Qantas Announces Asia, Japan Carriers on International Losses - BusinessWeek

August 15, 2011, 8:36 PM EDT By Robert Fenner

Aug. 16 (Bloomberg) -- Qantas Airways Ltd., Australia’s biggest airline, will create a full-service carrier in Asia and a budget unit in Japan as it seeks to turn around A$200 million ($210 million) in annual losses at its international unit.

The Asian-based carrier will have a different name and appearance than existing brands, while its budget unit is teaming with Japan Airlines Co. and Mitsubishi Corp. to start Jetstar Japan by the end of 2012, Sydney-based Qantas said in a statement today. The company will cut about 1,000 jobs.

Qantas will revamp its fleet plans for the new structure and order as many as 110 Airbus SAS A320 jets, including 78 fuel-efficient “neo” versions. Chief Executive Officer Alan Joyce is revamping his international operations amid a slump in market share as travelers switch to premium rivals including Singapore Airlines Ltd. and Dubai-based Emirates Airline.

Qantas rose as much as 4.3 percent in Sydney trading, the biggest intraday gain in a month. It was up 2.6 percent at A$1.57 at 10:10 a.m.

The Australian carrier also said today it will delay delivery of its final six A380 superjumbos for as long as six years, leaving it with 12 of the double-deck planes by the end of 2011.

The airline will also switch its South American direct services to Santiago from Buenos Aires, increase flights via Singapore through a venture with British Airways and further develop flights with AMR Corp.’s American Airlines unit though Dallas/Fort Worth.

--Editor: Dave McCombs, Neil Denslow

To contact the reporter on this story: Robert Fenner in Melbourne rfenner@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

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