Company Watch - Qantas Airways.

For more company news, data and analysis, please go to: http://www.airguideonline.com/professional.htm Jun 26, 2006

The Boeing 777-200LR still is on high priority lists at Qantas and Singapore Airlines, according to internal sources at both carriers. Qantas is impressed with the 747-8, but under its rules the aircraft may not be able to perform the Dallas-Sydney mission in all seasons. Boeing has been working with Qantas since mid-2005 to refine the 777-200LR to perform a variety of missions including London-Sydney nonstop and Sydney-Dallas. Singapore Airlines has been looking to the type to replace its five A340-500s, with reports suggesting that its nonstops to New York and Los Angeles are not profitable. Boeing has been looking at a lighter-weight interior borrowed from the 787 to make the business case more compelling, and some progress has been made. Both airlines are expected to announce decisions soon, although they "are not imminent." Jun 22, 2006

Qantas will scale up its aggressive cost reduction program following Wednesday's 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%. In a statement to the Australian Stock Exchange, CEO Geoff Dixon indicated that further job cuts may be necessary despite the progress made with the carrier's five-year, A$3 billion cost and efficiency improvement agenda. He said Qantas already faces A$153 million in restructuring costs associated with 2,000 recent redundancies and the closure of its heavy maintenance base in Sydney (ATWOnline, March 10). The loss of a further 1,000 management positions will be accounted for in next year's results. Jun 23, 2006

Billion-dollar fuel increase darkens Qantas forecast. Qantas revealed yesterday 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. Jun 22, 2006

Qantas 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 Qantas catering. Jun 22, 2006