Here’s what the (ACCC) says in paragraph 655 of its ruling:

The (ACCC) considers that the proposed conditions contain sufficient opportunity for appropriate variations to be made where new trans-Tasman services are contemplated by the applicants. The (ACCC) has not designed the conditions to restrict efficient entry or expansion on trans-Tasman routes by the applicants (or any other carrier). Take, for example, circumstances where the applicants are considering introducing new trans-Tasman services that require the diversion of capacity currently operating on one or more of the four overlap routes. Such an example may constitute a ‘material change in market conditions,’ meaning that the applicants can apply to reduce their capacity on the overlap routes to facilitate the introduction of the new service.

April 2013: Two A380 double decker jets have taken part in a special flypast over Sydney, to mark a new alliance between Qantas Airways (QAN) and Emirates (EAD). Struggling (QAN) has severed a partnership with British Airways (BAB) and switched its hub to Dubai for European flights. “This is one of the most important days in (QAN)’s 92 years history. Our partnership with Emirates (EAD) is probably the biggest partnership deal that (QAN) will ever do,” said Alan Joyce, (QAN) (CEO). Commenting on the special flypast, Tim Clark, (EAD) (CEO) said: “For somebody as old as me, who’s been in this business for as long as I have, I still got goose pimples watching those two magnificent airplanes flying so low and flying so well.” (QAN) announced the (EAD) deal in September, ending its 17-year alliance with (BAB). It will enable the carrier to cut loss-making international routes and focus on domestic and budget operations. (QAN) has been hit with a record fuel bill, rising competition and a labor union opposed to its spending cuts. The first flight to transit through Dubai was expected to leave Sydney bound for London.

Qantas (QAN) and Emirates (EAD) launched their new partnership April 1st with a flight from Sydney Airport. The flight featured a pair of Airbus A380s, the first time two commercial A380s have flown in formation. The partnership was given final regulatory approval by the Australian Competition and Consumer Commission (ACCC) last month. (QAN)’s international network should benefit from the partnership following a struggling economic period.

The (ACCC) granted interim approval of the alliance in January, allowing the two carriers to begin selling tickets, and (QAN) said it has seen a “sixfold increase in bookings to Europe” on the new joint network compared to the same period last year.

The two carriers will offer a combined 98 flights per week between Australia and Dubai, featuring the largest joint fleet of A380s worldwide. “Before today, the (QAN) network offered five one-stop code share destinations into Europe and the UK with our partners. From today, we offer access to 32 destinations in Europe on the combined (QAN) and (EAD) network,” said Alan Joyce, (CEO) of Qantas. “The new network will cut average journey times by more than >2 hours from Melbourne and Sydney to the top 10 destinations in Europe.”

Over 210,000 sectors have been booked thus far on the joint network, (QAN) said.


May 2013: Qantas (QAN) is upgrading its meals on transcon routes to Perth; its latest ploy to compete with the recent creation of "Virgin Australia Regional" from Virgin Australia (VOZ)'s acquisition of Perth based Skywest.

Qantas (QAN) will, by the end of the year, lease a 747-400ERF to replace an older 747-400F freighter currently being operated for it by Atlas Air (TLS). While still subject to regulatory approval, the airplane will be rebranded into the Australian carrier's distinctive "Qantas Freight" (ACS) livery, though flights will be operated by Express Freighters Australia ((ICAO) Code: EFA, based at Sydney Kingsford Smith (SYD)), a wholly-owned subsidiary of Qantas (QAN). The switch in equipment comes as (QAN) believes the 747-400ERF series will offer "greater capacity and range" compared to the older 747-400 series and will "deliver increased efficiency" in the long run.

There are 103 A380s in service as of early May 2013. Emirates (EAD) has 33 and Singapore Airlines (SIA) has 19, so when assessing network scheduling, these two and their hubs predominate: of the 1,048 weekly A380 flights, 402 are from (EAD) alone. Dubai and Singapore airport see the most A380 flights.

But there are some less predictable statistics. The airport to see the most A380 operators is Hong Kong, followed by Paris and Los Angeles. The largest A380 destination that is not (yet) an A380-hub is London Heathrow. The UK and USA are the most common A380 destinations after Australia, Singapore and the (UAE). Asia, not the Middle East, sees the most A380 flights; South America sees none. Guangzhou - Shanghai Pudong is the shortest A380 route at 1,202 km, while Los Angeles - Melbourne is the longest at 12,751 km. Qantas (QAN) and Lufthansa (DLH) have the highest average sector length, while Thai Airways (TII) is placing the most number of cycles (about two) on its airplanes per day. (QAN) and AirFrance (AFA) are placing the least (just over one).

June 2013: Sydney Airport’s redevelopment plans remain largely unchanged in its revised draft master plan issued in August 2012 looking out to 2033. By then, total passenger numbers are forecast to have doubled to more than >74 million per year. The airport has also retained plans to establish two separate international and domestic terminal precincts located on opposite sides of the main runway by 2019.

The existing T2 and T3 domestic terminals on the eastern side of the airport will be redeveloped and expanded to also cater for international services including the addition of more A380-capable gates. The T1 international terminal on the western side of the main runway will also be extended to create about four more gates. Both precincts will be equipped with swing gates able to serve domestic and international traffic from the same gate at different times.

July 2013: It is well-documented that the Qantas group of airlines (including its mainline operation, QantasLink (NJS) and Jetstar Airways (IMU)) has stated it will defend at all costs a 65% share of the Australian domestic market. Indeed, three Qantas (QAN) bosses (Geoff Dixon – former (CEO); Alan Joyce – current (CEO); and Lyell Strambi, current (CEO) Qantas Domestic) have stressed the importance of this self-imposed ‘Service Level Agreement (SLA)’ it has virtually signed with the Australian domestic passenger. In fact, in 2004, the then (CEO), Geoff Dixon, said: “This is our line in the sand and we will provide the capacity and infrastructure to defend it.” Bold words, but are they achieving this (SLA) contract with the Australian flying public?

On a macro-scale, looking at total weekly domestic market capacity for August 10 - 16, (QAN) is failing to deliver its promise against the competition, serving up just over 60% of seats. Half its size is the (self-described) ‘New World Carrier’ Virgin Australia (VOZ), with 30% of the market, the recently rebranded Tigerair (TGR) has close to 5%, while the #4 spot is held by (REX) – Regional Express with 3%. Five other smaller regional airlines share the residual 2% of the domestic market.

Drilling down further into the data and looking at specific markets, first of all looking at (QAN)’s share of the domestic market between Australia’s five largest cities: — Sydney, Melbourne, Brisbane, Perth and Adelaide. Unsurprisingly, services between these 10 city pairs represent a significant proportion of Australian domestic capacity – just over >20%. In fact, routes between these cities make-up seven of the top 10 domestic routes in terms of weekly seats.

Unfortunately for the Oneworld (ONW) Alliance airline (for how much longer), Qantas (QAN) performs best on the Adelaide to Perth route, with nearly 80% share, however, the route is only the 27th largest in terms of domestic weekly seats. Naturally, big routes attract more competition, therefore it is perhaps no surprise that the delivery of the (SLA) is put under the most pressure on the top three domestic routes, but resulting in (QAN) being on average -9% below its capacity promise across these three city pairs.

The problem gets worse for (QAN) when considering the 10 next largest routes in Australia – those which involve still involve one of the big five cities at one end of the route, but also include leisure destinations like Gold Coast. Of these routes, which represent around 11% of the total domestic market, (QAN)’s average gap from the 65% target has increased to nearly 9.5%, from just over 7% achieved from analyzing capacity from the big five cities.

Clearly there is some work for the airline to do in order for it to achieve its own domestic capacity benchmark. Looking at order backlogs as a potential solution, (QAN) does have nine 737-800s outstanding (as well as eight A380s – but these are not used on domestic flights), its regional subsidiary, QantasLink (NJS) has three DHC-8-Q400s on order, while its Low Cost Carrier (LCC) subsidiary, Jetstar (IMU) has 14 787s on order (the first will be delivered in September), however these will replace (QAN)’s A330s, which are used on its long-haul operations.

August 2013: Two years into a five year transformation program, Qantas (QAN) sees the light at the end of the tunnel, reporting an underlying profit before tax of +AUD 192 million/+$172 million for the financial year to Jun 30th, 2013 against a backdrop of high fuel costs, excess domestic capacity and intense competition in its international markets.

The result, however, benefits from an AUD 134 million/$120 million accounting estimate change relating to bringing forward accounting of passenger revenue. Without this adjustment, the underlying result would have been +AUD 58 million/+$52 million.

But Qantas’ (QAN)'s previously troubled international business is on the mend as the first benefits from the cornerstone alliance with Emirates (EAD) begin to flow, costs are removed, and loss making routes exited as well as airplanes reconfigured and alliances expanded, particularly in Asia.

Qantas Airways (QAN) will launch a seasonal, Perth - Auckland service, upgauge capacity on its Sydney - Hong Kong route, and increase the Brisbane - Los Angeles frequency. The twice-weekly, Perth - Auckland service will start on December 6 and run until the end of January 2014, using A330 airplanes.

From November 4, (QAN) will also raise the number of A380 services on the Sydney - Hong Kong route from four to five times weekly. The remaining two weekly frequencies on the route will continue to be operated by 747-400s. "The Qantas Group is serious about Asia and we've already increased capacity to Hong Kong by +10% this year," said (CEO), Alan Joyce. "As well as adding almost +5% more seats per week on this route, the airplane swap will increase the amount of flying done by our flagship A380 fleet into Asia."

Qantas (QAN) will increase its Brisbane - Los Angeles frequency from six to seven times weekly on December 2. (QAN) will use a 747-400 on the additional weekly service.

(QAN) will also retime one of its Sydney - Christchurch services to an evening Sydney departure to allow for improved onward connections, on October 27. This complements the existing service operated by Emirates (EAD) by providing a double daily frequency.

Qantas (QAN) and Emirates (EAD) commenced their partnership on the trans-Tasman route on August 14, with both carriers aligning their fares and code sharing on flights between Australia and New Zealand.
Joyce adds that the new services are part of (QAN)'s turnaround plans for its loss-making international operations. "These network changes are brought about through smarter use of our assets and our partners to deliver a truly premium experience service for our customers," he said.

After the temporary grounding of Tiger Airways Australia (TAU) (recently re-branded as "tigerair Australia") back in July 2011, and its slow re-building, the Australian domestic market showed robust growth in 2012 of +4.2%, but in the first five months of 2013 this has fallen to just +2.2%. For the year ending May 2013, the country’s busiest domestic route (between Melbourne and Sydney) grew by +6.5% to almost 8.2 million. Three of the country’s top 10 domestic routes have reported double-digit growth over the last 12 months; Sydney – Gold Coast (up +12.8% to 2.53 million), Melbourne – Perth (up +16.8% to 2.22 million), and Melbourne – Hobart (up +17.9% to 1.33 million).

A number of new domestic routes were launched in the first half of 2013 including (TAU)'s new Sydney services to Alice Springs, Cairns, and Coffs Harbour, plus Brindabella Airlines Sydney to Moree and Orange.

Since March 2009, international traffic has grown year-on-year every month with the exception of March 2011. In the first five months of 2013, international traffic has grown at Australian airports by +5.2%. New international services launched in the first half of 2013 include:

* Garuda Indonesia (GIA): Denpasar (DPS) to Brisbane (BNE) on August 1, with daily 737-800 flights.

* Philippine Airlines (PAL): Manila (MNL) to Brisbane (BNE) via Darwin (DRW) on June 1, with three-weekly A320 flights, plus Manila (MNL) to Perth (PER) via Darwin (DRW) on June 2, with four-weekly A320 flights.

* Qantas (QAN): Sydney (SYD) and Melbourne (MEL) to Dubai (DXB) on March 31, with daily A380 flights.

* Sichuan Airlines (SIC): Chengdu (CTU) to Melbourne (MEL) on February 28, with three weekly flights on A330-200s.

From May 2013, Qantas (QAN) has 17.2% of the international market followed by Emirates (EAD) (9.7%) and Singapore Airlines (SIA) (8.8%). (QAN)'s low-cost carrier (LCC) subsidiary, Jetstar (IMU), has an additional +7.4%, giving the Qantas (QAN) group of airlines just under one-quarter of the international market. Among Australian airports, Sydney has 41.2% of the international market, followed by Melbourne (23.4%), Brisbane (15.0%), and Perth (12.8%).

Qantas (QAN) intends to add 100 jobs in Melbourne for 787 Maintenance Repair & Overhaul (MRO) and training.

The Qantas Group will establish a Maintenance & Training facility for subsidiary, Jetstar Airways (IMU) in Melbourne, as (IMU) prepares to take delivery of its first 787 airplane.

Qantas (QAN) says a flight simulator will be installed at the group's flight training center in Airport West, where it will also house a replica of the 787 cabin door, to be used for crew training.

With the facility, the company expects to create up to 100 jobs including cabin crew (CA) trainers, simulator instructors and engineers (MT).

Jetstar (IMU) is also leasing a wide body hangar from the group, which will undertake line maintenance of the 787. The facility is now being fitted out with the required equipment and tooling.

There are 48 engineers (MT) and 10 pilots (FC) who have already completed their 787 training, and more training is currently under way, said Jetstar (IMU) Group (CEO), Jayne Hrdlicka. "Our cabin crew (CA) will be the next group of (IMU) team members to be trained to operate on the 787 using our dedicated facilities at Airport West," she added.

Jetstar (IMU) has 14 787-8s on order. It is scheduled to receive the first airplane (36202, VH-VKA) in September. This will be followed by another two 787s in November and December (36203 and 36204).

September 2013: Qantas (QAN) will launch a new seasonal route between Perth and Auckland, as well as upgrade one return Sydney – Hong Kong flight to an A380, and up frequency to daily between Brisbane and Los Angeles.

(QAN) said it would offer the new twice-weekly, Perth – Auckland service between early December and the end of January, operating an A330 on the route. Meanwhile, it also upped capacity to Hong Kong by placing an A380 on an additional rotation between Sydney and the Asian powerhouse. This will mean it operates A380s on five weekly return services to Hong Kong a week.

This airplane move on the Hong Kong route will allow it to increase frequency on Brisbane – Los Angeles to daily. In addition, Qantas (QAN) will retime its Sydney – Christchurch service to connect with more international services at the Australian hub.

(QAN) (CEO), Alan Joyce said the changes were being made due to schedule optimization. “We’re able to make these changes by simply using our existing assets better. The new seasonal Perth to Auckland service uses an A330 that would otherwise be on the ground over the weekend,” he said.

Joyce said last week that reshaping (QAN)’s Asian network would be crucial to returning its international division to profit. He reiterated this today and said: “The Qantas Group is serious about Asia and we’ve already increased capacity to Hong Kong by +10% this year.” He added: “Our Brisbane to Los Angeles service is a strong performer and upgrading it to daily will improve travel options for customers heading to the United States from Queensland, which has great links to our domestic and regional networks.

Cathay Pacific Airways (CAT) has filed a formal objection to the application for an air transport operating license by Qantas (QAN) low-cost carrier (LCC) subsidiary, Jetstar Hong Kong on the grounds it is not a Hong Kong-based airline.

Germany’s airport investor Hochtief has sold its shares in Australia’s Sydney Airport to the Public Sector Pension Investment Board (PSP Investments) of Canada. The transaction results in a cash inflow of €308 million, and is a crucial milestone for closing the sale of Hochtief’s entire airport business line to PSP Investments for a total of approximately €1.1 billion. The deal is expected to be finalized before the end of the year.

Solena Fuels hopes to enter negotiations with Qantas (QAN) after completing a joint study showing the feasibility of building a waste-to-biofuel facility in Sydney.

Air Transport World (ATW) magazine reader, David Gregor sent this beautiful shot of the rollout of Qantas (QAN) (VH-EBA) in February 1959. This is one of three Boeing 707-138s still around. SEE PHOTO - - "QAN-707-138 - 2013-09."

Qantas (QAN) was the first airline outside the USA to buy the Boeing 707, and 13 were built for (QAN). The airplane shown in the picture was the 29th Boeing 707 built.

The airline’s first 707-138 entered service on Sydney - San Francisco on July 29, 1959.

The last 707-138 built, (VH-EBM), is owned and operated by actor, John Travolta and is painted in its last Qantas (QAN) colors registered as (N707JT).

The airplane shown was restored by the "(QFM) 707 Restoration" project, a group consisting of current and retired Qantas (QAN) staff.

Reader David Gregor began as an engineer (MT) at Qantas (QAN) in January 1964, six months before the last two 707-138s were delivered. He was part of the restoration team. This airplane was restored in England, and in 2006 it was flown home to Sydney via the USA. At that time, it was the oldest airworthy commercial jet. It now resides at the Qantas (QAN) Founder Museum at Longreach Queensland, but under a different registration.

October 2013: Qantas (QAN) has appointed Vanessa Hudson as Senior Executive VP The Americas. She takes on the role following the retirement of Wally Mariani, and will be responsible for the USA including Hawaii and South America. Hudson is former Executive Manager, Strategy & Planning for Qantas Domestic.

Solena Fuels hopes to enter negotiations with Qantas after completing a joint study showing the feasibility of building a waste-to-biofuel facility in Sydney. Solena already has a long-term offtake and investment agreement with British Airways to build its first waste-to-biofuel plant, planned to be operational by 2016 in Tilbury, east of London. The company is also close to completing negotiations with Lufthansa to build a waste-to-biofuel facility in Berlin, CEO Robert Do said.

November 2013: Qantas (QAN) has lashed out at Virgin Australia (VOZ)'s capital raising and says it has contacted the federal government to "express concerns". (QAN) said it was worried about "potentially damaging shifts in Australia’s aviation industry". This comes after (VOZ)'s main shareholders ((Etihad (EHD), Air New Zealand (ANZ), and Singapore Airlines (SIA)) agreed to each look at increasing their stakes in (VOZ) to give it a $300 million cash injection.

(QAN) argues this created an uneven playing field. "Virgin Australia (VOZ)’s proposed capital raising could see its foreign ownership rise to more than >80% without the need for any further regulatory approval. Despite this, (VOZ) would retain all the traffic rights given to Australian carriers," (QAN) said. "The decision of these shareholders to invest in (VOZ)’s loss-making strategy highlights that these airlines aren’t subject to the same commercial realities as (QAN)," it added.

But Virgin Australia (VOZ) hit back, arguing that it had introduced more choice and competition into the market. "Up until recently, Australia's corporate travel market was a monopoly for over a decade and Australian business travellers and the economy have suffered as a result of the lack of competition," it said.

"The capital raising is designed to enhance Virgin Australia (VOZ)'s liquidity and gearing position to ensure we are in a stronger position moving forward," it added.

Qantas Airways (QAN) will close one of its maintenance facilities near Melbourne in March. Many of the nearly 300 full-time staff and contractors will likely be laid off.

December 2013: News Item A-1: Qantas (QAN) has warned it expects to make an underlying loss before tax of between -A$250 million/-$226 million and -A$300 million for the half year ending December 31. The airline group blamed a “marked deterioration” in trading conditions, especially in November, “with both passenger loads and yields below the already negative trends for the year to date.”

As a result, -1,000 jobs will be cut over the next 12 months as (QAN) attempts to retrench and make savings of $2 billion over a three-year period. (CEO), Alan Joyce said: “We will do whatever we need to do to secure the Qantas Group’s future. The challenges we now face are immense—but we will overcome them.”

He said the group would make “accelerated cost reductions across all areas of the business,” which, in addition to the job losses, would include (CEO) and board pay cuts, a pay freeze and no fiscal year FY 2014 bonus for executives, a review of spending, network optimization and improved fleet utilization, and further overhead reductions.

Joyce said unit cost savings of -19% had been achieved since (FY) 2009 (excluding fuel), but acknowledged: “These actions are not enough to deal with the current situation.”

Yield (excluding the impact of foreign exchange movements) is expected to be approximately -3.5% lower for the half year compared to the same period last year, largely due to capacity increases in both domestic and international markets. Load factor is expected to be down -1.6 points year on year, while fuel costs are expected to be +A$88 million higher.

Joyce said the strong Australian dollar and high jet fuel costs had exacerbated (QAN)’s high cost base. He called on the Australian government to help level the playing field in the face of growing competition from international carriers owned and/or heavily supported by their governments.

“The Australian international market is the toughest anywhere in the world,” he said. “Our competitors in the international market, almost all owned or generously supported by their governments, have increased capacity to pursue Australian dollar profits, changing the shape of the market permanently.”

In addition, Joyce accused Virgin Australia (VOZ)’s strategy of attracting more than >A$300 million of foreign government capital to finance domestic capacity increases, “designed to weaken (QAN) in the domestic market,” of having “profound implications for the future of Australia’s aviation industry. The uneven playing field in Australian aviation is being tilted further.”

He said the group is trying to identify structural changes that could potentially unlock sources of capital and value for shareholders, stressing that “no options will be excluded from the review.”

Qantas (QAN) said that continued global economic uncertainty, high fuel prices and unfavorable foreign exchange rates meant the outlook for the second half of (FY) 2014 “remained volatile.” As a result, it is “not possible to provide further guidance at this time.”

Standard & Poor (S&P)’s Ratings Services has downgraded Qantas (QAN)’s corporate credit rating to so-called “junk” status following (QAN)’s recent surprise profit warning. Describing (QAN)’s outlook as “negative,” (S&P) lowered (QAN) to BB+/B from BBB-/A-3, and its senior unsecured debt ratings BB+ from BBB-, placing the issue ratings on CreditWatch with negative implications.

"BBB-" is the lowest investment grade: Anything lower than that is known as “junk” in investment circles and can push borrowing costs higher as well as limiting investment potential.

(S&P) said: “The downgrades reflect our view that intense competition in the airline industry has weakened (QAN)’s business risk profile to ‘fair’ from ‘satisfactory,’ and financial risk profile to ‘significant’ from ‘intermediate.’ We don’t expect (QAN) to recover to a credit profile commensurate with a BBB- rating in the near term.”

(S&P) acknowledged (QAN) had a “strong financial flexibility and a good track record of responding to earnings pressures through cost cutting and other measures. However, we believe in the current circumstances, the benefits would take time to realize and the positive impact would not be sufficient to outweigh the pressure on (QAN)’s stand-alone credit profile.”

It said a “structural shift in the domestic competitive landscape” had weakened the airline, while its partnership with Emirates (EAD) had yet to generate sufficient benefits to offset mounting competition in its international operations.

Despite a cost-cutting drive that is expected to trim -A$2 billion/-$1.8 billion over three years, (S&P) believes the benefits will take time to filter through and would be “unlikely to offset the cyclical and structural headwinds facing (QAN).” It doesn’t believe that signs of even slow recovery will be detectable until 2015.

(S&P) said it could lower the rating further if (QAN) fails to arrest the downward trend in its profitability or if its liquidity position weakens, but could revise the rating upward if the airline is able to manage its vulnerability to intense competitive behavior.

(S&P) said the BB+ rating did not factor in any “extraordinary government support,” but said it could revise (QAN) rating upward if it assessed the airline to be a government-related entity.

China Southern Airlines (GUN) is expected to establish a code share alliance with Qantas (QAN) in early 2014 to strengthen its position between Europe and Australia and New Zealand on the so-called “Canton routes.”

According to the deal, both carriers would code share on four international routes from Guangzhou to Sydney, Melbourne, Perth, and Brisbane. The carriers will also code share on 10 Australian domestic routes (Sydney - Brisbane, Sydney - Melbourne, Melbourne - Adelaide, Sydney - Cairns, Sydney - Canberra, Cairns - Brisbane, Melbourne - Brisbane, Sydney - Gold Coast, Sydney - Adelaide, and Sydney - Auckland) and four Chinese domestic routes from Guangzhou to Kunming, Urumqi, Fuzhou, and Xiamen.

In addition, both carriers will cooperate on the exchange of pilots (FC) and cargo.

China Southern (GUN) Chairman, Si Xianmin said that the deal “raised the curtain of deepening cooperation between China Southern (GUN) and Qantas (QAN).”

Qantas (QAN) (CEO), Alan Joyce said the deal allows his airline to tap into the world’s fastest growing aviation market.

In recent years, (GUN) has committed to enhance its position on the Canton routes. It operates nearly 45 weekly flights to Australia and New Zealand.

Qantas (QAN) has started services between the capital of Western Australia, Perth (PER) and the largest city in New Zealand, Auckland (AKL). The 5,350 km sector will be flown twice-weekly (Fridays and Saturdays) by the Oneworld (ONW) Alliance carrier’s 235-seat A330s. Beginning on December 6th, and operating until January 31st only, (QAN) will face competition from Air New Zealand (ANZ)’s daily 777-200 operation.

737-838 (39366, VH-XZK "Cook"), delivery.

News Item A-2: See Safety Video:

January 2014: SEE ATTACHED - - "QAN-2014-01-TOP 2013 WORLD AIRLINES-A/B."

Moody’s Investors Service has become the second ratings agency to downgrade Qantas (QAN) to "junk" status, forcing (QAN)’s borrowing costs to rise.

Moody’s downgraded (QAN)’s senior unsecured rating to Ba2 from Baa3, and its short-term rating to Not Prime (NP) from P-3; it said the outlook for the ratings is negative.

The downgrading follows (QAN)’s profit warning last month, which prompted Standard & Poor’s to take similar action. (QAN) announced December 5th that it expected to make an underlying loss before tax of between -AUD250 million/-$223 million) and -AUD300 million for the six-month period ended December 31 2013, and would be shedding -1,000 jobs in an attempt to cut costs.

Moody’s also assigned a Corporate Family Rating (CFR) of Ba1 to Qantas (QAN). This is typically assigned to non-investment grade corporations and “reflects Moody’s opinion on (QAN)’s ability to honor its financial obligations as if it had a single class of debt and a single consolidated legal entity structure,” the agency said.

Moody’s Senior VP, Ian Lewis said the downgrade to Ba2 “reflects a worse-than-expected impact on (QAN)’s credit profile of a marked sharp deterioration in the company’s core domestic business, which has been a key supporting factor of its previous investment grade rating. We expect these conditions to exacerbate an already high financial leverage.” Moody’s estimates that approximately $737 million of debt securities are affected.

Lewis largely attributed the (QAN) deterioration to aggressive competition from Virgin Australia (VOZ), which had “shifted the market dynamic against (QAN) in a structural way. As such, we expect that (QAN)’s business risk and financial leverage will remain at elevated levels and inconsistent with an investment grade rating.”

He acknowledged that (QAN) is also struggling to turn around its loss-making international business, and is “exposed to execution challenges on two fronts.”

Lewis said the Ba2 senior unsecured rating reflected “the higher probability of default in the speculative grade category and the presence of material secured debt in (QAN)’s capital structure.” And he warned there was a risk of further rating downgrade if (QAN) is “unable to address these issues and arrest the decline in its credit profile.”

However, Moody’s also pointed out the ratings outlook could be revised to stable if (QAN) is able to restore the profitability of both its international and domestic operations to levels that could sustain appropriate levels of debt.

Moody’s also said government support for (QAN) could potentially support (QAN)’s liquidity position and/or credit profile. The Australian government has flagged the need for a debate on whether Australia requires a national carrier, saying it would consider supporting (QAN) if that is what the Australian public wants.

Lewis acknowledged the issue is currently just a matter of discussion and gave no details on how the government plans to proceed. However, he said: “Moody’s will observe any potential for positive credit impact when and if such counter measures are announced and depending on the form of the support.”

2 737-838s (33760, VH-VXT; 33761, VH-VXU), deliveries and A330-202 (1198, VH-EBQ), returned from Jetstar (IMU).


February 2014: The Qantas Group reported a first-half fiscal year 2014 net loss of -A$235 million/-$208 million, a -A$346 million plunge from the +A$111 million profit Qantas (QAN) posted in the year-ago period. The Group’s first half ended December 31, 2013.

First-half revenue was A$7.9 billion, down -4% compared to the year-ago period. For the first half, Qantas (QAN) Domestic reported underlying (EBIT) of A$57 million, a -73.9% drop from the Group domestic carrier’s +A$218 profit during the year-ago period.

Qantas International posted an underlying (EBIT) loss of -A$262 million in the first half, nearly tripling the -A$91 loss the Group posted for its international carrier in first-half 2013.

Qantas (QAN) subsidiary Jetstar (IMU) reported an underlying (EBIT) loss of -A$16 million, down from the +A$128 million profit posted by the Group’s low-cost carrier (LCC) in the first-half of 2013.

Qantas Freight (ACS) posted underlying (EBIT) of A$11 million, down -50% from the +A$22 million profit posted in first-half 2013. “We are facing some of the toughest conditions Qantas (QAN) has ever seen,” Qantas (CEO), Alan Joyce said. “Australia has been hit by a giant wave of international airline capacity the Australian domestic market has been distorted by current Australian aviation policy, which allows Virgin Australia (VOZ) to be majority-owned by three foreign-backed airlines and yet retain access to Australian bilateral flying rights.”

Concurrent with the release of its financial results, the Group announced the initial details of an immediate -A$2 billion cost-reduction program, including plans to defer or sell more than >50 airplanes and eliminate -5,000 full-time equivalent positions by fiscal year (FY) 2017.

“With structural economic changes being exacerbated by the uneven playing field in domestic aviation, we must now take actions that are unprecedented in scope and depth,” Joyce said.

Earlier, Qantas (QAN) had described as speculation reports that it was planning to cut -3,000 jobs and slash routes as part of its push to cut costs by -AU$2 billion.

(QAN) was expected to release the details of its three-year cost-cutting program, when it unveiled its interim underlying pre-tax loss of up to -AU$300 million.

The speculation came as union officials said they were expecting job losses in addition to the -1,000 job cuts (QAN) announced last year after it revealed it was shutting its maintenance facility at Victoria's Avalon Airport.

(QAN) said the 3,000 number, first aired on Sydney radio, was incorrect but a spokesman would not comment on how many jobs were under threat. Other rumours have included cuts to (QAN)'s flagship A380 fleet, as well as an end to flights between Dubai and London. (QAN) said both rumors were wrong.

Qantas (QAN) (CEO), Alan Joyce has equated cuts already announced to those made by alliance partner American Airlines (AAL) during chapter 11 bankruptcy.

(QAN) also is undergoing a restructuring review that may include a partial float of its frequent flyer program and the sale of terminals.

Earlier, (QAN) said it would axe on May 31 a code share agreement with South African Airways (SAA) that was up for renewal at the end of the year. It said it would continue to fly its daily Boeing 747 service from Sydney to Johannesburg.

"Regulators had previously indicated that the extension of the code share beyond December, 2014, was unlikely, so winding it up earlier means we can create new options for customers travelling between Perth and Dubai," (QAN) said. "This includes a thrice-daily code share with Emirates (EAD) from Perth to Dubai, with onward connections to Johannesburg, Cape Town, and Durban."

Atlas Air (TLS) and Qantas Freight (ACS), the cargo unit of Australia’s Qantas Airways (QAN), have extended their airplane, crew, maintenance & insurance (ACMI) wet-lease contract.

Purchase, New York-based (TLS) and (ACS) have had an (ACMI) accord for the last decade, and (TLS) said the renewed agreement clears it to continue operating two Boeing 747-400F freighters in (ACMI) service for Qantas (QAN) on transpacific routes linking Australia and Asia to the USA.

Qantas Freight (ACS) Executive Manager, Alison Webster added that Atlas (TLS)’s (ACMI) service has allowed (QAN) to have greater access to “valued [cargo] customers in China, the USA, Thailand, New Zealand, and Australia. (TLS) gives us the ability to integrate long-haul freighter airplanes into our fleet and strengthen the reach of our cargo network.”

INCDT: A Qantas (QAN) A380 superjumbo has collided with another of QAN)'s Boeing 747-400 jumbos at Los Angeles International Airport, causing damage to the wing tips of both planes and forcing the cancellation of flights.

The incident occurred at 9:00 pm local time on February 27th, while the airplane were being towed out of a hangar. Sources said they believed the planes had suffered "millions of dollars" worth of damage.

No passengers were on board either airplane but as a result of the collision, (QAN) cancelled QF94 from Los Angeles to Melbourne and QF16 to Brisbane.

The incident caps off a woeful week for (QAN), which confirmed it will axe -5,000 jobs, cancel planes orders and retire gas-guzzlers in an attempt to strip AU$2 billion in costs out of the business.

A (QAN) spokeswoman said (QAN) would accommodate passengers in hotels overnight and put them on the next available flights out of Los Angeles. Air safety authorities in Australia have been notified of the accident and a full investigation is under way.

The wing span of a (QAN) A380, which can carry 484 passengers, is almost 80 metres. The A380 (QF94) was due to depart Los Angeles at 11:30 pm local time and arrive in Melbourne at 10:20 am (AEST) on Sunday. The 747-400 (QF16) was due to depart at 11:50 pm local time and arrive in Brisbane at 8:00 am (AEST) on Sunday.

SEE ATTACHED - - "QAN-2014-02 - 737-400 RETIRED" re-last (QAN) Boeing 737-400 (VH-TJS "JABIRU") on February 23 flying its last passenger service.

April 2014: The Australian government has approved a second airport for Sydney after decades of debate. The airport will be built at Badgerys Creek in Western Sydney.

Prime Minister, Tony Abbott said Australia needs the new airport because Kingsford-Smith Airport is reaching capacity. “Sydney’s airport is the gateway to Australia’s largest city and accounts for 40% of international arrivals and 50% of international air freight each year. If no action is taken on a second airport, Australia would lose out on 80,000 additional jobs and $34 billion in economic activity by 2060.” Planning for the new airport will start immediately and construction is expected to start in 2016, with completion targeted for 2025.

The Australian government recently approved Sydney Airport’s Master Plan, a 20-year operational and strategic vision that identifies how the site can meet forecast demand of 74 million passengers in 2033. But while the government acknowledged the Master Plan is “a crucial planning document,” it also pointed out that it does “not negate the need for a second airport” and is “not required to assess how to meet all demand in the Sydney region.” A new Master Plan is required every five years.

As part of the government’s sale of Kingsford-Smith in 2002, the right of the purchaser to develop and operate a second major airport in the Sydney region was built into the sale price. The government said it would meet its obligations under the right of first refusal, which has been factored into the project timeline. Kingsford-Smith is owned by more than >100,000 shareholders through the Australian Stock Exchange and is managed by Sydney Airport Corp.

Qantas (QAN) welcomed the announcement about the Badgerys Creek site.
(QAN) (CEO), Alan Joyce said: “Qantas (QAN) has long supported the building of a second airport at Badgerys Creek, as have a number of detailed studies. Sydney is the key gateway for air traffic in and out of Australia and the benefits of having two major airports will be felt nationwide.”

Although the Badgerys Creek airport will not be fully operational for a decade, the Commonwealth and New South Wales governments are investing more than AUD1 billion/$0.9 billion over the forward estimates and AUD3.5 billion over 10 years in major infrastructure upgrades, including transport links to capitalize on economic gains from the airport development.

May 2014: Australia’s international traffic is growing at +7%; the Qantas (QAS) share is now down at 16% as AirAsia X (ASX) grows fast among leading carriers. The fastest-growing airports for international traffic are Adelaide (+25%) and Perth (+9%), though Sydney remains the busiest international airport by far. Perth’s growth was helped by the launch in mid-December of five times weekly flights from Singapore Airlines (SIA)’s long-haul, low-cost carrier (LCC) subsidiary, Scoot (SCT).

Australia’s domestic air travel market grew by a modest +1.8% in 2013 to reach 57.5 million passengers. The country’s international air travel sector showed rather healthier growth, up +5.9% to 31.4 million. In January 2014, international traffic was up an impressive +10.5%, the first double-digit increase since March 2012. How much of this was down to English cricket fans returning home in disgust at their team’s 5-0 thrashing by the home team in the test series is not clear.

Among the country’s top 10 domestic routes, nine reported growth in the year-ending February 2014, with Melbourne - Hobart (+8.5%) leading the way, and only Melbourne - Gold Coast (-4.5%) reporting a decline. With almost 8.3 million annual passengers, the Sydney - Melbourne route remains by far the country’s busiest air route (and one of the busiest in the world), and grew by +1.7% in the last 12 months.

New domestic routes launched in the last few months include several new routes from Tigerair Australia (TAU) from its Sydney and Brisbane bases, as well as Qantas (QAN) (Brisbane to Port Macquarie), and Virgin Australia (Melbourne - Hamilton Island).

For the year ended January 2014, international traffic was up +6.6%. Sydney leads the way with 13.0 million passengers (up +5.1%), followed by Melbourne with 7.4 million (up +8.1%) and Brisbane with 4.7 million (up +5.6%). Perth reported +9% growth to almost four million international passengers, while Adelaide reported an impressive +25% increase to 825,000. Since March 2009, international traffic has grown year-on-year every month with the exception of March 2011. Significant new international services launched in the last 12 months to/from Australia include:

* AirAsia X (ASX): Kuala Lumpur (KUL) to Adelaide (ADL) on October 30th 2013, with four times weekly A330-300 flights.

* Air India (AIN): Delhi (DEL) to Sydney (SYD) and Melbourne (MEL) on August 29th 2013, with daily 787 flights.

* Fiji Airways (APC): Suva (SUV) to Sydney (SYD) on May 2nd 2014, with twice-weekly 737 flights.

* Jetstar Airways (IMU): Adelaide (ADL) to Auckland (AKL) on December 16th 2013, with thrice-weekly A320 flights.

* (IMU): Adelaide (ADL) to Denpasar (DPS) on December 17th 2013, with thrice-weekly A320 flights.

* (IMU): Melbourne (MEL) to Phuket (HKT) on December 14th 2013, with twice-weekly A332 service.

* (IMU): Melbourne (MEL) to Tokyo Narita (NRT) on April 29th 2014, with four times weekly A332 service.

* (IMU): Perth (PER) to Lombok (LOP) on September 24th 2013, with four times weekly A320 service.

* Scoot (SCT): Singapore (SIN) to Perth (PER) on December 12th 2013, with five times weekly 777-200 service.

* Sichuan Airlines (SIC): Chongqing (CKG) to Sydney (SYD) on December 20th 2013, twice-weekly with A330-200 service.

According to the latest figures for January 2014, Qantas (QAN) has just 16.0% of the international market followed by Emirates (EAD) (9.3%). Jetstar Airways (IMU) and Singapore Airlines (SIA) were tied in third place with 8.4% each. Combining (QAN) and (IMU) still gives the Qantas Group of airlines less than one-quarter of the Australian international market. The biggest gainer in terms of market share is AirAsia X (ASX), which has increased its presence from 3.4% in January 2013 to 4.9% in January 2014.

Australian flag carrier, Qantas (QAN) is seeking voluntary redundancy from its pilots (FC), in a first move to cut -$1.8 billion in costs and reduce staffing levels by -5,000 over the next three years. The first cuts will come from the ranks of its Boeing 767 and 747 Captains (FC) and First Officers (FC).

In February, the Qantas Group reported a first-half fiscal year 2014 net loss of -A$235 million/-$208 million, -A$346 million worse than posted in the year-ago period.

In a letter to pilots (FC), Qantas (QAN) Chief Pilot, Captain Dick Tobiano confirmed the company’s February decision to axe all of its 767s by the first quarter of 2015, and retire six of its 15 747s by the first half of 2016 as part of the cost reduction program. This means the 767 and 747 pilots (FC) would be mainly superfluous to Flight Operations after next year; retraining would not be in line with ongoing reductions.

(QAN) employs a total of some 2,000 pilots (FC) across all its domestic and international operations. Although Qantas (QAN) has given no numbers, it is believed (QAN) is looking for around 100 voluntary redundancies from the ranks of its 767 and 747 pilots (FC).

If the redundancy offers are widely taken up, it will be the first pilot (FC) redundancies (QAN) has seen in some 40 years (although one pilot (FC) said that many serving officers do so little flying now due to route and airplane reductions, that “it would be a relief to either be able to fly or get out.”

A number of Qantas (QAN) pilots are already signed up on “leave without pay” contracts, including some 100 or so Jetstar (IMU) pilots (FC), who are currently underemployed due to reductions in the (IMU) subsidiary’s operations to Manila, Tokyo, Bali, and Singapore.

Qantas (QAN) began twice-weekly (Saturdays and Sundays) operations between Sydney (SYD) and Hervey Bay (HVB) in Queensland, Australia on May 17th. Flown by (QAN)’s 110-seat 717s, the 970 km sector will face daily competition from Virgin Australia Airlines (VOZ)’s existing operation.

Nearly six months since Australia mandated the use of Automatic Dependent Surveillance-Broadcast (ADS-B), more than >97% of domestic and international airline flights in Australian airspace above >29,000 feet (flight level 290) are being conducted using (ADS-B) surveillance, according to air navigation services provider, Airservices Australia.

The first (ADS-B) fitment mandate became effective December 12, 2013 for all Instrument Flight Rules (IFR) flights at or above >29,000 ft. in Australian airspace. On February 6, 2014, the Civil Aviation Safety Authority (CASA) required all new (IFR) airplane registrations in Australia to be (ADS-B) capable, as well as all new transponder installations in older (IFR) airplanes.

As of January 6, 2016, all (IFR) airplanes operating within 500 nm to the north and east of Perth, Western Australia, will be required to be fitted with (ADS-B). By January 6, 2017, all Australian registered (IFR) airplanes flying within Australia’s airspace will be required to operate using (ADS-B).

Australia has a network of 61 (ADS-B) ground stations providing continent-wide air traffic control surveillance. Over the next three years, Airservices will install a further 15 (ADS-B) ground stations to provide additional surveillance coverage at lower altitudes and extend higher level coverage offshore.

Airservices Australia said the aviation industry has “strongly supported (ADS-B), with Australia’s major airlines and operators, including a number of international and regional airlines, embracing the new technology by investing in the installation of (ADS-B) equipment into their airplanes.”

July 2014: Qantas (QAN) began its second link to Hamilton Island (HTI) in Queensland on July 2nd, joining its existing daily service from Cairns, this time adding thrice-weekly operations from Sydney (SYD). Operated by the airline’s 168-seat 737-838s, the operation will face direct competition from Jetstar Airways (IMU) and Virgin Australia Airlines (VOZ) (both daily).

(QAN) will refocus its service between Australia and New Zealand to allow greater flexibility to adjust capacity during shoulder and low seasons. While relatively straightforward, Qantas (QAN) has not previously done this. (QAN) in 2013 adjusted monthly seat capacity by -9% to +7% while Air New Zealand (ANZ) adjusted capacity by -19% to +16%, Jetstar (IMU) by -22% to +22% and Virgin Australia (VOZ) by -15% to +10%.

(ANZ) has been rewarded with consistently high load factors, while Jetstar (IMU) and especially (QAN) have performed weakly in off-periods. There is now an opportunity for closer integration between Jetstar (IMU) and Qantas QAN). Virgin Australia (VOZ) has had the weakest load factors, perhaps suggesting its move to a premium positioning is not commensurate with its core trans-Tasman leisure traffic. It too may need to revisit its approach.

(ANZ) is the largest carrier between New Zealand and Australia, with +67% more seat capacity than the second largest carrier, Qantas (QAN). The Qantas Group, comprising (QAN) and Jetstar (IMU), offered 2.5 million seats in 2013 compared to (ANZ)'s 2.9 million. (ANZ) and (VOZ) have a joint venture (JV) across the Tasman that offered 4.2 million seats in 2013 to the Qantas Group's 2.5 million.

(QAN) also has a partnership with Emirates (EAD), which flies multiple trans-Tasman routes for local traffic (it has uplift rights) as well as to link New Zealand with its global network.

However, these statistics, like other fifth freedom operators, are not complete, and so are not included. Further, the focus of this analysis is on how major carriers adjust to seasonal trans-Tasman demand, nuances that impact point-to-point operators more than fifth freedom operators.

A Qantas Group statement announcing the changes, makes numerous references to (QAN) being more agile across the Tasman: "(QAN) and (IMU) have published a number of changes their trans-Tasman schedules, designed . . . to better reflect seasonal peaks. Rather than the flat, year round schedule it offers now, (QAN) will move to more dynamic scheduling across low season, shoulder periods and peak seasons on the trans-Tasman."

Qantas (QAN) kept relatively flat capacity year-round in 2013. It can be shown by comparing each month's capacity difference from the monthly average. (QAN) on average had approximately 145,500 seats on offer each month of 2013. Capacity peaked in December 2013, with 156,000 seats, and reached a low in February 2013 with 132,000 seats. (There are inherent differences due to varying numbers of days in a month, but this alone does not fully explain the lower capacity in February 2013.)

(QAN) in 2013 adjusted monthly capacity by -9% to +7%. (ANZ) in comparison adjusted capacity by -19% to +16%, Jetstar (IMU) by -22% to +22% and Virgin Australia (VOZ) by -15% to +10%.

(QAN)'s competitors, as well as its wholly owned Jetstar (IMU) (LCC) subsidiary, have meanwhile been agile, matching capacity to demand. Although more involved and intricate, the move obviously delivers financial benefits. Or viewed another way, (QAN)'s relatively flat trans-Tasman network is perhaps another sign of the legacy practices it is only now shaking off. At home, the announcement was seen with some negativity even though the implication of agility was clearly a positive.

Qantas (QAN) in the last three years has generally deployed capacity consistently year-on-year, with an exception in June 2011, when an earthquake struck Christchurch, dampening demand, while an ash cloud forced cancellations.

(QAN) in 2012 grew capacity throughout most of the year, while 2013 experienced growth in mostly the first half of the year, and then peak December 2013 traveling season. 2014 data through April 2014, the latest available, indicates relatively flat year-on-year capacity deployment.

Jetstar (IMU) has changed year-on-year capacity levels more significantly as well as adjusting monthly capacity to respond to peaks. (IMU)'s seat capacity in 2012 (741,000) and 2013 (731,000) was lower than in 2011 (845,000).

However, capacity data for the first four months of 2014 shows the figures above 2012 and 2013 but still below 2011.

Jetstar (IMU) capacity has peaked according to leisure demand: increasing in December and January around summer and Christmas/New Year holidays, again in April for Easter and short school breaks and then again in July for winter school breaks.

(ANZ) has been very consistent with its capacity year-on-year. Its 2.86 million seats in 2011 were followed with 2.87 million in 2012 and then limited 2% growth to +2.93 million in 2013.

Capacity in the first four months of 2014 is up +2%. On a month-to-month basis, however, (ANZ) has sharply adjusted capacity, with capacity in the slow May and June seasons nearly a third less than in the peak December and January season.

Virgin Australia (VOZ) has shown monthly variance but to a lower degree than Air New Zealand (ANZ). Its 1.23 million seats in 2011 grew to 1.25 million in 2012 and then 1.31 million in 2013. Capacity in the first four months of 2014 is up 4.5%.

(QAN) also says of the changes: "This mix is designed to better reflect demand for customers wanting a low fare leisure option on Jetstar (IMU), while still providing a large number of premium leisure and business seats on (QAN)."

(ANZ), and to a lesser extent Virgin Australia (VOZ), have a more balanced cost base than between Qantas (QAN) and (IMU) that allows (ANZ) and (VOZ) to reach both ends of the travel spectrum. (This is even with (QAN)'s trans-Tasman flights being operated by wholly owned subsidiary Jetconnect (IMU) in New Zealand, which offers lower staffing costs than (QAN)Qantas could achieve in Australia.)

Further, (ANZ)'s A320 services are without a dedicated business (C) class, allowing it to sell more economy (Y) seats, if demand for its business proposition (which includes a blocked middle seat) is low. Qantas (QAN) in comparison has an inflexible business (C) class configuration, while Jetstar (IMU) cannot offer a premium proposition.

(QAN) and (IMU) have generally been running a dual-brand strategy, but this has been largely absent across the Tasman, primarily due to (QAN) not managing its capacity.

Looking only at (IMU) and (QAN)'s monthly capacity variation in 2013, Jetstar (IMU) is adjusting its capacity, while (QAN) is not. The two could have applied an inverse capacity deployment strategy: when (IMU) increases capacity during holidays, (QAN) could decrease due to limited travel demand in the holiday period.

Likewise, during slower leisure periods, (IMU) could reduce more, leaving (QAN) to absorb some of the capacity. There are of course limits to this strategy, given the reality of available airplanes and wanting to maximize those assets, hence (QAN) is adding limited capacity during peak holiday periods.

Load factors cannot necessarily give a definitive view of a market when viewed in isolation, but they can still provide some insights. (ANZ) nearly managed a consistent 80 - 85% LF load factor throughout 2013, while Qantas dipped to 70% LF in low seasons. With the exception of the peak seasons in early 2013 and late 2013, (IMU) and (QAN) had a lower load factor than (ANZ), suggesting their dual-brand strategy still needs refinement, if one is to excel in certain periods.

Virgin Australia (VOZ) had weak load factors throughout the year, suggesting its move to a full-service positioning is taking longer to realize in the trans-Tasman market, which has been leisure-focused for (VOZ).

Jetstar (IMU) offers lower fares, while (ANZ)'s various fare bundles can also be more attractive. Yield information is unavailable, but (ANZ) is understood to have brought its short-haul network to profitability, while (QAN) is seeking stronger financial performance across the Tasman.

The Qantas Group's changes were greeted publicly with the common negative refrain about (QAN) reducing services and (IMU) growing. But once again, the changes are clearly overdue, as (QAN)'s footprint has been too large for what it can sustainably offer in a changed world, in particular in the intensively competitive Tasman market. While (QAN) pioneered a dual-brand strategy in response to changes during the last decade, it is evident that across the Tasman (and elsewhere in the network) futher integration and refinement still remains to be done. Often this needs to start with (QAN) changing.

(QAN) may also need to consider if its one-size-fits-all premium model is sustainable. (ANZ) is showing apparent success with a flexible cabin, while in the Australian east-west transcontinental market, high frequencies have resulted in a flood of capacity. On the other side of the Pacific, American Airlines (AAL) is now offering high-frequency, low-capacity service in its transcontinental markets. As Qantas (QAN) plans for the future, it has much to clean up of its legacy past.

In the peak season, (QAN) will reduce weekly flights by three, while during the low season, (QAN) will reduce weekly flights by 15. Some of this demand will be taken up by (IMU), which will add upwards of seven new services. However, (IMU) will exit the Adelaide - Auckland market, which it served three times a week.

Qantas (QAN) is laying off another 167 staff from its Engineering department, the latest step in (QAN)’s plan to cut -5,000 positions from its workforce within three years.

(QAN) said it has already cut -2,200 employees through the end of June, and expects to lay off another 1,800 by the end of June 2015. The overall target of 5,000 was announced in February, as (QAN) looks to trim -A$2 billion/-$1.9 billion in costs over three years to stem rising losses.

Almost all work groups have been affected by the layoffs. Significant cuts to the Engineering ranks had already been made through the consolidation of some heavy maintenance facilities.

The new round of -167 layoffs will include 73 licensed engineers (MT) in the Line Maintenance operation, 58 engineers (MT) from Component Maintenance services, and -36 “back office” supply chain support and administration workers.

Qantas (QAN) had previously signaled that its Line Maintenance operation would be restructured. “The simple fact is as we are retiring our older airplanes, aligning our Maintenance systems with Boeing recommendations and implementing process improvements, we need fewer Engineering employees,” said Lyell Strambi, who heads the Qantas (QAN) domestic business.

The accelerated phase-out of Boeing 767s and 747s is reducing workload considerably, while newer types entering the fleet do not need as much maintenance, Strambi said.

(QAN) said it reduced the number of forced layoffs from its Line Maintenance division through voluntary redundancies, job swaps and redeployments.

Qantas (QAN) has been in discussions with the Australian Licensed Aircraft Engineers Association (ALAEA) regarding staff cuts. The union said (QAN) rejected “cost-neutral” proposals that would have “prevented redundancies and [given] greater flexibility to the airline.”

For example, union leaders note that Engineers (MT) have, on average, more than six months of accrued leave that could have been used to offset the layoffs.

The (ALAEA) said it had warned (QAN) if the reductions were implemented, “(QAN) would not have enough Engineers (MT) for ongoing servicing.”

Australia’s air navigation services provider, Airservices Australia, will install 13 new Automatic Dependent Surveillance-Broadcast (ADS-B) ground stations starting next year to enhance its coverage of satellite-based air traffic surveillance in Australian airspace. This boost (ADS-B) coverage ahead of 2017 airplane fitment mandate.

Nearly six months since Australia mandated the use of Automatic Dependent Surveillance-Broadcast (ADS-B), more than >97% of domestic and international airline flights in Australian airspace above >29,000 feet (flight level 290) are being conducted using (ADS-B) surveillance, according to air navigation services provider, Airservices Australia.

The first (ADS-B) fitment mandate became effective December 12, 2013 for all Instrument Flight Rules (IFR) flights at or above >29,000 ft in Australian airspace. On February 6, 2014, the Civil Aviation Safety Authority (CASA) required all new (IFR) airplane registrations in Australia to be (ADS-B) capable, as well as all new transponder installations in older (IFR) airplanes.

As of January 6, 2016, all (IFR) airplanes operating within 500 nm to the north and east of Perth, Western Australia, will be required to be fitted with (ADS-B). By January 6, 2017, all Australian registered (IFR) airplanes flying within Australia’s airspace will be required to operate using (ADS-B).

Australia has a network of 61 (ADS-B) ground stations providing continent-wide air traffic control surveillance. Over the next three years, Airservices will install a further 15 (ADS-B) ground stations to provide additional surveillance coverage at lower altitudes and extend higher level coverage offshore.

Airservices Australia said the aviation industry has “strongly supported (ADS-B), with Australia’s major airlines and operators, including a number of international and regional airlines, embracing the new technology by investing in the installation of (ADS-B) equipment into their airplanes.”

August 2014: Qantas (QAN) is making major changes to its corporate structure that will allow it to attract new foreign shareholders for its international business following a full fiscal year record loss of -A$2.8 billion/-$2.6 billion.

The new structure will see the creation of a holding company that will oversee separate domestic and international entities. A move of this type has been expected due to the government’s recent relaxation of foreign ownership restrictions that apply to Qantas (QAN).

(QAN) said the changes will increase its potential to seek overseas investment in the international operation, although foreign ownership will still be limited to 49%. Joyce said there are no such deals currently under consideration, but it gives (QAN) the flexibility to seek new international partners in the long term.

Because of the creation of the new structure, (QAN) decided to reassess the value of the international fleet, a move that caused most of the net loss. The A$2.6 billion write-down is largely the result of historic airplane purchases made, when the Australian dollar was worth significantly less versus the USA dollar.

(QAN)’s pre-tax underlying loss of -A$646 million for the 2014 fiscal year was not as high as analysts had been predicting. (CEO), Alan Joyce estimates that a restructuring program introduced in February will result in (QAN) returning to an underlying profit for the fiscal half year through December 31.

(QAN) decided against fully or partially divesting parts of its business, and it confirmed it will not be increasing the -5,000 layoffs that have already been announced.

(QAN) had previously outlined order deferrals and early retirements affecting about 50 airplanes, and it has now added to this list.

(QAN) has deferred 21 current-generation Airbus A320 orders for four years and converted them to A320neos. This boosts the A320neo order total to 99 airplanes. Five more A320ceo orders have also been cut.

Additional airplanes will be sold in its fiscal year 2015, including two Boeing 737-800s, and two Bombardier DHC-8-Q300s. Leases will not be renewed on two Airbus A330-200s and they will exit the fleet in the first half of Fiscal Year (FY) 2016.

Further changes to the wide body fleet plan will see the first of (QAN)’s 50 787-9 options and purchase rights deferred from 2016 to 2017. (QAN) has previously signaled that it plans to exercise these rights, but only when the international business returns to profitability.

A new code share agreement between Taiwan’s China Airlines (CHI) and Qantas (QAN) represents the latest step in (QAN)’s drive to expand its Asian network.

Under the deal, (QAN) will place its code on (CHI)’s flights from Brisbane and Sydney to Taipei (routes that (QAN) offers as a one-stop connecting service). The agreement does not apply to any routes beyond Taipei or Australian domestic routes, a (QAN) official said. However, the carriers have interline agreements covering such flights.

The code share agreement is expected to begin October 15, although it is subject to regulatory approvals.

Since cutting back its European services, (QAN)’s strategy has been to increase its focus on Asia. Besides using its own flights and those of its Jetstar (IMU) affiliates, (QAN) has been relying on new partnerships to boost its network in this region. (QAN) said the China Airlines (CHI) deal will complement its commercial relationships with China Eastern (CEA) and China Southern (GUN). (QAN) also has a relationship with Cathay Pacific Airways (CAT) through the Oneworld (ONW) Alliance, although this relationship has become somewhat strained.*

* Qantas Airways (QAN) has tweaked the structure of its troubled Jetstar Hong Kong venture with local partner, Shun Tak Holdings, in a bid to better demonstrate that control of the business resides in Hong Kong, and speed up the launch of the airline.

In its annual accounts just released, (QAN) said its ownership interest in Jetstar Hong Kong (accounted for under the equity method) had fallen to 25% from 33% at the time of its last update in February, which listed the interest as of December.

A Jetstar Hong Kongt spokeswoman said the start-up airline's share registry had been updated in February to reflect changes to the voting structure and the appointment of two new board members from Shun Tak. The Hong Kong company, Shun Tak Holdings, now has 51% of the shareholder voting rights, while (QAN) and China Eastern (CEA) will each retain 24.5%. "Changes to the voting rights and the appointment of additional board members from the local investor were made to further cement the Hong Kong leadership and governance at a board level."

Rival Cathay Pacific (CAT) has been lobbying against approvals for Jetstar Hong Kong on the basis that it does not comply with Hong Kong's Basic Law, on the basis that real control of Jetstar Hong Kong will be in Australia.

The change to voting rights is the latest move taken to demonstrate that control is in Hong Kong. The airline was initially a 50-50 joint venture with China Eastern (CEA), but Shun Tak was introduced as a shareholder last year.

Jetstar Hong Kong had 9 A320s sitting idle at Airbus headquarters in Toulouse, France, but it has since sold six, amid the regulatory delays, leaving three needed to gain its operating licence. In July, (CEA) provided Jetstar Hong Kong with a US$60 million loan to cover ongoing expenses, which did not change the ownership structure.

There is industry speculation that Jetstar Hong Kong will not receive a hearing on its licence to start operations until January at the earliest.

(QAN) (CEO), Alan Joyce recently deflected questions about whether there were any signs of a breakthrough with regulators on Jetstar Hong Kong, noting (QAN) was only a minority shareholder. "[Chairman Pansy Ho] is leading the charge at getting the approvals and she continues to be optimistic about getting there, and I think any other questions on this should be directed to Jetstar Hong Kong," he said.

Jetstar Hong Kong is the low-cost carrier (LCC), Jetstar (IMU)'s fourth Asian offshoot, with the others being Singapore's Jetstar Asia (JSA), Vietnam's Jetstar Pacific (PAH), and Jetstar Japan (JJP). (QAN) recently reported -AU$40 million in losses from Jetstar Asia (JSA) and -AU$70 million from the other Asian arms combined.

(QAN) has ruled out the possibility of setting up any new Jetstar arms while the parent company is focused on cutting -AU$2 billion of costs over the next three years.

Industry sources said (QAN) had sought a buyer for part of its Singapore arm, but had not found one that would agree to maintain the "Jetstar" branding.

In addition, (QAN) has put a high-profile bilateral alliance with Emirates (EAD) in place for traffic flows to and from Europe.

(QAN) executives say (QAN)’s traffic on connecting routes to Taipei has been growing, and offering direct service (via code sharing) will enhance this market.

(QAN) already serves Taipei by connecting with other carriers at three points on its network. It has a code share deal with partner, Jetstar Asia (JSA) via Singapore, and also interlines with Cathay (CAT) via Hong Kong and Shanghai.

(QAN) believes the direct route will particularly appeal to business (C) travelers who need to fly to one city and return via another (for example, flying into Taipei and returning to Australia from Singapore).

The other airline linking Taiwan and Australia directly is (EVA) Air, with a 3x-weekly flight between Taipei and Brisbane. (QAN) previously code shared with (EVA) on this service, but ended the arrangement in March 2013.

(LAN) Airlines of the (LATAM) Airlines Group and Qantas (QAN), both Oneworld (ONW) Alliance members, began code sharing flights from Santiago on (LAN) to cities in Australia: Melbourne, Brisbane, Adelaide, Canberra, Perth, Darwin, Hobart, and Alice Springs on August 9. Also from Auckland, New Zealand, roundtrip service to Melbourne, Brisbane, and Perth are available on Qantas (QAN) airplanes. For (QAN) passengers traveling to Chile, they can fly with (LAN) from Santiago to Antofagasta, La Serena, and Punta Arenas from August 5. They can also fly from Santiago to Lima, Peru beginning August 20 and to São Paulo and Rio de Janeiro, Brazil on round trip flights starting October 8.

Qantas (QAN) domestic has recorded the best on time performance in departures and arrivals for every month for the financial year 2013/14, ahead of any other major domestic airline. (QAN) domestic on-time arrivals for financial year 2013/14 was +4.7% above its nearest rival equating to over >5,000 more on-time flights for its customers. (QAN) also experienced the least amount of cancellations.

(QAN) saw success on its key east-west routes (Sydney - Perth, Melbourne - Perth, and Brisbane - Perth routes), achieving a result of 84.0% in departure performance and 84.1% in arrival performance, compared to the nearest competitor 82.9% and 81.2%.

The same leading trend occurred on competitive east coast services between Sydney, Melbourne and Brisbane as (QAN) led with 86.4% in departures and 82.8% in arrivals to the nearest competitor's 83.3%t and 78.7%.

Qantas (QAN) will be able to significantly broaden its network offering in Canada thanks to a new code share agreement with Calgary-based low cost carrier (LCC) WestJet Airlines (WJI).

The code share, due to take affect from October 15, represents the latest step in (QAN)'s drive to strengthen its reach through partnerships with other carriers. While (QAN) does not serve any Canadian points, it will connect with the (WJI) network at USA gateways. The deal is not reciprocal, so (WJI) will not be placing its code on any (QAN) flights.

(QAN) already offers some Canadian destinations through code shares with American Airlines (AAL) and Alaska Airlines (ASA), but the WestJet (WJI) agreement gives it far more access. While (QAN) does code share with low-cost carriers (LCC)s in other regions, it stresses that (WJI) is a hybrid carrier, that appeals to both premium and leisure customers.

Under the code share, (QAN) will link with (WJI) flights in Honolulu and Los Angeles. Covered under the deal are (WJI)’s routes from Honolulu to Vancouver, and from Los Angeles to Edmonton and Calgary. Beyond these three points, flights to 17 other destinations are included, which would be two-stop flights for (QAN) passengers.

(QAN) flies its own airplanes to Los Angeles, Dallas/Fort Worth and New York Kennedy airports, and at all three points, it connects to American Airlines (AAL)’s Canadian flights. (AAL) and (QAN) are Oneworld (ONW) global alliance partners.

(QAN) connects to Alaska Airlines (ASA) flights via Los Angeles.

Qantas (QAN) was recently approved by the Civil Aviation Safety Authority (CASA) to revise its personal electronic device (PED) policy. (QAN) now allows passengers to use their personal electronic devices (PED)s such as smartphones, tablets and music players in flight mode for the duration of each flight.

(QAN) is approaching the final stage of the phase-out of its long-serving Boeing 767 fleet, which is a major plank of its broader plan to increase fleet efficiency and reduce operating costs.

(QAN) is now down to eight 767-300ERs in its passenger fleet after one was retired from service this month. The last international 767 flight occurred September 13, and the final domestic flight is scheduled for December 27. This aligns with (QAN)’s aim of retiring all of the 767s by year-end.

(QAN) accelerated the retirement schedule of the 767s as part of its company-wide -A$2 billion/-$1.8 billion cost-cutting initiative. The 767s are being replaced by newer Airbus A330s that are being transferred from Jetstar (IMU) as the low-cost carrier (LCC) takes delivery of 787-8s.

By December, the 767s will be mainly used on trunk routes from Sydney to Melbourne and Brisbane, as well as Melbourne - Brisbane and Brisbane - Darwin. The final domestic flight will be on the Sydney - Melbourne route. The A330s will generally take over on these routes as the 767s leave.

In addition to the passenger versions, (QAN) still has a single 767-300F freighter. (QAN) has no plans to retire the freighter.
(QAN) owns the 767-300ERs, which had their first delivery on August 30, 1988. (QAN)’s intention has been to sell the airplanes to other carriers or leasing companies as they are retired.

While (QAN) does not provide details of who acquires the airplanes that are sold, some are known to have been bought by Canadian carrier WestJet (WJI).

September 2014: Qantas (QAN) has put the world's biggest passenger jet airplane on the world's longest airline route. A (QAN) A380 with 484 passengers on board touched down September 29th at Dallas-Fort Worth International Airport, about 15 hours after leaving Sydney, Australia on the 8,578 mile journey. (QAN) is now operating this route 6x weekly.

See video - "QAN 767 Female Flight Crew plus Airplane Graveyard."

October 2014: News Item A-1: Qantas (QAN)'s (CEO), Alan Joyce said (QAN) expects to post a pre-tax profit in the three months to September following a record net loss, and was on track to complete its major cost-cutting program. Speaking at (QAN)'s annual meeting in Melbourne, he said preliminary figures showed (QAN) had made an underlying profit before tax for the first-quarter of the 2015 financial year.

"In four months we expect to deliver a first half-profit for 2015," he said, reaffirming earlier guidance. "By the end of June next year, we will have completed 80% of our (-5,000) announced job reductions. And by the end of June, we also expect to have paid down AU$1 billion/US $880 million worth of debt, significantly de-leveraging the balance sheet."

The projected return to profitability followed (QAN)'s record annual net loss of -AU$2.84 billion for the 2014 financial year, driven by restructuring costs and a writedown of its aging international fleet.
It reported an underlying annual loss before tax of -AU$646 million.

(QAN) has embarked on a AU$2 billion transformation program, with Chairman, Leigh Clifford saying that "there can be no let up or slow-down in this process."

Joyce said (QAN) was benefiting from the weaker Australian dollar (which hit a four-year low in early October) and falling oil prices, even as domestic demand remained weak. He said domestic market capacity growth, which was earlier projected to be about +1.0%, was expected to be flat for the first-half, as a brutal battle with rival Virgin Australia (VOZ) eases.

Clifford told shareholders, the immediate outlook for (QAN) was mixed, as the Australian economy transitions away from mining-led growth. "There is still a general cautiousness among consumers that is affecting all sectors of the Australian economy," he said. "Government traffic has been weaker, as a result of the tighter fiscal environment." He said the recovery in earnings from the domestic business would be driven by cost reductions in the short-term.

Several (QAN) employees who are also shareholders, challenged the board's transformation strategy at the annual meeting, with a member of the ground staff telling the board that morale was low.

(QAN)'s woes has also attracted criticism from the Transport Workers' Union, which said that management needed to "stop waging war on its workforce and instead engage with them to turn the airline around."

News Item A-2: Qantas (QAN) customers are set to enjoy a new standard of luxury on international flights to Asia, Hawaii and key domestic routes, with (QAN) unveiling the final design of new Business Suites to feature on its A330 fleet, to be progressively introduced from later this year - - SEE ATTACHED - - "QAN-2014-10 - A330 BUSINESS SUITE & ECONOMY SEAT."

Designed in collaboration with Marc Newson, the new Business Suite will be available on all 28 of (QAN)'s A330 airplanes, offering the world's first seats to allow customers to recline in their seat from take-off through to landing.* The Suites also offer fully-flat beds and direct aisle access for every Business (C) Class passenger in a 1-2-1 layout.

The Vantage XL seat, manufactured by Thompson Aero Seating, was developed and customised extensively by (QAN) after ergonomic trials and in-flight monitoring with a panel of experts and ongoing feedback from customers.

Qantas Group (CEO), Alan Joyce said (QAN) was excited to unveil the Business (C) Suite, which would redefine the in-flight experience for customers travelling on more than >15 international and domestic routes. "We believe this product will deliver the best travel experience between Australia and Asia, and probably the best domestic travel experience anywhere in the world. We can't wait for our customers to experience it for themselves," said Mr Joyce.

"We've listened to what matters most to our customers and done extensive ergonomic trials to deliver the highest levels of comfort, privacy and intuitive design. There's enough space to eat while continuing to work, which is something our business customers said was very important to them, and plenty of storage room to keep the range of electronic devices that people now travel with."

"A key point of difference from all other carriers is that the seat can be in recline and fitted with the mattress from take-off right through to landing. With many Business passengers enjoying a meal in the lounge prior to travelling, this means more time to rest and sleep," he added.

(QAN) Creative Designer, Marc Newson, said that intelligent design and functionality were the guiding principles behind the new A330 Business Suites. "The design was based on a real understanding of what (QAN) customers needed on longer domestic flights and overnight international flights from Asia, with practicality, comfort, privacy and style in mind to create a relaxing environment to work, dine or sleep," said Mr Newson.

The Economy (Y) cabins on all international A330s will be fitted with a next-generation model of the award-winning Recaro seat, an earlier version of which has been extremely popular with (QAN) customers on the A380 and refurbished 747 airplanes. Economy (Y) seats on the A330-200s for (QAN) Domestic will also be refreshed.

Customers in both cabins on the international A330 airplanes will be able to enjoy the latest Panasonic eX3 in-flight entertainment system, with larger seatback touchscreens in addition to "Q" Streaming technology, enabling them to stream content from an extensive entertainment library directly to their own devices.

Domestic Business (C) Class customers on A330 airplanes will also enjoy the same Panasonic eX3 system, while Economy (Y) customers will have an individual in-flight entertainment experience through either seatback touchscreens or devices provided by (QAN) in every seat.

The work to refresh the airplane interiors (which will take about one month for each) will start at Qantas' heavy maintenance facility in Brisbane next month. The first of the domestic refurbished A330 airplanes will take to the skies in late December from the east coast to Perth, and the first international A330 will commence flying in January 2015.

(QAN) announced the construction of a new Domestic Business Lounge in Perth due to open in the third quarter of 2015, which combined with the A330s will set a new benchmark in domestic travel for customers travelling from Perth, both on the ground and in the air.

International and domestic routes currently serviced by (QAN) A330s:
* Sydney - Melbourne
* Sydney - Brisbane
* Sydney/Melbourne/Brisbane to Perth
* Sydney/Melbourne/Brisbane to Singapore
* Melbourne/Brisbane to Hong Kong
* Sydney - Bangkok
* Sydney - Jakarta
* Sydney - Manila
* Sydney - Honolulu
* Sydney - Shanghai

^ Business Suites and Panasonic eX3 entertainment systems to be progressively introduced on A330 airplanes from December 2014.

November 2014: News Item A-1: China Eastern Airlines (CEA) will start a new joint venture (JV) with Qantas (QAN) on certain routes between China and Australia in an effort to boost passenger flow onto their respective international networks. This five-year joint agreement, which is subject to regulatory approval, will commence in mid-2015.

Both carriers are expected to conduct a closer cooperation on Shanghai - Sydney, Shanghai - Melbourne and Beijing - Nanjing - Sydney routes. The two carriers hope to ultimately open up new routes between Australia and mainland China, such as between Brisbane and Perth to Shanghai.

In addition, both carriers’ operations at Shanghai International Airport’s Terminal 1 will also be collocated, which will cut transit times by about an hour, open up a better range of onward connections and provide more choice for customers.

(QAN) noted the new (JV) will complement the (QAN) - Emirates (EAD) partnership for Europe, the Middle East and North Africa; and the (QAN) - American Airlines (AAL) partnership for the USA.

China is Australia’s most valuable inbound tourism market, which is projected to contribute up to $9 billion annually to the Australian economy by 2020.

News Item A-2: Qantas (QAN) has struck a setback in its attempt to impose an 18-month wage freeze on all employee groups, after its short-haul pilots (FC) rejected a new contract including this clause.

Of the 554 pilots (FC) that voted, 79% opposed (QAN)’s four-year contract offer. (QAN) short-haul pilots (FC) are represented by the Australian and International Pilots Association (AIPA).

(AIPA) has now begun surveying members to find out more details about why they rejected the contract. Survey results are expected by the end of the month, although they will not be made public. The union expects to return to negotiations with (QAN), with a view to modifying the proposal. However, no new negotiation dates have yet been set.

Contract talks between (AIPA) and (QAN) have been underway for about two years. The union opted to present the current airline proposal to members for a vote, although union leadership was seen to be lukewarm at best regarding the terms. (AIPA) did not make a recommendation on the contract’s rejection or acceptance.

(QAN) wants to implement a similar wage freeze (and subsequent pay rises) across all of its employee units. Engineers (MT) and pilots (FC) for subsidiary, Jetstar (IMU) have already accepted contracts that include such terms.

Since the short-haul pilot (FC) contract has been open for two years, the company considers the wage freeze to have already occurred. However, that would mean no retroactive pay increase.

(QAN) is proposing an increase of +3% from when the deal is signed, followed by +3% annual increases for the first three years and +1.5% for the fourth. Sources say it is far from clear whether the wage freeze/retroactive pay issue was the main sticking point for pilots (FC).

In a statement provided to media, (QAN) said it is “disappointed with the result” of the ballot, and described the terms as “fair and reasonable.”

(QAN) is unlikely to cede much ground on the wage terms. “Given the current environment and the challenges we face, this is the best deal we can realistically offer,” (QAN) said. “We have made it clear that all employees covered by enterprise agreements would be subject to an 18-month pay freeze as we deliver on our A$2 billion/$1.7 billion transformation program.”

News Item A-3: Qantas (QAN) 737-838(VH-XZP, "JAMES STRONG") delivery in retro livery of 1970s bearing the name of trailblazing former (QAN) (CEO) James Strong (1993 - 2001). This is (QAN)'s 75th 737-800 and this month is (QAN)'s 94th birthday - - The Queensland & Northern Territory Aerial Services Limited (QANTAS) was registered as a business on November 16th, 1920!

December 2014: News Item A-1: The Qantas Group said it expects to report an underlying profit before tax (PBT) in the range of +AUD300 million/+$248.5 million to +AUD350 million for the 1st 6 months of (FY) 2015, reversing a loss of -AUD252 million reported for the year-ago period.

All operating segments of the Qantas Group are expected to be profitable for the half-year ending December 31, 2014 at underlying earnings before interest and tax level.

(QAN) attributed the strong turnaround in the Group’s financial performance to rapid progress with the $2 billion accelerated (QAN) “Transformation” program initiated 12 months ago. It said that, to date, all targets under the program had been either met or exceeded.

After realizing +AUD204 million in Qantas Transformation benefits in the 2nd half of (FY) 2014, the Group is on track to realize at least +AUD350 million in further benefits in the 1st half of (FY) 2015.

In addition, lower Australian dollar fuel prices are expected to generate (1H) savings of up to -AUD30 million.

(QAN) (CEO) Alan Joyce said: “(QAN) is set to report its best 1st-half result since 2010. This demonstrates that the strategy we have outlined to transform our business is working. This is an improvement of >+AUD550 million compared with the 1st half last year, with "Qantas Transformation" being the primary driver of the turnaround. (QAN) is 12 months into a 3-and-a-half year program, but these strong early results give us the confidence that we will continue to meet all the targets we have set. We are committed to completing the full, $2 billion program to ensure a sustainable, competitive position for the long term.”

(QAN) is due to report its 1st-half results for (FY) 2015 in late February 2015.

News Item A-2: American Airlines (AAL) and Qantas (QAN) have expanded code sharing, allowing (QAN) codes on nine (AAL) services: Los Angeles (LAX) - Lihue, (LAX) - Kona, (LAX) - Maui, (LAX) - (ATL), (LAX) - San Antonio, (LAX) - Tampa, Dallas/Ft Worth - Richmond, (DFW) - Tucson, (DFW) - Albuquerque.

News Item A-3: Qantas (QAN) will begin direct flights from Brisbane to Tokyo's Narita Airport from August next year as part of (QAN)'s expansion of services into Japan. This new direct service will operate four times a week and complement a new direct daily, Sydney - Haneda service.

(QAN) will also fly to Narita on three alternate days from another Australian port, which will be finalized shortly, meaning (QAN) will offer double daily services to Japan.

In total, (QAN) will add >4,000 seats per week across 14 return flights between Australia and Japan on a combination of 747 (to Haneda) and A330 (to Narita) services.

The announcement was made at (QAN)'s Brisbane Heavy Maintenance Facility where Qantas Group (CEO) Alan Joyce and Queensland Premier, Campbell Newman inspected work on the 1st of 28 Airbus A330s to be fitted with new class-leading interiors.

It follows (QAN)'s recent confirmation that it had obtained peak time slots to operate daily services to Tokyo's Haneda Airport in addition to its existing slots to Narita. The extra capacity comes as departures from Australia to Japan have grown +17% in the past year.
The extra flying time has been made possible through improved airplane utilization.

Mr Joyce said the new direct service from Brisbane to Japan was a coup for Australian travelers as well as for the local economy. "We are delighted to offer (QAN) customers a choice of 4x-weekly services from Brisbane to Tokyo beginning in August next year," Mr Joyce said.

"This is great news for Brisbane customers wanting to visit Japan but it's also great news for tourism, because it makes Queensland even more accessible to Japanese travelers. We expect the Sydney to Haneda services to be particularly popular with business travellers, and this traffic is likely to keep growing off the back of the Free Trade Agreement between Australia and Japan."

"Combined with Jetstar (IMU) flights from Cairns and the Gold Coast into Japan, the services the Qantas Group offers, put us in a very strong position when it comes to both leisure and premium travel to the world's 3rd largest economy."

Mr Joyce said the A330s flying to Narita will be among those gradually refurbished with all new lie-flat Business Suites, upgraded Economy seating and new in-flight entertainment.

"We're proud to be doing work on our A330s in Brisbane, where we have >200 engineers and support staff working for 30 days on each airplane to install 250,000 individual parts," he said. "When this project is finished by the end of 2016, we believe these airplanes will offer the best travel experience between Australia and Asia, and the best domestic travel experience anywhere in the world."

The 1st of (QAN)'s newly refurbished A330 airplanes will start flying domestically in late December, with the 1st route to be Sydney to Perth. The 1st international reconfigured airplane due to enter service in mid-January on the Melbourne to Singapore route. More than half of the A330 fleet is expected to be refurbished by the end of December 2015.

Fares for the new Brisbane - Narita service and Sydney - Haneda service will be available for sale progressively from later this week, for travel from August 2, 2015 and July 31, 2015 respectively.

To celebrate the launch of non-stop services between Brisbane and Narita, (QAN) will be offering sale fares starting from AU$899 return from December 12 to 22, 2014 for travel from August 1, 2015.

News Item A-4: Qantas (QAN) has revised roles of executive team members Andrew David (to (CEO) Domestic), Gareth Evans (to (CEO) International & Freight), John Gissing (to Group Executive Airlines & Services), Robert Marcolina (to Group Executive Strategy, Transformation & Information Technology (IT), and Tino La Spina (to Group (CFO)).

News Item A-5: Boeing (TBC) delivered a 787-8 Dreamliner to Qantas (QAN).

February 2015: The Qantas Group reported an underlying profit before tax of +A$367 million/+$288.3 million for the 6 months ended December 31, 2014, reversing an underlying loss before tax of -A$252 million in the prior-year period.

In the 1st half of its July 1 - June 30 fiscal year, Qantas’ (QAN)'s revenue increased +2% year-over-year to A$8.07 billion, while expenses lowered -6% to A$7.57 billion, producing a fiscal-year 2015 1st-half operating profit of +A$500 million, reversing a -A$156 million operating loss for the 6 months ended December 31, 2013.

The results were welcome news for (QAN) after incurring its worst-ever full-year loss for the 2014 fiscal year ended June 30, 2014.

(QAN) (CEO) Alan Joyce noted the profit in the company’s fiscal year 1st-half was “our best half-year result in 4 years” and credited the “Qantas Transformation” program launched a year ago that is “reducing costs permanently.” He added, “Our financial position is significantly stronger.”

The Qantas Group’s traffic for the 2015 fiscal year 1st-half increased +2% year-over-year to 57.58 billion (RPK)s on flat capacity of 71.94 billion (ASK)s, producing a load factor of 80% LF, up +1.5 points. Yield improved +1% to A$0.103.

Qantas (QAN) said that “overall demand is stable” and “yield and load factors have stabilized and are in the early stages of recovery.” It said capacity across the Qantas Group will rise +1.5% to +2% year-over-year in the second half of the fiscal year and “all operating segments are expected to be profitable in the [full] financial year.”

However, it said no profit guidance could be provided “due to the high degree of volatility and uncertainty in global economic conditions, fuel prices and foreign exchange rates.”

March 2015: Qantas (QAN)’s 1st Boeing 747-400 was retired after completing 13,833 flights >25.3 years in service. (VH-OJA) was named the "City of Canberra" and was delivered to (QAN) on August 11, 1989. On August 17, Flight QF7441 London - Sydney set the record for the longest nonstop flight of any commercial airline.

The 747 logged 106,154 flight hours and flew 85 million km.

The 747-438 will reside in its new home at the Historical Restoration Society in New South Wales. It is shown landing at Illawarra Regional Airport in New South Wales to an adoring crowd. It will join a Lockheed Super Constellation, Catalina, Douglas DC-3 and DC-4 and a "Desert Storm" US Army Cobra.

(QAN) renamed all of its 747-400s "Longreach" as a symbol of its place of origin and as a tribute to the long-range of the airplane.

April 2015: Qantas (QAN) will relaunch 5x-weekly services between Perth and Singapore, despite axing a similar service a year ago.

The resumed service will replace the almost identical schedule canceled in March 2014 due to what (QAN) called “underperformance and a level of competition that has intensified, driving down yields.” The route will now use single-aisle 737-800s instead of the previously flown twin-aisle A330s, and will start operations from June 26.

Qantas International (CEO) Gareth Evans said (QAN) had been able to “match the right airplane on the right route, and match schedules with customer demand,” to enable the re-implementation decision.

However, some sources are questioning whether the move came as a result of incentives (either from West Australia or Singapore) to reinstate the route.

Currently, the only full-service international offerings out of Perth, apart from Singapore Airlines (SIA), are Malaysia Airlines (MAS) and (QAN) partner, Emirates (EAD).

(EAD) currently offers a direct Perth - Dubai schedule that bypasses Singapore, and (MAS) flies out of Kuala Lumpur.

June 2015: News Item A-1: Qantas (QAN) commenced domestic flights to Hamilton Island (HTI) from Melbourne (MEL), regional flights to Singapore (SIN) from Perth (PER) and long-haul flights to Vancouver (YVR) from Sydney (SYD). The domestic sector was started on June 27, and will operate 2x-weekly (Saturdays and Sundays) with (QAN)’s 737-800s. Virgin Australia Airlines (VOZ) already flies on the 1,965 km city pair, on a 5x-times weekly basis. The regional route began on June 26, and will fly 5x-times weekly, again utilizing (QAN)’s 737-800 fleet. Competition will be tougher on this airport pair, with Singapore Airlines (SIA) (28x-weekly), Jetstar Asia (PAH) (12x-) and Scoot (SCT) (7x-) being the incumbents. Finally, the seasonal long-haul route commenced on June 20th, and operates 3x-weekly with (QAN)’s 364-seat 747-400s until mid-July, before returning later in December. Air Canada (ACN) offers a daily connection on this 12,493 km airport pair.

News Item A-2: "American Airlines (AAL), Qantas (QAN) Step Up Partnership with New Transpacific Routes" by (ATW) Editor, Karen Walker, June 9th, 2015.

American Airlines (AAL) and Qantas Airways (QAN) are expanding their joint business by adding new service between the USA and Australia.
(AAL) will begin operating a daily, nonstop flight between Los Angeles and Sydney from December 17, while (QAN) will begin Sydney to San Francisco from December 20.

Services will initially operate on peak days and ramp up to 6x-weekly in January 2016. The 2 Oneworld (ONW) Alliance airlines said their closer and more integrated relationship also provides opportunities for future growth in the transpacific markets not currently served by either airline, such as New Zealand.

(AAL)’s new service between Los Angeles and Sydney will be operated with 3-class Boeing 777-300ERs.

(QAN) will operate its service between Sydney and San Francisco with a reconfigured Boeing 747-400 fitted with the same style interiors found on its Airbus A380 airplanes.

(AAL) Chairman & (CEO) Doug Parker and (QAN) (CEO) Alan Joyce both talked at the press conference of further growing their business relationship, although Joyce joked, “I am not sure that we can have a striped kangaroo.”

But Joyce said the USA market was (QAN)’s largest international market with some 40% of its overseas business invested there. “We could not have such a large network in the USA without American,” he said. “With this partnership, anything is possible.”

Joyce also noted that the strong relationship with (AAL) did not affect (QAN)’s partnership with Emirates (EAD), even though (AAL) is one of the USA carriers involved in the alleged subsidy fight against the Gulf carriers. He said (EAD) had significantly enhanced (QAN)’s reach into Europe. “We have great relationships with both (EAD) and (AAL) and that will continue,” Joyce said.

News Item A-3: JetBlue Airways (JBL) is urging the USA Department of Transportation to only approve expansion of the Qantas (QAN) - American Airlines (AAL) joint venture (JV) with conditions.

July 2015: News Item A-1: News Item A-1: All Nippon Airways (ANA) plans to launch daily flights between Tokyo Haneda and Sydney from December 11, subject to government approval.

Japan Airlines (JAL) and Qantas (QAN) currently operate flights between Tokyo Narita and Sydney, but (QAN) plans to switch its Sydney - Tokyo service to Haneda from August 1. The (ANA) flights will be operated with a Boeing 787-9 configured with 146Y economy-class seats, 21PY premium economy seats and 48C lie-flat business-class seats. (QAN) will operate a Boeing 747-400 on the route.

(ANA) said, “Flights to Sydney will depart Haneda late at night and return flights will arrive at Haneda early in the morning, allowing passengers the opportunity to transit to a number of Japanese destinations by midday.”

News Item A-2: Qantas Airways (QAN) will cancel 1 weekly frequency on the Sydney - Johannesburg route from February 3. (QAN) said this will leave it with 6x-weekly frequencies on the route, which is operated using 747-400s.

(QAN) is the only carrier on the route. The only other operator that flies between Australia and South Africa is South African Airways (SAA), which operates a daily service between Johannesburg and Perth.

News Item A-3: (QAN) will fly 13x-weekly, Sydney - Vancouver service this summer and 20x-weekly flights from mid-December - January.

News Item A-4: "Qantas (QAN), American (AAL) Joint Venture (JV) gets Tentative (ACCC) Nod" by ch-aviation, July 10, 2015.

Australia’s competition watchdog has granted interim approval for an expanded partnership between Qantas (QAN) and American Airlines (AAL), clearing the way for the carriers to market proposed new transpacific routes.

Under the terms of their joint venture (JV) which will now shift to a Route revenue-sharing agreement, (AAL) will launch a direct 777-300ER Los Angeles International - Sydney Kingford Smith service on December 19 replacing 4 of (QAN)’s 747 Sydney - Los Angeles weekly services and one (QAN) 747 Melbourne - Los Angeles service per week. For its part, (QAN), following a 4 year absence, will resume its Sydney - San Francisco, California route using a 747-400 effective December 20.

“The (ACCC) considers that granting interim authorisation is likely to lead to additional capacity on the Sydney Kingford Smith to Los Angeles International route, and increased capacity and competition on the Sydney to San Francisco route,” (ACCC) Commissioner, Dr Jill Walker said. “This is likely to result in benefits to passengers that wish to use these services. Further, granting interim authorisation is unlikely to have any permanent impact on the market that could not be reversed in the event final authorization is not granted.”

The airlines will now finalize their flight schedules with the aim of selling tickets by the end of this month. However, the application has not been smooth sailing with New Zealand's Air New Zealand (ANZ), and USA carrier, Hawaiian Airlines (HWI) both objecting to the partnership's renewal.

Aside from claims that neither (QAN) nor (AAL) have provided compelling evidence that the enhanced partnership will not cause competitive harm, (ANZ) has argued that interim authorization is 'neither necessary nor required urgently' as both (QAN) and (AAL) already cooperate on the Sydney - Los Angeles route under their existing authorization. It further adds that (QAN) could resume the Sydney - San Francisco route in its own right or with more limited code share arrangements until authorisation for deeper cooperation is obtained.

In response, (QAN) and (AAL) have countered that their (JV) will not cause competitive harm, 'given the intensity of competition on the trans-Pacific routes.' They argue that interim authorization is both 'necessary and entirely appropriate' in the circumstances as it would enable the continuation of existing conduct, whilst the substantive application is assessed. Finally, they refuted (ANZ)'s suggestion that (QAN) could launch it own Sydney - San Francisco route on the grounds that such separate services would not be 'commercially feasible' to launch, given that they manage Trans-Pacific Routes as a whole rather than on a route-by-route basis.

In all, the (ACCC) ruled that on the basis of its preliminary consideration, the extent of any public detriments would likely to be limited by competition from other airlines operating in the trans-Pacific market, which include United Airlines (UAL), (ANZ), and (DAL) and Virgin Australia (VOZ). (DAL) and (VAA) recently secured provisional (ACCC) approval to extend their existing trans-Pacific partnership by five years.

News Item A-5: Qantas (QAN) will be able to launch more full-service flights in its domestic network later this year due to increased fleet efficiency and the addition of more Boeing 717s.

(QAN) plans to resume Sydney - Maroochydore 717 service and introduce a Melbourne - Gold Coast route with Boeing 737s. These flights will be in addition to services already offered on these routes by low-cost (LCC) subsidiary, Jetstar (IMU). From February, (QAN) will add more capacity to its Sydney - Gold Coast and Tasmanian markets.

(QAN) is leasing +2 717s that are due to arrive early next year, increasing its fleet to 20. A reduction in turnaround times in the domestic 737 fleet has also freed up more capacity.

It will begin daily, Melbourne - Gold Coast service October 25, and 6x-weekly, Sydney - Maroochydore flights from December 21.

(QAN) says that offering both full-service and (LCC) flights on the same route is an example of its dual brand strategy. Jetstar (IMU) will cater to leisure travelers, and (QAN) will target premium and business traffic.

(QAN) regularly reviews its network to make sure the routes are matched to the appropriate carrier. Last month, (QAN) began operating full-service flights between Melbourne and Hamilton Island, which allowed Jetstar (IMU)to exit the route and add new services elsewhere.

News Item A-6: The Royal Australian Air Force (RAA) will acquire 2 A330-200s from Qantas (QAN) later this year ahead of their conversion into KC-30A Multi-Role Tanker Transport aircraft at Airbus Defence and Space’s Madrid Getafe, Spain facility. The jets A330-202 (892, VH-EBH & 898, VJ-EBI) are currently leased from (CIT) Aerospace (TCI).
"The 2 additional KC-30A aircraft will be delivered in 2018 and provide a substantial increase to the air-to-air refuelling capacity of the (RAAF)," the Australian Department of Defence said. “The (RAAF) decided to use these particular aircraft as they are extremely close to the same basic specification as the KC-30As already in service.” Once conversion is complete, the 2 aircraft will join the (RAAF)'s existing fleet of 5 A330 (MRTT)s.

August 2015: News Item A-1: "Qantas (QAN) Sees Dramatic $1.6 Billion Turnaround; 787 Order Firmed" by (ATW) Jeremy Torr, August 21, 2015.

Australian flag carrier, Qantas (QAN) reported an annual gross income for (FY) 2015 of +A$975 million/+$711 million7, a dramatic A$1.6 billion reversal from its -A$646 million loss in the year-ago period. (QAN) said the results were due to good progress with its "Transformation Program," which saw A$894 million in savings during the year through cost cutting and redundancies, and saw (QAN) pay down >A$1 billion in debt. “We reshaped our business for a strong, sustainable future because we moved quickly and made tough decisions early,” said (CEO) Alan Joyce.

Revenue rose across all sectors, with (QAN) Domestic seeing income of +A$480 million compared with +A$30 million in financial year 2014, and Qantas International seeing income of +A$267 million this year, compared with a loss of -A$497 million in 2014.

In both sectors, (QAN) reported a drop in costs of -4% year-on-year, with a rise of +4.5% in (RASK) on domestic seats and a +6% (RASK) rise on international seats.

(QAN) also benefitted from a major drop of -A$500 million in fuel costs, the sale of part of its Sydney Airport holdings, and a cut in Australian government’s carbon tax to A$120 million. “We are halfway through the biggest and fastest transformation in our history,” said Joyce.

(QAN) has also confirmed orders for 8 787-9s worth some $2 billion, to be delivered from 2017 to replace (QAN)’s fleet of 5 Boeing 747s.

The order, valued at around $2 billion at current prices, will see (QAN) take delivery of the 1st 787-9 mid-2017 with +3 airplanes due for delivery that year, and the remainder over the next 2 years.

The order follows a new wage agreement with pilots (FC) over crewing requirements on the new airplane.

The 1st deliveries will see the remaining 3 of (QAN) subsidiary, Jetstar (IMU)’s 787-8s converted to the new 787-9 order, and the remainder for (QAN) use. All will be powered by the (GEnx-1B) powerplant, worth >$400 million at list prices.

(QAN) originally ordered 35 787-8s in 2012, but canceled its order in 2012 following a massive loss. Including options, (QAN)’s revised Boeing order for all 787 option variants now stands at 30 airplanes.

Joyce said the 787s would help unlock new opportunities for (QAN).

“When our 787 Dreamliners start arriving in 2 years’ time, their incredible range and fuel-efficiency will create new possibilities for our network,” he said. “We need to keep evolving and transforming to shape a truly sustainable future, but our people should take great satisfaction in what we are achieving.”

News Item A-2: Qantas (QAN) made the switch of its Sydney (SYD) to Tokyo service on July 31, with daily operations to Haneda (HND) replacing the previously flown sector to Narita. The 7,812 km service will continue to be operated by (QAN)’s 747-400 fleet, and will face no direct competition, however, Japan Airlines (JAL) will provide indirect competition on the Narita to Sydney airport pair, with its daily 777-200 operation. The following day, presumably utilizing the slots freed up from the Sydney service switch, (QAN) began daily A330-300 flights from Brisbane (BNE) to Narita (NRT). The 7,142 km sector will face no direct competition. In honor of the 1st direct full service flight to Japan from Brisbane since 2010, the airport (BAC) created a Japanese inspired area featuring a traditional Zen garden with Torri gate entrance, a wishing wall, origami table, temple statues, lanterns and bamboo screening for travelers to enjoy. The daily services will provide 62,000 seats per year (both directions), creating a critical connection between Queensland and Japan.

News Item A-3: Australia’s Competition & Consumer Commission (ACCC) has dropped its previous opposition against China Eastern (CEA)’s planned alliance with Qantas (QAN), giving the carriers the green light to coordinate pricing and scheduling.

In March, the Australian regulator issued a draft determination intended to block the proposed alliance between (CEA) and (QAN), noting that both carriers would benefit from “an increased ability and incentive to limit capacity and/or increase airfares on the Sydney - Shanghai route.”

But the regulator said August 21 that (CEA) had agreed to increase frequencies on its Australia - China services and to introduce a new route if the deal was allowed. (CEA) proposed in June that it would launch an extra 3x-weekly service on Sydney - Shanghai and Melbourne - Shanghai routes from September, before changing into a double-daily schedule on both city pairs by November.

Meantime, both carriers noted that they will significantly expand the range of destinations covered by their existing code share deal. The 2 airlines already have a reciprocal code share agreement on 17 flights a week between Australia and China’s mainland in addition to a number of onward domestic destinations in both countries.

(ACCC) Chairman, Rod Sims said the regulator had imposed conditions requiring the 2 airlines to boost their capacity between Australia and (CEA)'s hub in Shanghai by +21% over the 5-year term of their approval. The regulator will also require the 2 carriers to report their average fares, month by month, on each route between Australia and China, on which they fly.

(CEA) is a SkyTeam (STM) Alliance member, while (QAN) belongs to the Oneworld (ONW) Alliance.

News Item A-4: Qantas (QAN) Group (CEO) Alan Joyce said his firm has written off its investment in failed start-up Jetstar Hong Kong (Hong Kong Chek Lap Kok). Speaking in Sydney during the Group's Financial Year 2014/2015 results, Joyce confirmed no further investments would e made. The announcement comes after fellow Jetstar Hong Kong shareholder China Eastern Airlines (CEA) said it would discuss winding up the project with fellow investors in the coming weeks.

A joint-venture (JV) between Qantas (QAN), China Eastern (CEA), and Hong Kong-based property and transportation conglomerate, Shun Tak Holdings, Jetstar Hong Kong had, at one point, held 9 A320s in anticipation of launching services in early 2014. However, a protracted certification and licensing process forced (QAN) to sell off the majority of the fleet.

Its bid to secure an Air Services Licence (ASL) eventually flopped in June, when the the Hong Kong Air Transport Licensing Authority (ATLA) ruled the start-up's Principal Place of Business (PPB) did not conform to local laws which require it to be in Hong Kong.

News Item A-5: "Top 10 Premium Economy Classes 2015" by AIRWAYS publication placed Qantas in 1st place - - see attached "QAN-2015-08 - Top 10 Premium Economy Classes 2015."

News Item A-6: Qantas (QAN) signed a letter of intent to buy 8 787-9 Dreamliners, Boeing (TBC) announced on August 19. The 787-9s will be powered by the (GEnx-1B) powerplant in an engine order valued at >$400 million list prices. Deliveries will begin in 2017.

September 2015: News Item A-1: Australian flag carrier Qantas (QAN) has been given permission to operate between secondary markets in Australia and China, opening the way for a proposed Jetstar (IMU) service from leisure destination Gold Coast to China’s Wuhan.

News Item A-2: See photo - "QAN-2015-09 - TOP 10 2015.jpg."

October 2015: News Item A-1: Qantas (QAN) is considering nonstop Perth - London Boeing 787-9 services, (CEO) Alan Joyce said. (QAN) has recently confirmed orders for 8 Boeing 787-9 airplanes worth some $2 billion, to be delivered from 2017, operating on routes from Australia like to North and South America, as well as to South Africa. “The 787-9 has the range to operate such a route,” Joyce said. “This opens up direct service from Australia to Europe for the 1st time.

ews Item A-2: The Qantas (QAN) "Transformation Program" (which should be completed in 18 months) is making operations across every division “incredibly efficient,” (QAN) (CEO) Alan Joyce said.

December 2015: News Item A-1: Qantas (QAN) added 2 routes into New Zealand from Brisbane (BNE), as it launched direct seasonal services to Wellington (WLG) and Christchurch (CHC). While the former, served 3x-weekly, began on December 4, the latter route, operated 4x-weekly, commenced the day before. (QAN) had served the Brisbane to Christchurch sector in the past, with services being suspended in 2005.

Qantas (QAN) returned to San Francisco (SFO) on December 18, commencing non-stop services from Sydney (SYD) to its network again. (QAN) will operate select flights through December and January, with 6x-weekly beginning in February. All flights will operate using 747-400s. United Airlines (UAL) will provide competition on the 11,943 km sector, offering a daily service. (QAN) also commenced domestic services from its main hub airport to the Sunshine Coast (MCY) on December 21. Operating 5x-weekly with (QAN)’s 717 fleet, the 835 km sector will face stiff competition from the route’s incumbents (Jetstar Airways (IMU) (31x-weekly) and Virgin Australia Airlines (VOZ) (9x-weekly).

See photos - "QAN-2015-12 - Sydney to SFO-A/B.jpg"

News Item A-2: Canada and Australia are doubling the number of seats airlines can fly per week between the 2 countries under an expanded air transport agreement, effective immediately, the Canadian government has said.

With the new deal, airlines from Canada and Australia each have been allotted 6,000 weekly seats for flights between Sydney, Melbourne, Brisbane, and Perth, plus Canada’s international gateways. By December 2016, Canada said, airlines from each country will be able to fly 9,000 weekly seats between Australia and Canada.

Also as part of the updated agreement, Canada and Australia have agreed to void “a number of regulatory requirements” regarding pricing. Moreover, airlines from both countries will be able to fly an unlimited number of all-cargo operations.

In 2014, about 400,000 passengers traveled on direct flights between Canada and Australia. From Canada, only Air Canada (ACN) flies to Australia, with flights from Vancouver to Sydney and, starting next June, to Brisbane.

Qantas (QAN), meanwhile, is flying from Sydney to Vancouver for a short period this fall and winter, in part, to accommodate Australian ski tourists.

February 2016: News Item A-1: Qantas (QAN) achieved the best half-year result in the airline’s history with a net profit of +A$688 million/+$498 million for the 6 months through December 31, 2015, compared with a profit of +A$206 million a year earlier.

The group’s domestic, international and Jetstar (IMU) business units all saw significant improvements for the period, which was the carrier’s fiscal 1st-half. It was helped by a -7% reduction in unit costs, mainly due to lower fuel prices. (QAN) expects its fuel bill to be -A$600 million lower for the full fiscal year. Revenue was up +5% in the half.

(CEO) Alan Joyce cited further progress in (QAN)’s 3-year turnaround plan as being another major factor in the higher profit. (QAN) has realized A$1.4 billion in cumulative savings since 2014 from this plan. It has completed or identified 4,500 of the 5,000 layoffs that were targeted. However, (QAN) is also hiring in other areas, such a new campaign to add 170 pilots (FC) for its Boeing 787-9 fleet that will enter service in late 2017.

Further cost benefits from the turnaround plan will emerge this year, such as the closure of a Brisbane call center. This will leave (QAN) with one call center, down from 3 before the transformation plan was launched. A new revenue management system is also due to be rolled out this year.

(QAN) unveiled a plan to install high-speed Internet connectivity in its domestic Boeing 737 and Airbus A330 fleet, with a trial to begin this year and full roll out in 2017. (QAN) also announced it will build its 1st dedicated premium lounge at London Heathrow (LHR) Airport. Construction of the lounge in (LHR)’s Terminal 3 will begin in September, and it is due to open in early 2017.

Group capacity is expected to be up by +5% for the full fiscal year, which runs through June 30. For the 2nd half of the fiscal year, the parent carrier’s international capacity is forecast to increase by +9%, with Jetstar (IMU) international capacity rising +12%, and overall domestic capacity up +2%.

News Item A-2: "Qantas Hosts World's 1st Tech Talk in the Sky" by www,chinaaviation daily.com, February 17, 2016.

Passengers on (QAN) flight 73 departing from Sydney to San Francisco February 17, experienced the world's 1st "tech talk in the sky."

"Ideas That Travel" (a partnership with TEDxSydney) saw 4 of Australia's most exciting technology and science innovators share their vision for the future of technology and design in a series of talks held in the nose of (QAN)'s 747 during the 13 hour flight.

The talks were live-streamed to passengers via the in-flight entertainment system and were available online, following QF73's arrival into San Francisco. The series will also be screened during "TEDxSydney" on May 25, 2016.

Joining QF73 were a group of 10 Australian tech entrepreneurs and start-ups sourced by innovation hub, The York Butter Factory, and Australia's leading supplier diversity organisation, Supply Nation.

Qantas Group Executive Brand, Marketing, & Corporate Affairs Olivia Wirth said: "95 years ago, Qantas (QAN) was a start-up itself, and a large part of our success comes from the fact we have kept trying new ideas. So, we're delighted to be able to give these emerging thinkers a unique platform to tell their stories."

"This is the perfect route for a world-first. We all know about the impact of the California tech boom, but what's really exciting is the growing number of Australians doing business with Silicon Valley on the one hand, and building a home-grown Australian culture of entrepreneurialism on the other."

"One of the reasons we re-launched flights between Sydney and San Francisco was to support growing business travel driven by the tech boom, and we're looking forward to playing our part in strengthening the ties between innovators on both sides of the Pacific."

TEDxSydney Founder, Remo Giuffré said: "We are thrilled to be partnering with Qantas (QAN) on this exciting 'Ideas that Travel' adventure, celebrating the airline's San Francisco service connecting Australian and USA based entrepreneurs."

"Some of the most exciting speakers from TEDxSydney alumni shared their ideas at 30,000 feet, while members of our extended networks are anticipating some serious meeting and greeting in the Bay Area. We're all looking forward to hearing more about those experiences at TEDxSydney 2016 at the Opera House in May," said Mr Giuffré.

The group of Australian start-ups travelling on QF73 tour the world headquarters of tech giants Google, Twitter, Facebook, Khan Academy and Silicon Valley Bank, and participate in workshops at the Singularity University to help the businesses progress their business plans and explore new business opportunities on both sides of the Pacific.

During the trip, the startup group also donned Fitbits to trial the new Qantas Assure app, which goes live later this year (*). Australian Qantas Frequent Flyers who buy eligible insurance products from Qantas Assure and download the app will be able to earn Qantas Points for being active, which they can monitor through wearable technology.

(QAN)'s Sydney - San Francisco services operates 6 days per week, with flights operated by 747-400s with the same interiors that feature on (QAN)'s flagship A380s. The service re-started in December 2015.

(*) While not yet available for purchase, Qantas Assure will be a new insurance membership with its own wellness program. It will be available to Australian resident Qantas Frequent Flyers aged 13 years or over.

News Item A-3: ViaSat has signed a memorandum of understanding (MOU) with Qantas Airways (QAN) to bring the fastest and highest-quality in-flight internet connectivity to (QAN) passengers on domestic flights.

March 2016: "Australian Customs & Immigration Workers Begin Strikes"
by (ATW) Adrian Schofield, March 30, 2016.

Australia’s Customs & Immigration workers have launched strikes at Australian airports, following a postponement over the Easter travel period due to security concerns. A series of short strikes at major international gateways began March 30.

The Community & Public Sector Union had previously planned industrial action before and during Easter, including a 24-hour walkout at all international airports on March 24. However, the union heeded calls from Australian Prime Minister, Malcolm Turnbull to cancel the strikes over Easter, in order to boost airport security in the wake of the Brussels Airport bombing.

April 2016: See video on new Qantas (QAN) Crew Uniforms:

May 2016: News Item A-1: Australian flag carrier Qantas (QAN) will launch a new cargo subsidiary in July 2016, dedicated to serving the needs of Australia Post, the national postal service provider.

The new division has signed a 5-year AUD500 million/$378 million contract from Australia Post and its courier subsidiary, StarTrack, (QAN) said.

The Australia Post/StarTrack contract will last until mid-2020, and will see 3 of (QAN)’s existing BAe 146-300s, 2 of its 737-300s, and 1 737F freighter rebadged in StarTrack livery for the new venture. 1 extra 737-400 is also scheduled to be added to the cargo fleet in coming months.

“This strategic alliance creates a greater opportunity for us to be 1st to deliver for our customers, combining our delivery network with a dedicated and flexible air network,” Australia Post (CEO) Ahmed Fahour said.

The deal has come on the heels of (QAN)’s improved performance and business outlook, along with the surge in the volume of courier services driven by internet retailing.

Fahour said Australia Post ships +20% more air freight on Mondays than it does on Tuesdays, often as a direct result of weekend internet shopping. He said the number of products purchased online would keep growing over time, and has risen from +2% to +3% in 2010 to +6% to +7% of total sales in 2016.

“This [new fleet] is great news for local businesses, manufacturers, wholesalers, retailers and all ecommerce companies,” he added.

(QAN) (CEO) Alan Joyce said the contract was a partly a product of the airline’s “transformation program” and would enable Australia Post to sharpen its efficiency and flexibility, better coordinate its supply chain, and deliver a better service to customers.

News Item A-2: "Jetstar, Qantas on Recruitment Drive As They Await New Fleets" from "The Australian" May 13, 2016.

Jetstar (IMU) is on the hunt for first officers (FC) to fly its fleet of A320s as it looks to boost its pilot (FC) ranks by +50 across the next two years.

The airlines' recruitment drive for Australia-based pilots (FC) will boost its overall pilot (FC) ranks from 800 to about 850 by 2018.

All new recruits will be brought on to fly Jetstar (IMU)'s 59-strong fleet of A320s and A321s that operate across Australia and New Zealand.

Applicants will be required to hold an Australian Air Transport Pilot Licence and must have 1500 hours total aeronautical experience. The recruitment drive is not a cadetship program and applications are open to direct-entry first officers (FC) only.

The first batch of recruits is expected to start training at Jetstar (IMU)'s Melbourne base from August. "Jetstar (IMU) is an exciting business with a wealth of opportunities in Australia, New Zealand and across Asia, and we expect to see significant demand for these roles," Jetstar (IMU) Australia & New Zealand Chief Pilot, Captain Georgina Sutton said.

"We know that many Australian pilots (FC) have moved overseas to fly for international carriers, so we expect we'll see a great deal of interest in these new roles from those pilots (FC), who are keen to return home." (IMU), which turns 12 this year, is targeting 1st officers (FC) to contend with natural attrition from its workforce and the replacement of Qantas (QAN) pilots (FC) who have been working at Jetstar (IMU) on leave without pay.

Those Qantas (QAN) pilots (FC) soon will return to (QAN) to help fill recruitment needs with its incoming Boeing 787 Dreamliners, which are expected to be delivered next year.

Jetstar (IMU)'s recruitment drive comes as its parent, (QAN) continues with plans to hire 170 new pilots (FC) during the next 3 years.

(QAN) is ramping up its recruitment of pilots (FC) in its largest drive since 2009, as it prepares to bring in the 1st of 8 Boeing 787-9 Dreamliners into its fleet from next year.

News Item A-3: "Today's Challenges in Creating an Aircraft Maintenance Facility" by Franco Eleuteri of (FE&A) Aviation.

Franco was responsible for developing the concepts for the new Qantas (QAN) A380 capable hangar at Los Angeles (LAX). Writing for "(MRO) Network," he discusses what he believes are the biggest challenges facing companies building aircraft hangars.

An aircraft maintenance facility can no longer be thought of as just providing a covered working space, but is part of a bigger picture. It must, in a competitive world, be part of an overall process aimed at an increased utilization of assets, including the aircraft, personnel, buildings, equipment and materials, the ultimate goal being to be part of a better business model, while providing an improved passenger experience.

To achieve this requires a focus on the maintenance process, the facility (building and equipment), the organization and the business needs as part of an integrated plan, which creates more of a challenge than the design and construction of a hangar as shelter.

* The challenge

The development of a facility to meet these new goals requires a synergistic team approach, which can go against some of the traditional bureaucracies created within an (MRO) organization.

This involves working across organizational silos, which could include; planning, engineering, the supply chain, properties, procurement, information technology (IT) and human resource (HR) functions, while keeping the ultimate goal in mind. This further includes addressing the "I want" versus the "I need" attitude and the thought: “better ask for more since they will cut me back anyway” which makes the design to budget process more challenging.

A further impediment is the need to move the team from the tendency of repeating the past, while not being open to new and improved ways of doing things. The management of change both in defining the project solution and the operation of the new facility is one of the biggest challenges in trying to achieve a more productive operation

* “All I need is a hangar”

Previously a hangar was primarily considered a shelter in which to perform maintenance tasks. However, the new operating models used in the aviation world require a rethink of some traditional approaches. As an example, a line maintenance operation at a hub or gateway airport equates to more to a formula 1 pit stop, than to a traditional garage

Line maintenance activities at such a location, which include both scheduled and non-scheduled tasks, are time critical in nature, since they affect dispatch reliability. This is compounded by the goal of maximizing the use of natural ground time.

Examples of projects which utilize new concepts and techniques to meet these requirements include the Air New Zealand (ANZ) Hangar Three in Auckland (which received the "(MRO) Facility of the Year" Award) and the Qantas (QAN) project at (LAX).

* Qantas hangar (LAX)

The characteristics of (LAX) as an intercontinental hub and gateway with resulting Return Over Night (RON) and Return Over Day (ROD) schedules, drive the design characteristics of a facility at such a location.

As a result, the (QAN) A380 capable hangar, incorporates some unique design features which enable one to capitalize on an aircraft’s natural ground time, in addition to minimizing both operating and capital expenditures.

The facility incorporates a central large span 100m/328 ft fully covered area incorporating bi-level support space providing direct access to the cabin interiors, together with two adjoining Attached Hardstand (AHS) positions. This enables the facility to simultaneously handle three large wide body aircraft.

The design, which accommodates a full range of wide body aircraft, facilitates Return of Aircraft (RTA) work, including a focus on the cabin, which work has increased as a result of the more complex aircraft interiors and the goal of an improved passenger experience.

A tail dock able to handle the height of the A380 has also been incorporated to facilitate work, on the empennage, for an aircraft in a tail in position. The facility is therefore designed to accommodate aircraft in a tail in, or nose in position, enabling the aircraft to be positioned in the best manner to perform specific maintenance work.

The design philosophy utilized on the project, addressed process, facility and organizational issues on an integrated basis, with the ultimate goal of supporting the “front line,” which includes the need to provide right materials and tools for the individual maintenance tasks.

This further includes the goal of fostering a collaborative team approach by the use of visual management techniques. The (QAN) hangar therefore does not just provide a covered working space, but aims to create an efficient working environment best suited to perform the aircraft maintenance work at (LAX).

* Overall hangar characteristics

The characteristics of a maintenance hangar are a function of the type of work to be performed and the location of the facility, in addition to the goal of maximising the benefits that can be derived from the investment. New concepts and techniques are therefore being used in facility design, which require a new approach and thought process. This considers both existing and projected future needs.

“The only thing for sure in this business, is that things will change,” a reply to the request made to a VP of Technical Operations for a definition of the projected aircraft fleet and work tasks. The “hangar” must therefore be able to respond to a dynamic and changing work environment, while maintaining a control of both capital and operating costs. This is the principal challenge in the creation of a maintenance hangar today.

June 2016: "Incident: Qantas 747 over Pacific Ocean on June 21, Smart Phone Erupts in Fire" by Simon Hradecky, "The Aviation Herald," June 29, 2016.

A Qantas (QAN) Boeing 747-438 (RB211-524G2) (1230-25564, /99 VH-OJS) performing flight QF11 from Sydney (Australia) to Los Angeles (USA), was en route at FL340 over the Pacific Ocean near Kiribati Island (about N0 W162) about 6.5 hours into the flight, when a passenger's smart phone, that had fallen into the passenger seat's reclining mechanism, was crushed when the seat was moved. The battery of that crushed smartphone erupted in fire, which was extinguished by cabin crew. The 747-438 continued to Los Angeles for a safe landing about 6.5 hours later.

Australia's Transport Safety Board (TSB) announced they have opened an investigation into the occurrence rated a "serious incident," and a report is expected within several months.

August 2016: News Item A-1: Qantas (QAN) reported a net profit of +1 billion Australian dollars/+$760 million for the fiscal year through June 30, a record for (QAN) and an increase of >80% from the previous year.

Group revenue rose by +2.4% to A$16.2 billion for the fiscal year. Fuel costs after hedging dropped by -A$664 million. Underlying earnings rose by +20% for Qantas domestic; 92% for Qantas international (QAN); 97% for the Jetstar group (IMU); and 10% for the customer - (loyalty) program. However, the freight division saw its underlying earnings drop by -44%.

Qantas (QAN) is projecting capacity growth of +2 to +3% for the 6 months through December 31, mainly driven by increased aircraft utilization. Group domestic capacity will be flat or down by -1%, with international capacity up by +4%.

(QAN) had previously warned of softer demand during the April - June quarter, and (CEO) Alan Joyce said this effect lingered into the July - September quarter. However, he predicted market conditions will return to normal after September.

The group has now achieved almost -A$1.7 billion of its planned -AU$2.1 billion in cost cuts and restructuring benefits, with the remaining A$450 million to be realized in the current fiscal year.

News Item A-2: The Airbus Group appointed Qantas (QAN)’s Luc Hennekens as Chief Information Officer (CIO), effective October 1.

November 2016: The USA Department of Transportation (DOT) has dealt Qantas (QAN) and American Airlines (AAL) a setback in their efforts to expand their alliance on routes between the USA and Australia. On November 18, the (DOT) tentatively denied the 2 carriers’ plans for a metal-neutral joint venture (JV) between the 2 countries and New Zealand.

December 2016: News Item A-1: "Qantas to Fly 787-9 Dreamliner from Perth to London" by China Aviation Daily, December 11, 2016.

Qantas (QAN) is set to add to its list of aviation 1sts, with (QAN), the national carrier confirming it will operate non-stop flights from Perth to London using the 787-9 Dreamliner. The 14,498 km service will be the 1st regular passenger service to directly link Australia with Europe when it begins in March 2018.

Qantas Group (CEO) Alan Joyce said the history-making route would be a watershed for travel, tourism and trade. "When (QAN) created the Kangaroo Route to London in 1947, it took 4 days and 9 stops. Now it will take just 17 hours from Perth non-stop." "This is a game-changing route flown by a game-changing airplane. Australians have never had a direct link to Europe before, so the opportunities this opens up are huge."

"It's great news for travelers because it will make it easier to get to London. It's great news for Western Australia because it will bring jobs and tourism. And it's great news for the nation, because it will bring us closer to one of our biggest trade partners and sources of visitors." Alan Joyce said passenger comfort on the long flight was a key consideration. "When we designed the interior of our 787s, we wanted to make sure passengers would be comfortable on the extended missions the airplane was capable of."

"That's why we have features in our Economy (Y) seats that other airlines reserve for Premium Economy (PY). Our Business Suite has been nicknamed 'mini First (F) class' by many of our frequent flyers. And we're redesigning our on-board service to help reduce jetlag," he added.

The enhanced (QAN) cabin design is in addition to the comfort factors that Boeing built in to the 787 Dreamliner (improved air quality, lower cabin noise and technology to reduce turbulence).

Alan Joyce said the direct route is expected to appeal to travelers on the E Coast as well as W Australians, helping to deliver a tourism boost. "A direct flight makes traveling to Australia a much more attractive proposition to millions of people. We expect many travelers from Europe will start their time in Australia with a visit to Perth before going on to see other parts of the country."

"Our modelling shows that people from the East Coast as well as South Australia would fly domestically to Perth to connect to our non-stop London service. Some will take the opportunity to break their journey, whether it's for business meetings in Perth, to holiday, or to visit family."

The new flight will operate through (QAN)'s existing domestic terminals (T3/4), which will be upgraded to accommodate international flights. (QAN)'s current international services from Perth (to Singapore and to Auckland) will also move to this terminal, helping to simplify the journey for thousands of people every year. (QAN) will move its operations to an expanded Terminal 1 at Perth Airport by 2025, pending a commercial agreement. "We'll be looking at the timing of our domestic flights through Perth to offer the best connections we can to our international flights, particularly given they will all be under the one roof," added Alan Joyce. "I'd like to acknowledge the support of the West Australian Government and Perth Airport in helping make this service a reality."

Seats on the Perth - London flights will go on sale in April 2017 for the 1st services in March 2018. The Boeing 787-9 Dreamliners used on the route will carry 236 passengers across Business (C), Premium Economy (PY) and Economy (Y) cabins.

* Fast Facts - Perth to London

- The 14,498 km flight will take approximately 17 hours (slightly more or less depending on winds).

- When it launches, is expected to be the 3rd-longest passenger flight in the world.

- Longest flight on the (QAN) network, followed by our non-stop A380 Sydney - Dallas service (13,730km).

- Will be the longest Boeing Dreamliner flight in the world.

- The 1st regular passenger service from Australia to Europe adds to (QAN)'s list of flying 1sts, including:

* 1st passenger jet services across the Pacific in 1959 with a 707.

* 1st (and only) non-stop passenger flight from London to Sydney in 1989 with a 747-400.

* 1st to operate the world's largest passenger aircraft (A380) on the world's longest route (Sydney - Dallas) in 2014.

* Perth was also used as a stopover on flights to London between the 1940s and 1960s.

* In 2015, (QAN) operated a 1-off 747-400 charter flight from Perth to Istanbul to take Australians to the Centenary of Anzac at Gallipoli (the last time (QAN) flew from Australia to Europe non-stop.

News Item A-2: Qantas (QAN) launches 6x-weekly Los Angeles - Melbourne Boeing 787-9 service on December 15, 2017.

News Item A-3: "2nd Sydney Airport Cleared for Takeoff" by (AFP) December 12, 2016.

Sydney is to get its 2nd international airport after the Australian government approved plans Monday (December 12), ending decades of indecision over a facility that will initially handle 10 million passengers a year.

Badgerys Creek in the city's western suburbs had already been selected as the site, with Prime Minister Malcolm Turnbull signing off on its long-awaited construction. It is scheduled to open in the mid-2020s, easing pressure on Sydney's Kingsford Smith Airport, the main gateway into Australia, which is reaching capacity. "The need for an airport in western Sydney has been screamingly obvious for many years," said Turnbull, adding it would be a catalyst for investment in the area.

"We are getting on with the job, and this airport will be built. Tens of thousands of jobs will be created. It will transform the economic opportunities in western Sydney."

The 1st stage will see 1 runway constructed, able to handle Airbus A380s and 10 million people each year, with a 2nd expected to be needed by 2050. "The important point is the airport is being planned for future capacity expansion," Urban Infrastructure Minister Paul Fletcher said.

"We are taking decisions that allow Sydney and Australia's aviation capacity needs to be met not just over the next 10 or 20 years but over the next 30, 40, 50 years and beyond."

Kingsford Smith Airport, which is 8 kms (around 5 miles) from the city center, handled 39.7 million travelers in 2015 and is reaching its limit with passenger numbers through Sydney forecast to more than double in the next 20 years.

It is also subject to flight restrictions between 11 pm - 6 am, with Badgerys Creek, about 45 kms west of Sydney's central business district, expected to be curfew-free, given that fewer people live nearby.

Badgerys Creek has been a potential site since 1986 with the federal government buying about 1,800 hectares/4,446 acres in the area and the surrounds kept largely free of development since then. But not everyone is happy, with local government body, the Western Sydney Regional Organization of Councils (WSROC), saying the signing off on plans was premature. "This is an airport being approved without flight paths, without commitment to a rail line and without a solid plan for jobs," said (WSROC) President Stephen Bali.

"(WSROC) has previously called for the government to secure a solid infrastructure plan for the airport, including a heavy rail link to the site from the start of operations." Fletcher insisted the environmental impact statement set out a series of indicative flight paths and that the airport would be "rail ready," with improvements to road links also part of the plan.

February 2017: News Item A-1: Qantas (QAN) reported a consolidated net profit of +A$515 million/+$372.1 million for the 1st half of its (FY) 2017 (July - December 2016), down -25.1% from +A$688 million in the 1st half of (FY) 2016.

Group revenue declined -3.3% to A$8.2 billion for the period. Expenses stayed even year-over-year (YOY) at A$7.4 billion. The group’s operating profit came to +A$812 million, down -25.8% from +A$1.1 billion.

(QAN) said its profit decline in the 1st of its financial year was largely related to the inclusion in last year’s result of a +A$201 million gain from the sale of Qantas (QAN)’s Sydney Airport terminal.

(QAN) Domestic’s (EBIT) for the 1st half was A$371 million, down -4.1% (YOY), with an operating margin of 12.7%, down -0.2 point from last year. Qantas (QAN) Domestic’s capacity decreased -1.5% (YOY) to 18.3 billion (ASK)s but the division’s passenger load factor (PLF) increased +0.8 point to 77.3% LF.

Qantas International’s (EBIT) for the period totaled A$208 million, down -22.3% (YOY); the division’s operating margin was 7.3%, down -1.8 points; international capacity grew +4% (YOY) to 32.8 billion (ASK)s; international (PLF) was 81.3% LF, down -2 points from last year.

Jetstar (IMU) Group’s (EBIT) totaled A$275 million, a +5% increase (YOY); the Group’s operating margin was 14.8%, up +1.1 point (YOY). Capacity increased +0.4% to 24.7 billion (ASK)s, and overall (PLF) for the business unit was 83.3% LF, up +1.1 points. Profits in the division were driven by Jetstar (IMU)’s international operations to and from Australia.

Qantas (QAN) Freight’s (EBIT) for the period totaled A$27 million, down -29% (YOY), with a 5.6% operating margin, down -1.6 points (YOY).

For the consolidated Qantas (QAN) Group, passenger traffic increased +1.1% during the half-year period, totaling 61.3 billion (RPK)s; overall group capacity increased +1.4% to 75.7 billion (ASK)s, producing a group (PLF) of 81% LF, down -0.2 point (YOY).

The group had 308 airplanes in service as of December 31, 2016, a +2.7% increase (8 airplanes) (YOY). During the 1st half period, (QAN) purchased 3 Fokker F100s to enable capacity reductions on routes previously operated by larger airplanes and Jetstar (IMU) leased 2 Airbus A321s to meet demand in short-haul leisure markets. (QAN) said it will defer delivery of Jetstar (IMU)’s first A320neo until financial year 2019, though 2 Boeing 787-9s are scheduled for entry into Qantas International’s fleet by late 2017. (QAN) will retire its 2 oldest 747s by mid-2018; eventually 5 747s will be retired as 8 787s enter (QAN)’s fleet.

Group capacity is expected to increase approximately +1% to +2% in the 2nd half of (FY) 2017; group domestic capacity will decrease by approximately -2% while group international capacity will increase by approximately +3%. “Our focus is to stay disciplined on capacity, keep downward pressure on costs and introduce game-changing improvements like the [787s) and high-speed Wi-Fi,” (QAN) (CEO) Alan Joyce said. “Internationally, the market will remain challenging, but we expect the revenue trend we saw in the 1st half to moderate. We’ll be bedding down the capacity increases we’ve already announced, using our existing fleet in high-growth Asian markets.”

(QAN)'s 1st commercial service with free Wi-Fi is expect to debut by the end of March, with the service eventually rolling out to 80 domestic airplanes and later to (Qantas’ international and regional fleets. The group also introduced a premium economy (PY) service for its 787s, which Joyce said will offer more personal space, more reclining space, better lighting and mobile device storage.

News Item A-2: Watch Qantas (QAN) latest Safety Video:

737-838 (33992, VH-VYD), purchased off lease.

April 2017: Qantas (QAN) has moved a step closer to providing in-flight connectivity on its domestic aircraft fleet.

Following several months of tests with broadband provider ViaSat and (nbn)'s Sky Muster service, (QAN) is now operating Wi-Fi in beta mode on a Boeing 737-800. Up to 15,000 passengers a month will be able to try the service free of charge while (QAN) continues to fine-tune the system.

ViaSat provides Qantas with connectivity between the aircraft, the high capacity satellites and the ground stations, which together provide a link to the internet. (Nbn) designs, builds and operates Australia's national broadband service.

Sky Muster is a broadband Ka-band satellite service that covers mainland Australia, Tasmania and several nearby island groups.

Beta mode testing is anticipated to last until mid-2017, after which the system will be rolled out to (QAN)'s 80-strong domestic fleet of Airbus A330-200s and A330-300s, as well as its Boeing 737s. The program should be complete by the end of 2018.

(QAN) said the system will offers connectivity speeds up to 10x- faster than conventional onboard Wi-Fi and will allow passengers to stream films, TV shows, music and news. Users will also have access to email and social media, or can shop online.

Like several other airlines, (QAN) has decided to not to allow passengers to make in-flight phone calls, fearing this will irritate nearby fellow travelers. "In-flight Wi-Fi has been on our wish list for quite a while, but the sheer size of Australia meant it was hard to offer a service that was fast and reliable," Qantas Group (CEO) Alan Joyce said on a demonstration flight over New South Wales. "The (nbn) has made it possible."

Joyce said the technology on-board this 737 is "a generation ahead of what most airlines around the world have and there's a fair amount of complexity involved. That's why we've installed it on 1 airplane for the 1st few months until we've finished fine-tuning and are ready to roll out to the rest of the domestic fleet."

Wi-Fi will also provide (QAN) pilots (FC) and cabin crew (CA) with real-time information that (QAN) said will improve efficiency and the passenger experience. Pilots (FC) will be able to access detailed live weather, which will help them steer clear of turbulence as well as making better use of tailwinds to reduce flying time. Cabin crew will have more options to better manage customers' onward journeys while still in the air.

(QAN) is in discussions with suppliers to develop an internet product for its international fleet that can overcome a number of technical, performance and coverage challenges.

Customer research commissioned by (QAN) recently showed the most popular uses for Wi-Fi on domestic flights would be a mix of emails (52% of respondents), internet browsing (46%), streaming music/TV/movies (31%), social media (30%) and news (30%).

August 2017: News Item A-1: In March 2018, Qantas (QAN) will start Perth to London, the world's longest 787 flight, surpassing previously longest United Airlines (UAL)'s Singapore to San Francisco.

News Item A-2: Qantas (QAN) has announced a multi-million dollar major cabin upgrade for its 12 Airbus A380s to improve passenger comfort on long-haul flights and meet increased demand for premium cabins on flights to the USA, Europe and Asia. Work on the 1st A380 is expected to begin in the 2nd quarter of 2019. All 12 aircraft will be upgraded by the end of 2020. Airbus (EDS) will manage the design integration.

September 2017: News Item A-1: Qantas (QAN) is to base 4 of its forthcoming Boeing 787-9s in Brisbane, Australia.

(QAN) has 8 787-9s on order, with the 1st due to arrive in October. The 1st batch of 4 will be stationed in Melbourne, Australia, with the 1st of the Brisbane-based batch due to arrive in mid-2018. All 4 787-9s are scheduled to be in place by the end of 2018.

From Brisbane, the 787-9 is capable of flying nonstop to destinations such as Seattle, Chicago, San Francisco, and Vancouver.

The new 787-9s will initially replace Boeing 747s; the 787-9s’ greater range opens up more potential destinations than can be reached by the 747s.

“Queensland is the birthplace of Qantas (QAN), and it’s fitting that we will base 4 of our [787-9s] in the [Australian] state,” Qantas Group (CEO) Alan Joyce said. “Each airplane we base in Brisbane brings new jobs. 120 of our [787-9] cabin crew (CA) and pilots (FC) will be based in the city. A further 350 indirect jobs are expected to be created as a result.” He anticipated that the new routes available with the 787-9 would drive more international tourism to Queensland.

(QAN)’s 1st 4 Melbourne-based 787-9s will operate the Melbourne - Los Angeles route from December, and the Melbourne - London (via Perth) route from March.

(QAN) will take delivery of its 1st 787-9 in October. (QAN) will fly it on domestic sectors for 6 weeks for crew training and familiarization before its 1st scheduled Melbourne - Los Angeles service on December 15. (QAN) will operate the 787-9 in a 3-cabin, 236-seat configuration with 42C business class, 28PY premium economy and 166Y economy seats.

News Item A-2: Qantas (QAN) has reached an agreement with Airbus (EDS) to upgrade its 12 flagship A380 cabins to further improve passenger comfort on long-haul operations while maximising economics. In particular, the new interior takes advantage of the A380's large floor area to most efficiently embody Qantas (QAN)'s' latest seat products for Business (C) Class and Premium Economy (PY).

Airbus (EDS) will be responsible for the overall upper-deck integration. In addition (EDS) will develop specific tailored monuments for (QAN) and a new and unique business (C) lounge area in the forward upper-deck. The installation phase will start in (Q2) 2019. All 12 aircraft are planned to be upgraded by around the end of 2020.

Didier Evrard, Executive VP Programs Airbus Commercial Aircraft said: "We are very pleased to contribute to (QAN)'S success and reputation by applying our innovation and proven expertise in designing and upgrading cabins to increase the efficiency and value of its A380 operations." Evrard added: "This also shows the continued confidence of (QAN) in the A380 as a key member of its fleet to offer its passengers a unique way to travel."

The capacity of Qantas A380s after the upgrade will be: 14 First Suites (unchanged), 70 Business Suites (up by +6), 60 Premium Economy (up by +25) and 341 Economy (down by -30) for a total of 485 passengers (up by +1). In particular, the upgrade will meet (QAN)'s increased demand for revenue-enhancing premium cabins on flights to the USA, Europe and Asia.

The A380 is the world's largest, most spacious airliner that offers passengers the smoothest, quietest ride. Comfortably seating around 575 passengers on routes up to 8,200 nautical miles, the A380 has a unique ability to generate revenue, stimulate traffic and attract passengers. The A380 is the only aircraft which has two full decks, allowing it to offer wider seats, broader aisles, and more floor space. >170 million passengers have enjoyed the experience of flying on board an A380. Today, 240 airports can accommodate the A380 around the world and every 2 minutes, an A380 either takes off or lands.

October 2017: News Item A-1: Qantas Airways (QAN) has made a major move toward renewable fuels, announcing plans to use biofuel in its airplanes that stop at Los Angeles International Airport. (QAN) intends to use a blend of 50% renewable fuel and 50% regular jet fuel in its airplanes operating from Los Angeles from 2020. To support this goal, it has agreed to purchase 8 million gallons of renewable fuel every year for the next 10 years from USA-based company (SG) Preston.

News Item A-2: Qantas (QAN) took delivery of its 1st 787-9.

December 2017: News Item A-1: Qantas (QAN) launched year-round flights between Adelaide (ADL) and Kingscote (KGC) on Kangaroo Island on December 4. This 124 km domestic service is operated by QantasLink’s 50-seat Q300s, beginning 3x-weekly year-round and increasing to 5x-weekly over the peak summer season through to Easter. Regional Express also flies on the airport pair, with an 18x-weekly service. (QAN) also intends to start a service from Melbourne to Kangaroo Island later this month.

News Item A-2: "John Travolta Commits to Personally Deliver Boeing 707 to (HARS), by australianaviation.com.au December 8, 2017.

USA movie actor John Travolta will personally deliver the ex-Qantas (QAN) Boeing 707 he is donating to the Historical Aircraft Restoration Society (HARS).

In May, the keen pilot announced he would gift the 707-138B, registered (N707JT), to (HARS), with the airplane to be restored to a safe flying state before it is flown over to Australia from his Florida home.

At the time, Travolta said he was hoping to be part of the flight crew (FC) taking the airplane to the (HARS)’ facility at Albion Park, supported by qualified pilots and engineers.

Sponsor Bendigo Bank said on its Facebook page Travolta would make the trip some time in 2018. “John Travolta will be coming to the Illawarra!” the post said. “He has confirmed he will be landing at Illawarra Regional Airport in the Boeing 707 he has donated to (HARS) and he wants to thank the local community for their support and interest in the (HARS) 707 Project.”

As (VH-EBM) and named "City of Launceston," the 707 was delivered to Qantas (QAN) in September 1964 and stayed with (QAN) until 1968. After a brief stint with Braniff Airlines (BNF), the 707 was converted with a corporate jet interior in the 1970s. Travolta acquired the airplane in 1998.

(QAN) named Travolta as 1 of its ambassadors in 2002, when the 707 was repainted in (QAN)’s iconic V-Jet livery from the 1960s. The actor also owns a number of other airplanes.

(HARS) President Bob de la Hunty told the "Illawarra Mercury" the project would cost “many millions of dollars.” “We didn’t expect anything less, but now that we know what we need to find, we can break it down and work with the people who have shown interest in what we’re doing,” De La Hunty told the newspaper.

The exact delivery date was yet to be confirmed but likely to be in the 2nd half of 2018.

The former (VH-EBM) will become the 2nd ex-Qantas (QAN) 707 to go on display in Australia, after (QAN)’s 1st 707, the former (VH-EBA) "City of Canberra," was placed on display with the Qantas Founders Museum in June 2007.

(HARS) is already the home of Qantas (QAN)’s historic Boeing 747-400, the former (VH-OJA) (and also) "City of Canberra" that flew nonstop from London Heathrow (LHR) to Sydney on its delivery flight.

* John Travolta (HARS) 707 Project Update.

John Travolta will be coming to the Illawarra! He has confirmed he will be landing at Illawarra Regional Airport, Australia in the Boeing 707 he has donated to (HARS) and he wants to thank the local community for their support and interest in the (HARS) (707) Project.

January 2018: "Qantas 787 Completes Transpacific Biofuel Flight" by Graham Warwick (graham.warwick@aviationweek.com) January 30, 2018.

This month, Qantas Airways (QAN), Agrisoma and World Energy partnered on a transpacific 787 flight from Los Angeles to Melbourne. The 15-hour flight used 53,000 lb of blended, carinata-derived biofuel, saving 40,000 lb in carbon emissions, the Australian flag carrier said at the time.

Agrisoma is working with farmers in North America, South America, Australia and now Europe to plant carinata as a rotational crop and additional source of income, Fabijanski said. “We develop the seed and help manage production and other parts of the value chain.”

Some 50,000 acres of carinata were planted in 2017, enough to produce 20 to 25 million gallons of biofuel. That has doubled in 2018 and is expected to double again with each growing cycle. “We can supply a regular volume to the industry,” he said.

From farmers to fuel producers, Fabijanski said Agrisoma is working to maximize the life-cycle greenhouse-gas reduction from carinata-derived biofuel. “It can be >100% on a regular basis with the production we have now,” he said.

A non-food type of mustard seed, the carinata was developed by Canadian agricultural-technology company Agrisoma Biosciences. Under a partnership announced in 2017, the company is working with Australian farmers to grow the country’s 1st seed crop for commercial aviation biofuel by 2020.

The carinata was processed into jet fuel by AltAir Fuels in Paramount, California, using Honeywell (SGC) (UOP)’s process for producing (HEFA) (hydroprocessed esters and fatty acids) biofuel, which is approved for use in aircraft up to a 50% blend with conventional jet fuel.

AltAir is already using (UOP)’s process to produce biofuel for United Airlines (UAL) under a 3-year, 15 million gallon offtake agreement that saw the fuel being used in regular scheduled flights from Los Angeles (LAX) beginning in March 2016. The biofuel for (UAL) is made from tallow.

Carinata requires no specialized production or processing techniques, (QAN) said. It is water efficient and sown in either fallow areas where food crops fail or in between regular crop cycles. As a rotational crop, it can improve soil quality, reduce erosion and provide farmers with additional income.

Field trials by the University of Queensland in Gatton, Queensland, and in Bordertown, South Australia, have demonstrated carinata should do well in the Australian climate, (QAN) said. In the USA, Agrisoma is working with the University of Florida to commercialize carinata to produce jet fuel.

March 2018: News Item A-1: Qantas Airways (QAN) made a giant leap forward in long-haul travel with an inaugural nonstop flight between Australia and Britain in <24 hours over the weekend. The Boeing 787-9 Dreamliner arrived just >17 hours after setting off from the western Australian city of Perth.

Flight QF9, which landed in London early Sunday, September 25, carried >200 passengers and 16 crew members. The flight was operated by 4 pilots (FC) during the journey, with 1 or 2 pilots resting at any 1 time. (QAN)’s (CEO), Alan Joyce, billed the trip as “historic” and “a game changer.”

The route marks the 1st nonstop passenger service between the continents, putting Europe’s financial center 1 night’s sleep from 1 of Australia’s major economic centers.

The new link with Perth (a 9,009-mile journey) is around 3 hours quicker than routes that involve stopovers in the Middle East to change planes or refuel. It is also set to shorten journeys from London to Sydney or Melbourne, compared with flying via Dubai.

The route is about a quarter more than Britain’s previous longest service (7,275 miles) which was flying between London and Jakarta, the capital of Indonesia. For (QAN), the Perth connection is a high-profile test for a planned ultra long-haul network that the airline hopes will span the world by 2022.

(QAN) has challenged Boeing (TBC) and Airbus (EDS) to build a jet by 2022 that can fly fully loaded from Sydney to London without a break. Success on the Perth toO London service would lay the foundations for even longer routes to Europe.

Flying business (C) class from Perth to London with Qantas in mid-June would cost (USA) $5,099. Opting for Singapore Airlines (SIA) via Singapore would take an extra +2 ½ hours but cost just (USA) $3,734, according to fares on Webjet.

Aircraft leaving Perth for London will need feeder passengers from around Australia, said Volodymyr Bilotkach, author of the book “The Economics of Airlines.” But flying from Sydney to London via Perth saves little time over a transfer in Asia or the Gulf, he said.

Andrew McGinnes, a spokesman for Qantas (QAN) in Sydney, said bookings on the new route “have been strong,” and corporate clients in eastern Australia have indicated they’ll stop in Perth for meetings on their way to London. “It’s a very competitive market but this is a unique flight,” McGinnes said.

Some passengers agreed to share data on their sleeping and activity patterns with researchers from the University of Sydney. They wore monitors that recorded data about their mental state, eating patterns and hydration levels.

News Item A-2: "The Big Switch: Qantas Changes London Stopover from Dubai to Singapore" by David Flynn, Australian Business Traveler, March 15, 2018.

It's "goodbye" to Dubai and "hello again, old friend" to Singapore, as Qantas (QAN) will very soon ditch Dubai, the Emirates hub and return to Singapore as the stopover point for its "Kangaroo Route" to London.

Dubai, the Gulf city, will see its last (QAN) flight on Saturday March 24 (almost 5 years to the day that the (QAN) to (EAD) alliance saw the long-standing Singapore stopover axed in favor of Dubai.

Most Australian business (C) travelers prefer Singapore to Dubai, regardless of whether it's for a 2-hour pit-stop at the airport or a 2-day stay to break their journey.

Over the years, passengers have consistently voted for Singapore as their European stop-over of choice. When we held a reader poll in 2016, Singapore shot to the top with 46.5% of votes (representing almost every 2nd passenger) with Hong Kong coming in 2nd at 26% and Dubai a distant 3rd in the single-digit territory of just 9.2%.

So (QAN)'s change should be a winner among passengers. Yet we appreciate that some travelers have, on the whole, grown accustomed to that Dubai transit. While they may care little for the city itself, the timing of the flights does provide a better chance for sleeping on that 14 hour Dubai to Sydney leg).

And (crucial for 1st class passengers on the Airbus A380) is the changed loungescape between Emirates (EAD)'s sprawling luxury 1st class lounge and the (QAN) Singapore Lounge.

Comparing (EAD)'s flagship 1st class lounge to 1 of (QAN)'s business (C) class lounges at an international outpost is an uneven playing field, of course, but all the same that's the situation which passengers will face.

But it's not just 1st class travelers who are raising the orange flag. Many frequent flyers (including Australian Business Traveler readers, as indicated in this Community discussion) are concerned that the (QAN) Singapore lounge will simply be too small to cope with those superjumbo-loads of business (C) class passengers, Platinum and Gold frequent flyers and Qantas Club passengers.

So, with the big change taking place, it will be interesting to see how this Qantas (QAN)'s shift from Dubai back to Singapore will be accepted by passengers' travels.

April 2018: News Item A-1: "Qantas Eyes Chicago for New Ultra-Long-Haul Flight From Australia" by Christopher Jasper, "Bloomberg News," March 28, 2018.

Qantas Airways (QAN) is evaluating direct flights from Australia to Chicago as the next step in its plan to add more ultra-long-haul destinations using an expanding fleet of Boeing 787 jetliners.

Fresh from launching the 1st-ever direct passenger service to Europe (linking Perth with London's Heathrow (LHR) hub) (QAN) will turn its attention to the USA with the next batch of 4 787s due for delivery this year, (CEO) Alan Joyce said.

A new service from Melbourne to San Francisco starting in September has already been announced and 787s will also replace 747 jumbos on (QAN)'s existing Brisbane to Los Angeles to New York route. But also in (QAN)'s thinking is a direct Brisbane to Chicago service or flights from the Queensland city to Seattle or Dallas.

The same analysis of a decade of wind and weather data that was applied to the Perth to (LHR) route has shown that all 3 destinations would be reachable with a standard passenger load, though flights wouldn't begin until (QAN) wins antitrust immunity for a joint venture (JV) with American Airlines (AAL).

Oneworld (ONW) alliance partners (AAL) and (QAN) in February asked USA regulators for a 2nd time for permission to coordinate fares and schedules and share costs and revenue on trans-Pacific flights. "We're hopeful we could get through that in 6 months," the (CEO) said, adding that the chosen service "could start as soon as the peak season, which is at the end of the year."

* Alliance Links

Chicago is an attractive destination partly because it's a hub for (AAL), as is Dallas, a route (QAN) already serves from Sydney. Seattle is the base of Alaska Airlines (ASA), another of (QAN)'s partners.

The new USA routes will be introduced before (QAN) considers adding more direct European services, which will require both sustained high bookings on the 17-hour Perth flight and a positive trend in the global economy. The London service relies on a higher-than-usual number of business (C) and premium economy (PY) class seats for its viability, and French or German destinations would need to offer similar levels of high-yield demand.

Adding more European flights would require (QAN) to order more 787-9s from 45 options (QAN) holds with Boeing. While the 1st of those have expired, the airline has been able to extend them one at a time, giving it the ability to add planes in short order, Joyce said. Delivery positions for the 787 Dreamliners start from late 2019.

* Jumbo Exit

A decision on the retirement of the final 6 747s of 11 that are to be replaced by 787s could come this year and would lead to further 787 Dreamliner orders. It's also possible the jumbos, which are among the youngest 747s still flying, could be kept in service longer.

Joyce said he's confident that Boeing and Airbus will be able to eke out sufficient extra range from future models to allow (QAN) to fly from Sydney and Melbourne direct to London and New York as soon as 2022. The (CEO) has described the routes as the "last frontier" of aviation, after which all of the world's major cities will have non-stop air links. Options for making such long flights more bearable would include introducing a new 4-class structure, with part of the cargo hold utilized for sleeping berths, Joyce said. "Nothing is off the table," he said.

(QAN)'s 1st Perth to London service landed in the UK April 1 after a 14,498 km/9,000 mile trip. Though not quite the world's longest flight (the record currently held by a Doha to Auckland service operated by Qatar Airways (QTA)) the route signals the beginning of the end of the so-called Kangaroo Route, which has seen planes make the journey from Europe to Australia in a series of hops since the advent of aviation.

News Item A-2: Qantas (QAN) has struck a deal to spin off its catering division, as prospective purchaser Dnata looks to grow its presence in the Australian market and globally.

The deal means about 1,200 employees of the (QAN) catering businesses will be transferred to Dnata. The value of the transaction is not being disclosed, and the agreement is subject to approval from the Australian Competition and Consumer Commission.

Dubai-based Dnata is part of the Emirates (EAD) Group, which has a strategic partnership with (QAN).

Dnata will take over the Qantas Catering Group, which includes subsidiaries Q Catering and Snap Fresh. Q Catering has facilities in Brisbane, Melbourne Perth and Sydney, with (QAN) its largest customer. Snap Fresh has a meal production plant in Queensland, providing frozen meals to airlines and other industries.

Under the deal, Dnata will continue to provide in-flight catering to (QAN) for an initial period of 10 years. Dnata operates 11 catering facilities in Australia and has 4,000 employees in that country in the catering, cargo and ground handling sectors.

Dnata said the acquisition reflects its confidence in the Australian market and its growth potential. The company intends to invest in more infrastructure there, starting with a new catering facility in Sydney.

The (QAN) deal is the latest step in Dnata’s global expansion in the catering sector. It recently opened catering facilities in Dublin and Melbourne, Australia, and is constructing another in Vancouver. It has reached an agreement to acquire New York-based caterer 121 In-flight Catering.

(QAN) said the sale will allow it to prioritize investment in its airline operations. “We’ve always said that we would explore the sale of certain assets where it makes sense, just as we’ve done before, including with the sale of our catering facility in Cairns and (QAN) Defense Services,” (QAN) Domestic (CEO) Andrew David said.

May 2018: "Qantas Orders More Dreamliners, Sets Date to Farewell Jumbos" by "China Aviation Daily," May 02, 2018.

Qantas (QAN) has announced an order for +6 additional Boeing 787-9s to fly on its international network, bringing its fleet of 787 Dreamliners to 14 by the end of 2020. The arrival of the new 787s will enable (QAN) to accelerate retirement of its last 6 Boeing 747s (an airplane type that has been in its fleet in various forms since 1971.

Qantas Group (CEO) Alan Joyce said the announcement was an important moment for (QAN), the national carrier. "This really is the end of 1 era and the start of another. The 747 "jumbo" has been the backbone of Qantas International (QAN) for >40 years and we've flown almost every type that Boeing (TBC) built. It's fitting that its retirement is going to coincide with our centenary in 2020. Over the years, each new version of the 747 allowed (QAN) to fly further and improve what we offered passengers. The 787 Dreamliners are now doing the same thing" Mr Joyce said.

"The 787 has better economics and a longer range, and it's already opened up new routes like Perth to London. With a larger fleet of 787s, we'll be looking at destinations in the Americas, Asia, South Africa, and Europe. (QAN) expects to invest in an additional 787 simulator to assist with training more of its pilots (FC) to operate the new airplanes. This comes on top of the Qantas Group Pilot Academy opening in 2019.

"By the end of 2020 we'll have farewelled the 747, finished upgrading the cabins of our A380s, and welcomed our 14th 787. That's a great proposition for our customers and creates some really exciting opportunities for our people," added Mr Joyce.

Interiors of the additional 787s will feature the same configuration as the existing airplanes. The (QAN) 787 Dreamliner carries fewer passengers than the larger 747 (236 seats vs 364) and has a greater focus on Business (C) and Premium Economy (PY) seating.

However, the reduced maintenance needs of the 787 plus more efficient airplane patterning and reduced payload restrictions on long routes mean the actual impact on overall capacity for Qantas International (QAN) is expected to be negligible. The 787 burns approximately -20% less fuel than comparable airplanes.

To date, (QAN) has taken delivery of 4 787-9s with a further 4 due to arrive by the end of 2018. The 6 just announced will arrive between late 2019 and mid-to-late 2020.

There are currently 10 747-400s left in the fleet and these will be steadily retired between July this year and the end of 2020. (QAN) received the last of its 747s new from Boeing in 2003, which will be 17 years old at time of retirement.

Today's fleet order was made alongside the Qantas Group's Quarter 3 Trading Update.

Contributed by Qantas.

June 2018: See video of 787 Dreamliner build:


July 2018: Qantas (QAN) Plans Darwin to Hong Kong freighter service
by australianaviation.com.au, July 25, 2018.

Qantas (QAN) plans to operate a 1x-weekly freighter service from Darwin to Hong Kong that can transport fresh produce from Australia’s Top End to Asia’s supermarket shelves and dining tables.

August 2018: Qantas (QAN) reported a group net profit of +A$980 million/+$712.3 million for its 2018 fiscal year ending June 30, an increase of +15% compared to the previous fiscal year. The group achieved an underlying profit of +A$1.6 billion, up +14% year-on-year and +5% higher than the previous record year in 2016. Revenue rose +6% to A$17 billion. Underlying profit was up +6.7% for Qantas international, +19.1% for Qantas domestic, and +10.6% for Jetstar (IMU). Fuel costs increased by nearly +A$200 million in 2018.

September 2018: News Item A-1: The Oneworld (ONW) Alliance nominated Qantas (QAN) Group (CEO) Alan Joyce to serve as its Chairman for the next 2 years. He succeeds Finnair (FIN) (CEO) Pekka Vauramo, who is transitioning from (FIN) to join Finland’s Metso Corporation as its new (CEO). Pekka Vauramo had assumed Oneworld’s chairmanship in June 2017.

News Item A-2: See video of Qantas (QAN) A380 (VH-OPA, "Nancy Bird Watson") landing at London Heathrow (LHR):

See video of Qantas 787 flight:

October 2018: News Item A-1: "Qantas Revenue Boost Offsets Higher Fuel Costs" by (ATW) Adrian Schofield (adrian.schofield@informa.com), October 25, 2018.

Qantas (QAN) is confident it can largely recover fuel price
increases thanks to strong passenger revenue trends, favorable economic conditions and healthy forward bookings. In its latest financial update for the 3 months through September 30, (QAN) said its revenue increased by +6.3% year-on-year to set a new record for the period. This means higher fuel costs were “substantially offset” by revenue growth, (QAN) said. While it issues full financial reports every 6 months, (QAN) also releases limited quarterly updates.

Group unit revenue rose by +5.4% for the July to September period,
which is its fiscal 1st quarter. The higher revenue also helped
“parially offset” non-fuel costs, such as the impact of a weaker Australian dollar and commissions paid to travel agents. Group statistics include both (Qan) and Jetstar (IMU). Overall capacity was down -0.3%, with the international and domestic operations both slightly lower. Group international unit revenue rose by +4% and domestic was up +6.8%.

Forward bookings as of September 30 were +8% higher year-on-year.
Group capacity for the 1st half of (QAN)’s fiscal year is expected to be essentially flat, with domestic down 0 to -1% and international
unchanged. (QAN) expects to be able to substantially offset fuel price increases for its full fiscal year through June 30, 2019. Fuel costs for this period are forecast to be A$4.1 billion/$2.9 billion, up from A$3.2 billion in the prior fiscal year.

(QAN) retired 1 Boeing 747-400 in September, with the remaining 9 to be phased out by the end of calendar year 2020. Its 7th and 8th 787-9s are due to be delivered in November.

(QAN) revealed plans to build a 1st-class lounge in Singapore by
the end of 2019, as well as upgrading its existing business (C) class lounge. These 2 projects combined will increase (QAN)’s Singapore
lounge capacity by +60%.

News Item A-2: See video of Sydney Harbor Bridge (by drone):


November 2018: Qantas (QAN) and aviation Information Technology (IT) provider (SITA) are trialing a new biometric identification system at Brisbane Airport that will allow passengers to store their passport details on smartphones. The trial will involve facial recognition technology, and a smartphone app that enables passport information to be uploaded. This will mean passengers can check in for international flights before arriving at the airport and will not have to show their passport or boarding pass at the lounge or boarding gate.

December 2018: News Item A-1: "WestJet, Qantas Expand Code Share Partnership" by Bill Carey (bill.carey@informa.com), December 7, 2018.

WestJet (WJI) has expanded its code share relationship with Australia’s Qantas (QAN) by adding (QAN) operated flights between Los Angeles and Sydney, Melbourne and Brisbane.

Itineraries connecting (WJI)’s network to the destinations in Australia are available now for flights beginning December 6. (WJI)’s (WS) code will be added on (QAN) daily flights between Los Angeles and Sydney, Melbourne and Brisbane, and its seasonal service between Vancouver and Sydney.

(WJI) and (QAN) have been code share partners since 2014. In addition to (QAN), (WJI) has code share agreements with 15 other international airlines. “(WJI), welcomes this deepened relationship with (QAN),” (WJI) VP Network Planning & Alliances Brian Znotins said. “Expanding our partnership with (QAN) provides our guests greater global travel options and aligns with the new premium products and services (WJI) is developing as we continue our evolution to a global network airline.”

News Item A-2: "Qantas Is Planning to Operate the World's Longest Flight in Custom-Built Planes by 2022" by Youyou Zhou, Quartz, December 24, 2018.

Qantas Airways (QAN), the flag carrier of Australia, is looking to launch what would be the world's longest flight by 2022. The proposed Sydney-to-London route would take 20 hours and 22 minutes.

(QAN) has a business plan, but no plane to fly it. (QAN) has requested proposals from Boeing and Airbus for airplanes and configurations that could operate the trip. The plane makers would likely need to shave weight to provide a solution. That means fewer passengers and less cargo, but more legroom and possibly even lounges or gyms on board.

The route would shorten the flight time between Sydney and London by 3 hours and 45 minutes before as well, of course, any layovers and time needed to make connections. Whichever plane is selected, it will also be capable to fly a direct route between Sydney and New York, saving 2 hours and 45 minutes.

The world's longest flight is currently Singapore Airlines (SIA)'s 9,537 mile route between Newark, New Jersey and Singapore. After being put on hiatus while fuel prices were high, the route was reinstated in 2018. The 2nd-longest is Qatar's 9,032-mile route between Doha and Auckland, NZ.

February 2019: News Item A-1: "Airline Alliance Oneworld, Which Represents Cathay Pacific, British Airways, American Airlines and Qantas, Rolls out Tech Upgrades 'to Stay Relevant'" by Danny Lee, South China Morning Post, February 02, 2019.

The global alliance which represents heavyweight airlines Cathay Pacific (CAT), British Airways (BAB), American Airlines (AAL) and Qantas (QAN) has rolled out customer service upgrades to try and stop frequent fliers defecting to rivals. Technology improvements and information sharing to enhance the user experience aim to persuade 225 million customers of the 13 member airlines in the Oneworld (ONW) alliance to stick with those carriers.

Travelers flying with >1 airline in the same journey will only need to check in, obtain all boarding passes and access their itinerary from 1e carrier on line to simplify the experience. 8 million customers embarked on a multi-ticket journey in the past year.

(ONW) is also working on improvements to the customer experience at major airports, which will include alliance-branded lounges. (CEO) Rob Gurney described the changes as a relaunch of the alliance on its 20th birthday. Trips involving >1 airline were previously a hassle as passengers commonly needed to use multiple airline apps to access details of each flight. The technical upgrades will mean (CAT) customers being able to use the company's website or app to access any booking with a (ONW) partner, doing away with the need for login details with each airline.

Oneworld (ONW) is formed of 13 airlines and 30 affiliate carriers and celebrated its 20th birthday in London, where it unveiled a raft of changes. The grouping is 1 of 3 global airline pacts. The others are Star (SAL) Alliance, which counts Singapore Airlines (SIA) as a top member, and Skyteam (STM), which has Delta Air Lines (DAL).

"We are effectively relaunching (ONW), and it's designed to have relevance for stakeholder groups, our customers and our member airlines," Gurney said. Cathay (CAT) and Qatar Airways (QTA) are the 1st pairing to have started using new digital functions that enable the upgrades. (CAT) (CEO) Rupert Hogg told an audience in London that (ONW) was on the right path to keep the grouping relevant and contemporary. The 3 alliances have increasingly become less important as airlines prefer to partner with carriers outside their alliances where it makes sense for business. Questions have been asked about their future with the strength of budget and non-alliance airlines.

These problems were acknowledged by Willie Walsh, (CEO) of the International Airlines Group (IAG), the parent company of British Airways (BAB). "For this alliance to stay relevant in an ever-changing world, we have got to change and evolve," he said.

(ONW)-branded lounges are also being planned (at least 3 by 2020) to boost (ONW)'s appeal, especially at airports where there is no home carrier with the alliance. Proposed locations are being narrowed down to airports where the grouping and its members have proposed sharing check-in desks to improve service quality.

(ONW) said the new Beijing Daxing International Airport, due to open later this year, was a good opportunity. (10) members currently fly to Beijing operating 175x-weekly. "We've been engaged in discussions with the Chinese authorities and the airport operators about co-locating in the new airport. Not every airline will be there. But we believe we will have a critical mass of (ONW) airlines," Gurney said.

The (ONW) alliance's members currently serve 1,110 airports in 180 territories, with 14,000 daily flights carrying 550 million passengers annually on a fleet of 3,500 airplanes. "Airline Alliance Oneworld, Which Represents Cathay Pacific, British Airways and Qantas, Rolls out Tech Upgrades 'to Stay Relevant'" by Danny Lee, South China Morning Post, February 02, 2019.

The global alliance which represents heavyweight airlines Cathay Pacific (CAT), British Airways (BAB), American Airlines (AAL) and Qantas (QAN) has rolled out customer service upgrades to try and stop frequent fliers defecting to rivals. Technology improvements and information sharing to enhance the user experience aim to persuade 225 million customers of the 13 member airlines in the Oneworld (ONW) alliance to stick with those carriers.

Travelers flying with >1 airline in the same journey will only need to check in, obtain all boarding passes and access their itinerary from 1e carrier on line to simplify the experience. 8 million customers embarked on a multi-ticket journey in the past year.

(ONW) is also working on improvements to the customer experience at major airports, which will include alliance-branded lounges. (CEO) Rob Gurney described the changes as a relaunch of the alliance on its 20th birthday. Trips involving >1 airline were previously a hassle as passengers commonly needed to use multiple airline apps to access details of each flight. The technical upgrades will mean (CAT) customers being able to use the company's website or app to access any booking with a (ONW) partner, doing away with the need for login details with each airline.

Oneworld (ONW) is formed of 13 airlines and 30 affiliate carriers and celebrated its 20th birthday in London, where it unveiled a raft of changes. The grouping is 1 of 3 global airline pacts. The others are Star (SAL) Alliance, which counts Singapore Airlines (SIA) as a top member, and Skyteam (STM), which has Delta Air Lines (DAL).

"We are effectively relaunching (ONW), and it's designed to have relevance for stakeholder groups, our customers and our member airlines," Gurney said. Cathay (CAT) and Qatar Airways (QTA) are the 1st pairing to have started using new digital functions that enable the upgrades. (CAT) (CEO) Rupert Hogg told an audience in London that (ONW) was on the right path to keep the grouping relevant and contemporary. The 3 alliances have increasingly become less important as airlines prefer to partner with carriers outside their alliances where it makes sense for business. Questions have been asked about their future with the strength of budget and non-alliance airlines.

These problems were acknowledged by Willie Walsh, (CEO) of the International Airlines Group (IAG), the parent company of British Airways (BAB). "For this alliance to stay relevant in an ever-changing world, we have got to change and evolve," he said.

(ONW)-branded lounges are also being planned (at least 3 by 2020) to boost (ONW)'s appeal, especially at airports where there is no home carrier with the alliance. Proposed locations are being narrowed down to airports where the grouping and its members have proposed sharing check-in desks to improve service quality.

(ONW) said the new Beijing Daxing International Airport, due to open later this year, was a good opportunity. (10) members currently fly to Beijing operating 175x-weekly. "We've been engaged in discussions with the Chinese authorities and the airport operators about co-locating in the new airport. Not every airline will be there. But we believe we will have a critical mass of (ONW) airlines," Gurney said.

The (ONW) alliance's members currently serve 1,110 airports in 180 territories, with 14,000 daily flights carrying 550 million passengers annually on a fleet of 3,500 airplanes.

News Item A-2: "Qantas Cancels Remaining Airbus A380 Orders" by
Adrian Schofield, (ATW) Plus, February 7, 2019.

Qantas (QAN) has canceled its remaining 8 Airbus A380 orders, after stating for years that it did not intend to take delivery of these aircraft. The 8 A380s will be removed from the Airbus orders and deliveries website when it is next updated. The move comes as no surprise to Airbus (EDS) or the airline industry (Qantas executives have often said that while they are happy with the 12 aircraft already delivered, they do not see a role for any more).


Click below for photos:
QAN-707-138 - 2013-09
QAN-707-138 N707JT Sydney 2010-11.jpg
QAN-737-800 - 2012-11
QAN-737-800 - 2013-11
QAN-737-800 - JAMES STRONG - 2014-11
QAN-737-800 VH-VXM-2017-07.jpg
QAN-737-800 VH-XZJ 2018-05.jpg
QAN-747-400 FINAL FLIGHT.jpg
QAN-747-400 VH-OEJ-2017-08.jpg
QAN-747-400 VH-OJS-2017-11.jpg
QAN-767-300ERF VH-EFR 2018-05.jpg
QAN-787 2017-08.jpg
QAN-787 VH-ZNE 2018-09.jpg
QAN-787-9 - 2016-12.jpg
QAN-787-9 VH-ZNC LHR 2018-09.jpg
QAN-787-9 VH-ZND 2019-01.jpg
QAN-787-9 VH-ZNF Boomerang 2018-11 j.jpg
QAN-A330-200 - 2015-07.jpg
QAN-A380 GO WALLABIES-2017-11.jpg
QAN-A380 VH-OQB-2017-02.jpg

February 2019:

0 707-138 (VH-EBA, 1959-02 - SEE PHOTO - - "QAN-707-138 - 2013-09").

14 717-200 (55055, VH-NXH, 2015-12; 55166, VH-NXJ, 2015-11; 55168, VH-NXR, 2015-11), EX-(IMU), JETSTAR (IMU) OPERATIONS 2004-05, 125Y.

5 717-200, LEASED, 125Y:

0 727-276. 3 RETIRED.

0 737-3Q8 (CFM56-3C1) (2355-26282, 5W-ILF), EX-(PLY), (ILF) LEASED 2001-09, RETURNED 2003-09. 8C, 108Y.

0 737-33A (CFM56-3) (1654-24030, /89 VH-CZS; 1831-24460, /90 VH-CZR; 2600-27267, /94 VH-CZU; 2069-25119, /91 VH-JNE), (AWW) LEASED 2001-10. ALL 4 TRANSFERRED TO (QNZ).

0 737-376 (CFM56-3C1), 1 LEASED TO (SOI) (3X-WEEKLY), 23478 TO (QNZ) 2003-02. 23477 WET-LEASED TO (VAN) 2003-03. 24437 WET-LEASED T0 (NAU) UNTIL 2003-07. 23477; 23483; 23484; SOLD TO (CML) 2003-08. 24390 TO (QNZ) 2003-10. 23491 TO (QNZ) 2004-01. 24296; 2004-05. 24295; & 24297; 2004-10. 24298 TO (QNZ) 2005-03. 23479; 23485; 23487; 23489; SOLD TO (CML) 2005-06. 8C, 108Y.

0 737-376 (1286-23486, /86 VH-TAU), TRANSFERRED TO (QNZ) 2002-10. 8C, 108Y.

0 737-4L7 (CFM56-3C1) (2517-26961, /93 VH-TJW "SHARING"), WET-LEASED TO NORFOLK JET (NOA). RETIRED BY END OF 2013. 150Y.

0 737-476 (CFM56-3C1) (1820-24430, /90 VH-TJE "KOOKABURRA;" 2829-28152, /96 VH-TJZ "INTEGRITY;"), 1 LEASED TO (VAN) (3X-WEEKLY). 28152; RETURNED FROM (QNZ), EX-(ZK-JTS). ALL TO BE RETIRED BY END OF 2013. 150Y.

80 +43 OPTIONS 737-838 (CFM56-7B24) (1042-29551, VH-VXA "YANANYI DREAMING" & "BROOME;" 1063-29552, VH-VXD; 1096-29553, VH-VXF; 1045-30101, VH-VXB "ABORIGINAL CS;" 1049-30897, VH-VXC "GIPPSLAND;" 1071-30899, /02 VH-VXE; 1102-30901, VH-VXG; 1137-33478, VH-VXH "WARMAMBOOL;" 1141-33479, VH-VXI "OODMADATTA;" 1157-33480, /02 VH-VXJ "COOBER PEDY;" 1160-33481, /02 VH-VXK "KATHERINE;" 1324-33722, /03 VH-VXP "LOGAN;" 33723, VH-VXQ "RETRO ROO 11"; 33760, VH-VXT, 2014-01; 33761, VH-VXU, 2014-01; 33763, VH-VYB; 1612-33991, VH-VYC "ARNHEM LAND;" 1706-33992, VH-VYD, 2005-05; 1712-33993, VH-VYE, 2005-05; 1727-33994, VH-VYF, 2005-06; 1736-33995, VH-VYG, 2005-06; 1815-34180, VH-VYH, 2005-11; 1840-34181, VH-VYI, 2006-01; 1842-34182, VH-VYJ, 2006-01; 1846-34183, VH-VYK, 2006-01; 1854-34184, VH-VYL, 2006-01; 34186, VH-VZT, 2011-10; 3910-34188, VH-VZH, 2012-01; 34191, VH-VZO, 2015-05; 34193, VH-VZR, 2015-06; 2502-34195, VH-VZA, 2008-02; 2989-34200, VH-VZF "TAMWORTH;" 3006-34201, VH-VZG "MILDORA;" 3048-34202, VH-VZH "KATHERINE MANSFIELD" 2009-10; 34882 "CHARLEVILLE;" 34883 "MOUNT OTHAM;" 34884 "FREEMANTLE;" 34885 "KAKADU;" 39362, VH-VZP, 2015-06; 39366, VH-XZK "COOK;" 39371, VH-XZG "BUNGENDORE" 2013-06; VH-XZJ "MENDOOWOORRJI;" 44573, VH-XZL, 2014-07; 44574, VH-VXM, 2014-08; 39445, VH-VZZ, 2013-06; VH-XZP "JAMES STRONG" 2014-11). WITH WINGLETS. 12C, 156Y.

0 747SP-38 (505-22495, /81; 537-22672, /81). 22672 SOLD AND STORED AT MOJAVE. LAST 1 IN 2001-12. PARTED OUT.

0 747-238B (RB211-524D4) (464-22614, /80 VH-EBR). 22145 DONATED TO QANTAS FOUNDERS OUTBACK MUSEUM 2002-11. 22616 WFU AT MARANA 2003-01. 34C, 399Y.

0 747-238BC (RB211-524D4) (409-21977, /79; 483-22615, /80). 22615 PARTED OUT 2002-08 AT MARANA. 34C, 399Y.

0 747-338 (RB211-524D4) (VH-EBU "NALANJI DREAMING" - SEE PHOTO, 23688 WET-LEASED TO 1 MONTH (APC) 2003-03. 23224 WFU AT AVALON 2003-06. 23408 WFU AT AVALON 2003-07. (VH-EBV) WET-LEASED TO (GIA) FOR HADJ 2005-12. LAST 4 WFU AT MARANA 2009-01. 52C, 370Y.

0 747-436 (RB211-524H2), (BAB) 17 MONTH LEASED 12/00 (779-24050, /90 VH-NLH). RETURNED.

0 747-438 (RB211-524G/H-T), (/89 VH-OJA "CITY OF CANBERRA;" 807-24806, /90 VH-OJH "CITY OF DARWIN" - - SEE ATTACHED PHOTOS - - "QAN-1999-09-INCDT-A/B/C/D;" 857-25067 /90 VH-OJK "NEWCASTLE" INVOLVED IN INCIDENT - - SEE ATTACHED PHOTO - - "QAN-INCDT-2008-07;" 1233-25565, /99 VH-OJT "FRASER ISLAND;" 1239-25566, /00 VH-OJU) (751-24406, /89 VH-OJC "CITY OF MELBOURNE") (1321-32912, /03 VH-OEH). 25151; RETURNED TO SERVICE AFTER STORAGE 2010-06. 25067; SOLD TO MAXAIR (NGL) 2011-06. 1ST 747-400 (VH-OJA) "CITY OF CANBERRA" RETIRED 2015-03. 14F, 65C, 315Y.

1 747-48E (CF6-80C2B1F) (983-25778, /93 VH-OEB), EX-(AAR), "D" MAINTENANCE CHECK AT (SIA). 14F, 79C, 265Y.

2 747-4H6 (CF6-80C2B1F) (808-24836, /90 VH-OEC; 858-25126, /91 VH-OED), EX-(MAS) (1998-10). 14F, 79C, 265Y.

6 747-438LR (CF6-80C2) (1308-32909, /02 VH-OEE; 1313-32910, /02 VH-OEF; 1320-32911, /02 VH-OEG; 1321-32912, /03 VH-OEH; 1330-32913, /03 VH-OEI; 1331-32914, /03 VH-OEJ). 14F, 79C, 265Y.

0 747-400FLR, (ILF) LEASED.

0 767-238ER (JT9D-7R4E), ALL (ETOPS) EQUIPPED, 5 SOLD TO (RAA) 2000-08. 23304 WFU AT MARANA 2003-07. 23306 SOLD TO LEHMAN BROTHERS 2004-01. 23309 SOLD TO BLUE STAR AVIATION 2004-05. 23402 WFU 2004-06 & 23403 SOLD TO BLUE STAR AVIATION 2004-07. 23403; SOLD BY BRISTOL ASSOCIATES: (202) 682-4000. 30C, 175Y.


0 767-33AER (PW4056) (591-27909, /95), EX-(LAL), RETURNED TO (AWW) 2002-10.

0 767-33AER (CF6-80C2) (643-28495, /97 VH-821), EX-(CBD), RETURNED TO (AWW) 2002-10.

0 767-336ER (RB211-524H) (288-24337, /90 VH-ZXA; 293-24338, /90 VH-ZXB; 298-24339, /90 VH-ZXC; 363-24342, /91 VH-ZXD; 364-24343, /91 VH-ZXE; 365-25203, /91 VH-ZXF; 419-25443, VH-ZXG), (BAB) LEASED. 30C, 223Y.

0 767-338ER (CF6-80C2B6), 24407 WET-LEASED TO (NIU) 2001-12. 25246; 25274; 25316; 25363; WET-LEASED TO (AUS) 2002-10 & 2002-11. 24316 WET-LEASED TO (APC) 2003-05. 30186 TO (AUS) 2003-10. 23224; 23408; RETURNED TO SERVICE. (ETOPS). 25C, 204Y.

3 767-338ER (CF6-80C2B6) (28154, VH-OGQ "BIRDSVILLE;" 28725, VH-OGS "ROMA;" 796-30186, /00 VH-OGV). 30C, 223Y.

0 767-375ER (24307; 25120), (ACN) WET-LEASED 2001-10. 2 RETURNED.

0 767-38EER (25347; 25404), (ACN) WET-LEASED 2001-10. 2 RETURNED.

3 + 10 ORDERS (2013-09) 787-8 DREAMLINER (GEnx) (36202, /13 VH-VKA, 2013-09; 36203, /13 2013-11; 36204, /13 2013-12), (IMU) OPERATIONS:


0 DC-10-30F (CF6-50C2), (GMN) WET-LEASED.


68/40 ORDERS A320/A321:

0 A320-200, (ANS) WET-LEASED 2001-09. 10 RETURNED.

3 A320-232 (V2500) (2197, 2004-08) (SIL) LEASED, FOR JETSTAR (IMU) OPERATIONS. 177Y.

32/31 0RDERS A320-232 (V2500) (2292, 2004-10; 2299, 2004-11; 2322, 2004-11; 2329, 2004-12; 1336, 2004-12), FOR JETSTAR (IMU) OPERATIONS. 177Y.


5 A330-201 (CF6-80E1A2) (508, /02 VH-EBA "CRADLE MOUNTAIN" 2014-09; 522, /02 VH-EBB "ALBANY;" 506, /03 VH-EBC "SURFERS PARADISE;" 513, /03 VH-EBD "TRARALGON" 2014-09; 564, VH-QPC "BROKEN HILL" 2004-01), WET-LEASED TO (IMU) 2006-12. 38C, 265Y.


1 A330-202 (CF6-80E1A2) (898, VH-EBI, 2008-02; 1094, VH-EBN, 2010-02), (TCI) LEASED 2008-02. 38C, 265Y.

1 A330-202 (1198, VH-EBQ), RETURNED FROM JETSTAR (IMU) 2014-01. 38C, 265Y.

5 A330-203 (CF6-80E1A2) (593, VT-QPE, 2007-12; 595, VT-QPF; 603, VT-QPG), 38C, 265Y.

3 A330-203 (842, VH-EBE, 2007-06; 853, VH-EBF, 2007-08; 976, VH-EBL "WHITSUNDAYS" 2008-12), WET-LEASED TO (IMU). 38C, 265Y.

10 A330-303 (CF6-80E1A2) (553, /03 VH-QPA, 2004-12; 558, /03 VH-QPB "FREYCINET PENINSULAR;" 564, /03 VH-QPI; 574, VH-QPD "PORT MACQUARIE" 2004-10; 593, VH-QPE "PORT LINCOLN" 2004-06; 595, VH-QPF "ESPERANCE" 2004-06; 695, VH-QPH, 2005-10; 705, VH-QPI, 2005-10; 712, VH-QPJ, 2005-12), 36C, 278Y.

12 A380-841 (TRENT 970) (VH-OGC; 014, VH-OQA "NANCY-BIRD WALTON" 2008-09; 015, VH-OQB; 022, VH-OQC "PAUL MCGUINESS", 2008-12; 026, VH-OQD, 2009-08; 027, VH-OQE "LAWRENCE HARGRAVE" 2009-12; 029, VH-OQF, 2010-01; 055, VHOQI, 2011-01; 067, VH-OQK, 2009-08; 070, VH-OQL; CANCELED REMAINING 8 ORDERS 2019-02), 3 CLASS, 450 PAX, INCLUDING 332Y.

PAINTING OF 1ST A380 Qantas:

2 F 27.

0 B AE 146 (E2028, EX-(BMA), 2 B AE LEASED 2000-06.








3 FOKKER F 100, 2016-06.

0 SAAB 340, (ANS) WET-LEASED 2001-09. 9 RETURNED.


Click below for photos:
QAN-1-Alan Joyce - Tim Clark-2012-06-A.jpg
QAN-1-Alan Joyce - Tim Clark-2012-06-B.jpg
QAN-1-Alan Joyce - Tim Clark-2012-06-C.jpg
QAN-1-Alan Joyce-R - Doug Parker-2015-06.jpg
QAN-2-ALAN JOYCE - 2014-12-Z
QAN-4-John Gissing - C - 2017-12.jpg


































(tcrabtree@qantas.com.au) (SYDDEQF) (2001-02).









(averkerk@qantas.com.au) (SYDDEQF) (2000-09).







































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