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Ansett Australia has signed a codesharing agreement with Dutch carrier KLM covering Ansett flights into Sydney from Melbourne, Brisbane and Canberra which connect with KLM's three times a week services to Amsterdam. The arrangement was due to come into effect from late March. (Rob Finlayson)
Airline Affairs
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Qantas On Target For Prospectus Profit
The half year profit announced by Qantas in February provided the share market with confidence, showing the fully privatised company headed for its full year target in June of $400m before tax, reports Danielle Doney. The $246.5 million operating profit to December 31 1995 was a 21.5% increase on the corresponding period for 1994, lifting the profit after tax to $148m. Qantas’ achievement of the profit was based largely on its widespread cost cutting and cost containment programmes which contributed $150m to the bottom line. Further improvements in aircraft utilisation, up from 11 hours per day to 11.7, and reductions in fuel costs and landing fees also enhanced the bottom line result. The retirement of debt, targeted as a priority for the coming three years, improved the debt to equity ratio of the company by five points to 63:37. Healthy growth in the domestic network contributed over $93m to the operating profit for the period. Qantas continued market dominance, gaining a 53% market share in November 1995, with an average year to date share of 53.4%. Contributions from international operations, however, decreased slightly from $164.4m to $163.3m in the first half, as a result of increased competition from Ansett and beyond rights granted to Air New Zealand to the United States and northern Asia. Market share in the international networks showed evidence of the effects of competition, with the airline’s lowest market share in three years, at 39.8%. At the Sydney press conference, Chairman Gary Pemberton said, “The result is pleasing and in line with the forecast included in the prospectus. Although revenues for the half year were below forecast, higher than anticipated cost reductions ensured the profit target was achieved.” Mr Pemberton stated cautiously that he expected the full year target to be achieved. “While this is a good result, Qantas remains committed to its continuing push for further gains in both efficiency and productivity to improve its competitive position,” Mr Pemberton said. He also dismissed speculation of large aircraft orders and route expansion stating that no major announcement would be made until the company had optimised its balance sheet and achieved the desired cost structure. Managing Director James Strong is pushing a $1bn cost reduction programme over the next three years, by finding ways to do things better. Unions have already signalled their disdain at moves to outsource some functions currently undertaken by the company, including the contracting of security and aircraft maintenance. Ansett Australia has signed a code sharing agreement with Dutch carrier KLM covering Ansett flights into Sydney from Melbourne, Brisbane and Canberra which connect with KLM’s three times a week services to Amsterdam. The arrangement was due to come into effect from late March. (Rob Finlayson)
Pacific Transair Startup Still Under A Cloud
After a number of false starts, Pacific Transair was expected to commence operations at press time, having received its CASA Airline Operators Certificate, reports Danielle Doney. Pacific Transair had hoped to originally take delivery of its two 737-200s in December for a mid January startup, a date which has slipped a number of times. The startup is offering an introductory $69 one way fare between Sydney and Brisbane, a fare which will undoubtedly be matched by Qantas and Ansett. With the potential to take up to 2% of that market, both major carriers are in a comparatively strong position to match Transair’s fares.
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