Virgin Blue is likely to launch an appeal after eight former Ansett flight attendants won an antidiscrimination case, claiming the airline had rejected their applications for jobs on the basis of age. The Queensland Anti-Discrimination Tribunal ruled in favor of the women, aged between 35 and 56, who unsuccessfully had sought jobs with Virgin Blue during the 12 months after Ansett's collapse in September 2001. None of the flight attendants made it past the first interview and they alleged the assessment process for cabin crew positions focused on young and attractive applicants.
Virgin Blue is at the center of a hostile takeover bid involving its major shareholder that could see Richard Branson's Virgin Group re-emerge as the controlling influence in the low-fare airline.
Transport conglomerate Toll Holdings has launched a A$4.6 billion ($3.5 billion) offer for Patrick Corp, holder of a majority 62.4% stake in Virgin Blue. If Tolls succeeds, Patrick's shareholding will be cut to 27% with Virgin Group agreeing to lift its own holding from 25% to 40.6%.
Qantas's ambitions to establish a low-cost beachhead in Asia appear to be hanging in the balance after its Jetstar Asia joint venture confirmed it is in alliance talks with another Singapore-based LCC, Valuair.
The Australian government again deferred a decision on whether to allow Singapore Airlines' entry to the corridor to the US and embarked on a comprehensive review of the local aviation industry, according to newspaper reports.
Prime Minister John Howard advised his counterpart in Singapore, Lee Sien Loong, that the issue of fifth freedom access for SIA to the South Pacific had been put on hold indefinitely because of the proposed ministerial committee inquiry, The Australian newspaper reported.
Singapore Airlines stepped up its lobbying to gain fifth freedom rights between Australia and the US with the release of a report claiming that the lack of competition on the corridor has led to higher fares, limited capacity and deprived the tourism industry of a potential A$126 million ($96.7 million) windfall.
Virgin Blue warned of another challenging year ahead after announcing a 13.2% slide in earnings amid escalating competition from archrival Qantas, high fuel prices and slowing travel demand. CEO Brett Godfrey said the LCC has entered 2005-06 "behind the eight ball" after returning a net profit of A$138.1 million ($104.8 million) for the 12 months to March 31 compared to A$159 million for the previous year. While the result was consistent with market expectations, it represented the first profit fall in Virgin Blue's five-year history in the Australian market.
Virgin Blue abandoned negotiations over a planned low-cost joint venture based in Macau, switching its focus to prospects for an international operation linking Australia with the US.
The airline confirmed that it has pulled out of long-running talks with gaming magnate Stanley Ho's Shun Tak Holdings and Air Macau concerning establishment of an airline to service the rapidly growing South China Delta region. While Shun Tak continues to hold discussions with Air Macau, Virgin Blue said it now is exploring options for a transpacific operation.
Accident investigators are hoping to gain an insight into the cause of Australia's worst air crash in 40 years after retrieving the black box recorders from the wreckage of a regional aircraft in far north Queensland. Fifteen passengers and crew were killed when the Metroliner operated by Transair on behalf of Aero-Tropics Air Services slammed into a cloud-covered mountain on a scheduled flight from Bamaga near Cape York to Cairns Saturday morning.
Australia will resume highly sensitive bilateral talks with Singapore in two weeks with the aim of negotiating an open skies agreement by mid-year. Singapore Transport Minister Yeo Cheow Tong said the governments of both countries will attempt to resolve the issue of Singapore Airlines' securing access to the Australia-US route during the negotiations. Qantas has been lobbying strongly against the move to grant SIA fifth freedom rights, arguing that it does not enjoy reciprocal benefits on routes through Singapore.
Qantas could face another major challenge to its dominance on Australia-US routes with Emirates emerging as a third potential contender for the lucrative transpacific corridor. Emirates Chairman Ahmed bin Saeed Al-Maktoum and President Tim Clark plan to hold discussions with the Australian government this month on prospects for the UAE airline to increase capacity between Dubai and Australia and in the longer term extend services to the US West Coast.
Virgin Group chief Richard Branson has floated plans to establish a second Australian flag carrier in partnership with local investors that will focus on routes to China, Japan and the US by the end of 2005.
In a move that is sure to antagonize Singapore Airlines, Branson said the Australian government should give precedence to the proposed new venture in allocating rights to service the US West Coast. SIA, a 49% shareholder in Virgin Atlantic, is seeking to gain rights to begin Sydney-Los Angeles flights in the middle of next year.
Virgin Blue head Brett Godfrey denied speculation that he will resign following the change in management control of the airline. In a memo to staff, Godfrey said he is happy to continue in his position at least until late next year as long as he retains the support of Virgin Blue employees, shareholders and the board. He also refuted suggestions that the group's international arm Pacific Blue would be scaled back, saying that the subsidiary is profitable, has exceeded expectations and remains an integral part of Virgin Blue operations.
Air New Zealand could pursue a little-known loophole in New Zealand aviation legislation to bypass the competition regulator and establish a codeshare partnership with Qantas on the Tasman. According to the general lawyer for ANZ, John Blair, the New Zealand government has the power to allow the carriers to sell seats on each other's international services under the Civil Aviation Act. However, he said the legislative provision cannot be exercised to extend such an alliance to domestic services.
Virgin Blue, Australia's largest low-cost operator, warned that it faces a further significant decline in net earnings of A$89.2 million ($70 million) for the next financial year if fuel prices remain at current levels. Acting Chairman David Ryan announced that the airline is considering "a range of initiatives" to address the impact of extra costs imposed by the fuel price hike, including introduction of an additional ticket surcharge. Fuel prices have risen 28% in recent months and the carrier has no hedging in place beyond March 31.
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