Company Watch - Qantas Group.

For more company news, data and analysis, please go to: http://www.airguideonline.com/professional.htm Aug 21, 2006

Analysts expect Qantas to move more routes across to its domestic LCC subsidiaries Jetstar and QantasLink, while Jetstar International, to launch in November, will take a greater role on the international front. Centre for Asia Pacific Aviation Executive Chairman Peter Harbison said that the carrier "has no choice but to continue substituting higher-cost operating models with lower-cost ones and to target growth opportunities to expand top-line revenues. This underscores the importance of Jetstar to the Group's future prosperity." Aug 17, 2006

Changes ahead at Qantas after profit plunge; A380 payment revealed. 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 an 8.6% increase in sales to A$13.64 billion. The fuel hike sent the company's costs up 11.9% to A$12.92 billion. The result was impacted further by one-off restructuring costs of A$182 million under the carrier's Sustainable Future Program and recognition of A$104 million in damages paid by Airbus related to delayed deliveries of A380s. Chairman Margaret Jackson said Qantas's fundamentals were strong despite the difficult operating conditions. Core numbers were positive. Yield rose 5.8% to A10.94 cents, load factor was up 0.7 point to 77%, capacity increased 3.6% to 118.07 billion ASKs and passenger numbers grew 4.3% to 34.1 million. Aug 17, 2006

Qantas CEO Geoff Dixon said the carrier's future depends upon achieving further savings of A$1.5 billion through the Sustainable Future Program over the next two years, most of which will come through labor cuts and productivity increases. Firing a warning at the airline's unions, he said, "Qantas could not be satisfied with incremental change. It needed to make fundamental structural change on a much greater scale than it had in the past," adding that fuel and people now represent around 60% of the group's operating costs and many airlines are achieving substantial cost improvements through Chapter 11 bankruptcy protection, consolidation, mergers and government support, avenues not available to Qantas. Aug 17, 2006

Qantas to launch domestic cargo subsidiary. Qantas plans to launch a domestic airfreight subsidiary in October called Express Freighters Australia.The airline said yesterday that the new subsidiary will wet-lease 737-300 converted freighters to Australian air Express, a Qantas/Australia Post joint venture, under a 12-year contract. The dash 300s will be converted to freighters by Qantas Engineering in Avalon. Qantas carries domestic cargo in passenger plane bellies but does not operate domestic freighters, although it wet-leases three 747-400Fs from Atlas Air. National Jet had been providing cargo aircraft for AaE domestic service and Express Freighters Australia will take over that role. AaE also moves cargo within Australia for international operators including TNT. Aug 17, 2006