Airlines India, Indian Airlines

Air France (3112.FR) Wednesday announced it will increase its fuel surcharge. The French carrier is the first major European carrier to raise surcharges in recent weeks.
Qantas also said its was looking at developing its air-freight business in the face of Toll Holdings Ltd.’s (TOL.AU) takeover of Patrick Corp. and its Virgin Blue Holdings Ltd. (VBA.AU) unit, Australia’s second-largest airline.
“In air freight, we are doing a lot ourselves already,” Gregg said.
“We already have three 747 freighters we lease and we are converting six 737s to freighters out of (Melbourne’s) Avalon (airport) and they are going to be used in AAE, our air-freight joint venture, and beyond that we are looking at general freight as well.”
Qantas said it will be looking for a land-based freight service to complement its service, he said.
The Sydney-based airline may also consider floating its budget carrier Jetstar, Gregg said.
“We are looking to extend the segmentation in our business but ultimately if you could extract more out of it we might consider it,” he said. “It’s possible but it’s not a hot topic. It’s definitely possible.”
At 0436 GMT shares in Qantas were steady at A$3.05.

Australia’s Qantas Airways said it will enforce tougher security checks and baggage controls for all flights leaving from and transiting through Britain due to the heightened terror alert.

The British government said today that security services had foiled a plot to bring down a number of aircraft through mid-flight explosions.

Qantas said passengers would only be allowed to take basic items into the cabin, such as passport, wallets and tickets, preferably in a transparent plastic bag.

The new security requirements do not affect Qantas domestic or other international operations.

Qantas operates four services each day from London’s Heathrow to Australia, and also carries passengers from Australia and Asia into Heathrow for onward travel.

The Australian government is favoring Qantas ahead of the national interest, according to few tourism and airport players in Australia, reports the travelwirenews.com website.

The development comes at a stage when the pressure on the Australian government is growing to open up Australia’s international airline routes to more competition and not to put the interests of Qantas before the nation’s tourism industry and airports.

Following the Australian government’s rejection of Singapore Airlines’ application to gain access to the Australia-US route in February, and the indecision over whether to grant several Middle Eastern and Asian airlines additional flights into Australia, Qantas is accused of being protected at the expense of others, reported Sydney Morning Herald.

Recently, Melbourne Airport criticized the government for barring Singapore Airlines on the trans-Pacific route. Then Queensland Tourism Industry Council and the Gold Coast Tourism Bureau also openly backed Brisbane Airport’s calls for Asian and Middle Eastern airlines to be granted more access to Australia. It is being said that this is the first time airport and tourism bodies in Australia have led such a public push in favor of liberalization.

An official said: “To date, we seem to be worrying about a profit glitch for Qantas instead of looking at the enormous benefit that extra tourists would have for Australia.”

Brisbane Airport boss Koen Rooijmans argues Queensland is “potentially losing” billions of tourist dollars a year. He says the Australian government is blocking competition on certain international routes and Australians are missing out on significantly cheaper airfares as a result.

“This is despite Qantas’ low-cost offshoot, Jetstar, recently announcing airfares to a handful of destinations in Asia at around 20 percent below the normal market rate - without meals and blankets, mind you.”

Rooijmans argues Australia may be missing out on a boom in international visitors.

“I think it’s important that you understand in Australia that this issue has far more implications than one airline, any airport and the implications for tourism,” he said.

QANTAS’S board has moved to quash any talk about the immediate future of chief executive Geoff Dixon by offering him a contract with no expiry date and a big superannuation payment.
The agreement, announced yesterday by chair Margaret Jackson, will see Mr Dixon, pictured, move from a three-year contract expiring next July to one requiring Qantas (qan.ASX:Quote,News) to give him a year’s written notice or pay in lieu of notice if it wishes to terminate his services.

Mr Dixon, who has previously said he wants to stay until the Beijing Olympics in 2008, must give Qantas (qan.ASX:Quote,News) six months’ notice. Other aspects of his contract do not change, but he will receive a $7.66 million payment into his superannuation scheme on signing.

The payment settles previously disclosed entitlements built up in earlier contracts. Qantas says it represents no increase in benefit to Mr Dixon beyond what was already preserved and he does not receive a pay rise for signing the new contract.

However, his $2.31 million in fixed annual remuneration remains subject to a yearly review.

Short, medium and long-term incentives also remain the same.

Mr Dixon is joined on the ongoing contract by chief financial officer Peter Gregg, tipped in some areas as Mr Dixon’s successor and whose contract expires this year.

The new deals are likely to be welcomed by the market as the two have spearheaded the airline’s attempts to reduce costs by $3 billion over five years.

Qantas is battling spiralling fuel costs which are expected to add $1 billion to costs this financial year and drag down the annual results when they are announced next week.

It warned in June that full-year pre-tax profit for 2005-06 would slump 27 per cent to “around $670 million” after restructuring costs, down sharply on the $914.3 million for 2004-05.

Yesterday’s move was prompted by a board desire to remove speculation about Mr Dixon’s future as his contract ended and to place the airline’s executive deals on a more modern footing.

The contracts are becoming a standard practice for all Qantas executives.

“I think the objective is just to tidy up things from past contracts and move to an ongoing contract,” Ms Jackson said.

She said that while Mr Dixon, 66, was older than the average chief executive, he was “very energetic, young at heart and enjoys what he’s doing”.

He was an outstanding chief executive whose leadership and experience had been invaluable since he took on the role in March 2001 and who had helped Qantas outperform most of its peers.

Ms Jackson said she did not expect to be seeking a replacement until 2008 “and beyond”.

The Travel Agents Association of New Zealand (TAANZ) is opposing to the Code Share proposal between Qantas and Air New Zealand [ NZX : AIR ] .

The association argues that code sharing between the airlines will be anti-competitive and says that the Minister of Transport Michael Cullen does not have the jurisdiction to authorize such an arrangement.

According to TAANZ the part of the the Civil Aviation Act invoked - Section 88 - was never intended to provide airlines with a protection from the anti-competitive provision of the Commerce Act.

TAANZ says it fears that the code-share would result in an increase in the cost of trans-Tasman airfares and a dramatic reduction in competition

It says that an inevitable consequence of the Minister approving the TNA would be that a significant number of New Zealanders would pay considerably more to travel to and from Australia.

“Qantas and Air New Zealand together account for around 80 per cent of passengers flying across the Tasman and, on a number of routes have no competition. If approved, the TNA will mean that there will be no competition on flights between Wellington-Sydney, Wellington-Melbourne, Auckland-Adelaide, Christchurch-Coolangatta, and all flights from Queenstown.” says Paul Yeo, chief executive of TAANZ.

TAANZ’s position is set out in its submission to the Ministry of Transport lodged yesterday.
2-Aug-2006