Airline News

www.Parctel.com: Qantas First class customers will be treated to a range of luxuries from chair-side waiter service to complimentary spa treatments when the airline's new First lounges in Sydney and Melbourne open later this month.

The new flagship lounges, which open on 23 May, have been designed by internationally renowned Australian industrial designer Marc Newson.

Qantas Executive General Manager John Borghetti has described them as "simply the best in the world".

"The services offered in our new lounges will be equal to those found in the world's best five star hotels and restaurants. For example a full concierge service will help customers book a restaurant in any city around the world or get tickets to the latest Broadway musical," Mr Borghetti said.

"Nearly everything has been designed by Marc specifically for the lounges and manufactured by leading international craftsman.

"Even the music has been specially created to complement the atmosphere and function of each area of the lounge."

Features of the Sydney lounge include:

* huge American oak sculptures that separate the lounge space into defined areas;
* a Payot Paris day spa offering a range of complimentary treatments from a 30-minute express energising facial to a 50-minute full body massage;
* a 48-seat open kitchen restaurant with menus by Neil Perry;
* chair-side waiter service throughout the lounge;
* a library stocked with a selection of newspapers and magazines, best-selling books and board games including chess and backgammon;
* a dedicated entertainment zone with banks of plasma screens showing local and international news, sport and weather, and Sony Playstation 3 and Playstation Portable entertainment systems offering a selection of games and movies;
* a vertical garden designed by international botanist Patrick Blanc featuring over 8,400 individual plants;
* luxurious individual marble-lined shower suites with individual stereo volume and lighting controls, radiant heating to reduce condensation on the mirrors, and luggage racks;
* exclusive furniture and luxurious finishes including leather lounge chairs, recliners, and sofas by Italy's Poltrona Frau, dining chairs and tables by Cappellini, Tai Ping wool carpets from Hong Kong, marble from Carrara and quartzite from Switzerland; and
* state-of-the-art business facilities with 11 PC workstations, complimentary wireless internet access, power and data points throughout the lounge and two private work suites with conference facilities and plasma display screens.

"Lounges are an important point of differentiation for long haul international travellers, which is why we have drawn on the knowledge of world leading experts and brands to deliver the most luxurious atmosphere for our customers.

"The lounges will be managed by luxury hotel group Sofitel with all staff undergoing specialist training through its Acadamie Accor hotel school.

"At the same time we are launching a new premium check-in service at Sydney and Melbourne international terminals, with First customers checked in prior to arriving at the airport and greeted at the kerb by a Qantas First Host and porter," Mr Borghetti said.

"These initiatives are part of a progressive luxury product upgrade being rolled out in anticipation of the airline's Airbus A380 fleet being delivered from 2008."

The First Lounge is located on level four of the Sydney International Terminal and was designed to comply with both Flying Star Feng Shui and classic Feng Shui elements.

www.Parctel.com: Qantas today signed an investment agreement with the State Capital Investment Corporation (SCIC), the investment holding arm of the Vietnamese Government, to purchase a 30 per cent stake in Pacific Airlines, Vietnam's second largest carrier.

The Chief Financial Officer of Qantas, Mr Peter Gregg, said Qantas would partner with SCIC to manage this investment, with completion expected within the next few months.

"This will be an important investment for the Qantas Group, supporting Jetstar's growth strategy and enabling us to extend our reach in South East Asia, where we have been actively exploring opportunities," Mr Gregg said.

"Vietnam offers great growth potential for aviation. It has a large and growing domestic market and is increasingly popular as a tourist destination."

Dr Le Thi Bang Tam, SCIC's Chairwoman, said SCIC chose Qantas as the strategic partner for Pacific Airlines because Qantas was one of the best airlines in the world. In particular, Qantas had developed Jetstar into one of the most successful low-cost carriers in Asia, she said.

Mr Gregg said the Qantas Group would work with Pacific Airlines and SCIC to develop a new business plan for the carrier, which currently operated a fleet of single-class B737-400 aircraft on domestic routes in Vietnam and international services between Vietnam and Taiwan.

"Pacific Airlines' strategy is to reposition itself as a low cost carrier and expand its operation both within Vietnam and internationally. The Qantas Group is uniquely placed to help implement this approach.

"We are currently working closely with the management of Pacific Airlines to harmonise its operations with Jetstar and explore opportunities for further growth.

"We will be actively involved in the ongoing management of the company through Board representation and key management appointments," he said.

Mr Gregg said the investment was a natural development for Jetstar, which already had a strong presence in South East Asia through its investment in Jetstar Asia and its own international services between Australia and a range of destinations in the region - including Vietnam.

www.PArctel.com: Qantas will extend its European network to 25 cities when it introduces codeshare services to Budapest, Hungary, with oneworld™ member airline Malev from 30 April.

Qantas Group General Manager Sales and Distribution Rob Gurney said Qantas would codeshare on Malev services between Bangkok and Budapest, and Budapest and Frankfurt. Malev would codeshare on Qantas return services between Sydney and Bangkok.

"The Malev service between Budapest and Frankfurt is timed to connect with the Qantas service departing from Frankfurt to Australia via Singapore, providing customers with additional itinerary choices when travelling between Europe and Australia," he said.

Mr Gurney said customers would benefit from reciprocal Frequent Flyer programs and lounge access, with through checked baggage capabilities planned for introduction later in the year.

Reservations can be made via Qantas on 13 13 13, qantas.com or a licensed travel agent.

Malev serves around 60 destinations in 35 countries, mainly in Europe, including oneworld™ hubs Helsinki, London Gatwick, Madrid, New York and Bangkok. With some 3,000 staff, Malev carried more than three million passengers in 2006. Malev offers two classes of services on all flights - Business and Economy. Its website, Malev.com, is available in Hungarian and English. Malev has codeshare agreements with oneworld™ partners American Airlines, British Airways, Finnair, Iberia and Japan Airlines.

Among the accolades it has received for the quality of its services, it has recently been voted Best Airline in Eastern Europe 2006 by readers of Global Traveler Magazine and has been voted Best Airline of the Year for the past three years running by travel agents, business people and other travellers in a poll by Hungary's Az Utazó (The Traveller) magazine.

www.Parctel.com: Qantas said today that its casual Flight Attendant arrangements were in line with standard industry practice, and had been agreed between Qantas and the short haul division of the FAAA.

Responding to a story in the Sydney Morning Herald and The Age, Qantas Executive General Manager John Borghetti said casual Flight Attendants, who operated on short haul services, were paid a loading in lieu of sick leave, annual leave and long service leave under an enterprise agreement with the FAAA.

"Casual Flight Attendants are also paid exactly the same travelling allowances as other short haul Qantas Flight Attendants," Mr Borghetti said.

He said Qantas mainline operated around 2,500 flights a week across an extensive network in Australia and overseas, using a range of aircraft types.

"To do this efficiently requires considerable flexibility, which is why we have agreements in place with both FAAA divisions with regard to overseas bases, casual Flight Attendants and shared short haul and long haul flying.

"I am surprised to see Michael Mijatov from the Long Haul FAAA criticising the very arrangements agreed to by his union, and strictly adhered to by Qantas," Mr Borghetti said.

He said Qantas had more than 6,000 Flight Attendants in permanent full- and part-time positions, as well as sourcing casual Flight Attendants from Maurice Alexander Management (MAM), and made no apology for matching its cabin crew resourcing to suit its operation.

"The alternative would be an unproductive and inefficient business that would be unable to grow," he said.

In relation to conditions for casual staff, Mr Borghetti said:
* The $49 cheque required for the interview process was for an ASIC security check, was required for all Australian airline employees, and applied to every person applying for work at Qantas;
* Medical checks were required for all Flight Attendants - permanent and casual - as is standard industry practice; and
* First aid certificates and Responsible Service of Alcohol certificates were - again - standard prerequisites for all Flight Attendants.

"Qantas' cabin crew are professional, hard working and respected employees, and they deserve better than to have the Long Haul FAAA - an organisation that is supposed to represent them - circulating misleading and inaccurate information," Mr Borghetti said.

www.Parctel.com: Qantas today announced the formation of a new inbound tourism business, Tour East Australia Pty Limited, to be based in Sydney.

The Chief Executive Officer of Qantas, Mr Geoff Dixon, said Tour East Australia — a wholly-owned subsidiary of Qantas Holidays’ Singapore-based joint venture company, Holiday Tours and Travel (HTT) — would open for business on 1 July.

“Tour East Australia will provide land content, including sightseeing tours and accommodation, for packaging by travel wholesalers and travel companies worldwide.

“It will also provide a comprehensive travel service for the inbound meetings, incentives, conferences and events market, and offer a meet-and-greet airport transfer service for individual and group travellers,” Mr Dixon said.

“HTT has considerable expertise in destination management, including an extensive network of destination management companies under the Tour East brand throughout Asia. The Qantas Group aims to further leverage this expertise as well as strengthen its involvement in growing inbound markets with the establishment of this new Australiabased subsidiary,” Mr Dixon said.

He said the Qantas Group carried more than 1.9 million visitors to Australia in 2006* and that figure was expected to rise by 30 per cent to around 2.5 million visitors by 2010.

“Tour East Australia will offer visitors travelling to Australia a high quality service that complements the extensive Qantas Holidays range for travel to and throughout Australia.

“Over the past 12 months, Qantas Holidays’ inbound business has grown by more than 60 per cent, and we expect the establishment of Tour East Australia to lift this part of our operation to a new level.”

Mr Dixon said Simon Bernardi, currently Qantas Regional General Manager NSW and previously Group General Manager Qantas Holidays, would head up Tour East Australia.

*Australian Bureau of Statistics

www.Parctel.com: Qantas Airways said today it would acquire nine additional Airbus A320 aircraft for use by Jetstar.

The Chief Executive Officer of Qantas, Mr Geoff Dixon, said the new aircraft would be deployed on domestic and short-haul international routes.

"The aircraft will be delivered over a 15-month timeframe from late 2007," he said.

Mr Dixon said Qantas would also boost capacity in the Qantas domestic operations.

"Four Boeing 767-300 aircraft from our international fleet that were due to be sold from mid-2007 will now be transferred to domestic operations.

"The additional capacity for both Jetstar and Qantas, along with previously announced plans for QantasLink, should enable the Qantas Group to maintain its 65 per cent share of the Australian domestic market."

Mr Dixon said the additional A320 aircraft would enable Jetstar to grow on some of its most popular leisure routes including Cairns, Gold Coast, Perth and the Northern Territory.

"Jetstar will also use the new aircraft to look at new destinations within Australia."

www.Parctel.com: Sydney, 15 March 2007

There has been substantial media commentary concerning the current outlook for Qantas. Qantas has also received questions from certain investors on this issue in view of the offer which has been made for Qantas by Airline Partners Australia. In response to these matters Qantas provides the following information to the market.

Outlook for 2007 full year result

As part of the release of its interim results on 8 February, Qantas provided outlook earnings guidance to the market. It anticipated that the full year result for 2007 would be around 30 to 40 per cent higher than last year's result. Qantas today confirms that the full year result is likely to be towards the upper end of this range. This expectation is based on continuing strong demand and yields offsetting cost reduction targets which have not been fully realised in the Engineering and Airport Divisions.

Response to market speculation regarding outlook for 2008

Qantas is aware that there is a broad range of analyst PBT estimates for the year ended 30 June 2008 ranging from approximately $975m to approximately $1.5bn with an average of approximately $1.23bn.

In response to market speculation and queries received from investors, Qantas confirms its outlook expectations for 2008 are in line with average analyst consensus PBT estimates of approximately $1.23bn. Qantas notes that it is yet to assess the impact of, or include any provision in its estimates at this time, in relation to the following:

* The recently announced intention of Tiger Airways to commence services in Australia from late 2007, Virgin Blue's deployment of additional capacity through new Embraer jet aircraft and plans underway for the Qantas Group to secure additional aircraft to meet the new competition and to sustain its market share position within Australia. These developments are likely to have a negative financial impact on Qantas in 2008. Until we know more about pricing, capacity and schedules, we are not in a position to quantify this impact.

* Contingent liabilities relating to Qantas' involvement in alleged price fixing in the air cargo market and other contingent liabilities referred to in the interim results released on 8 February 2007. Qantas does not believe it is possible to quantify any direct or indirect liabilities associated with these matters at this time, but it is possible that they may be significant.

Just as for the 2007 full year outlook, Qantas' 2008 outlook is subject to fuel costs not increasing significantly, demand continuing to grow and the continued success of the Sustainable Future Program in achieving cost savings.

Qantas has now hedged fifty percent of anticipated crude oil requirements for the 2008 financial year at a worst case rate of $US69.64 a barrel for West Texas Intermediate crude (WTI), inclusive of option premium.

Qantas still has $13bn in projected capital expenditure over the next 5 years (from financial year 2008 to financial year 2012 inclusive).

Qantas does not make any forecast of any specific results. Investors should also note that there are many factors that may affect the future performance of Qantas which may be outside the control of Qantas and may not be capable of being foreseen or accurately predicted. Accordingly, actual results particularly in relation to hedge accounting may vary.

www.PArctel.com: Qantas will introduce a new designer amenities collection, created by some of Australia's most recognised creative talent, later this month.

Qantas Executive General Manager John Borghetti said the collection from Australian designers Marc Newson, Collette Dinnigan, Akira Isogawa and Peter Morrissey would be offered to First and Business customers travelling on Qantas international services from 25 March 2007.

"As one of the world's top tier premium airlines Qantas is delighted to be able to showcase Australia's celebrated design talent to our global customers," said Mr Borghetti.

"This new designer collection is the first instalment in a new luxury product strategy, spearheaded by world famous Australian industrial designer Marc Newson who was recently named Designer of the Year at the annual Design Miami event.

"Marc designed Qantas' award-winning Business Skybed sleeper seat in 2003 and has since been guiding all of our product development to create a distinctive style in line with Qantas' premium positioning."

Included in the First amenities collection are:

- Collette Dinnigan-designed floral silk purse for female customers;
- Akira Isogawa-designed, functional and stylish, zippered pod in chocolate suede for men;
- elegant Akira Isogawa pyjamas in soft cotton with matching luxury eyeshade and slippers;
- high quality hydrating products from leading French skincare house Payot Paris; and
- other comfort items, including hair products from renowned Australian hairstylist Kevin Murphy.

Included in the Business amenities collection are:

- highly collectable amenity packs by Marc Newson - blue for women, grey for men;
- moisturising products from Australian skincare range Ultraceuticals;
- soft cotton pyjamas designed by Peter Morrissey and matching eyeshade on selected long haul flights; and
- other comfort items, including Kevin Murphy haircare products.

Mr Borghetti said that as part of an extensive upgrade of its international product, Qantas would also introduce a new range of luxury designer soft furnishings and tableware, including cutlery produced by Alessi and bone china crockery produced by Noritake, in March, followed by further enhancements throughout the year.

"In May we are looking forward to extending our new designer products to our ground operations with the opening of new Marc Newson designed First Lounges in Sydney and Melbourne.

"We believe our new flagship Lounges will be simply the best in the world," said Mr Borghetti.

www.Parctel.com: Qantas Defence Services (QDS) today signed a contract with the Defence Material Organisation to provide support services for the Royal Australian Air Force's (RAAF) fleet of five A330 Multi Role Tanker Transport aircraft.

The Chief Executive Officer of Qantas, Mr Geoff Dixon, said the contract provided for the provision of technical, spares, training and maintenance support to the tanker fleet for the entire period the aircraft remained in service with the RAAF.

"Under this contract, QDS will establish a support organisation at the RAAF Base Amberley in 2008, in preparation for the arrival of the first tanker from Spain," Mr Dixon said.

"This will create new employment opportunities for up to 50 people within the Amberley facility."

The contract follows a successful joint bid in 2004 by EADS CASA and Qantas to provide the RAAF with a tanker version of the A330-200.

Mr Dixon said EADS CASA and Qantas would convert four A330-200s into the RAAF tanker variant in Australia. He said the fifth aircraft, already converted, would be the first delivered directly to the RAAF from Spain.

"Qantas' experience in the operation and maintenance of its own A330 commercial aircraft fleet means the very best skills and expertise will be available in providing future maintenance support to the RAAF's tanker fleet here in Australia."

Mr Dixon said QDS would continue to provide maintenance support for the Australian military from its Richmond, Sydney, Canberra and Amberley maintenance facilities.