QANTAS eyes Asian expansion, makes big executive payouts
Updated
Australian airline QANTAS is getting criticised for big executive payouts - but the airline is more focused on trying to buy in to the biggest shake-up in Asian aviation in a decade.
The company's annual report shows former CEO Geoff Dixon retired from Qantas in November last year and took home almost eleven million Australian dollars for just nine months work.
But an even bigger challenge is moves to get into the expanding North Asian aviation market - and there's not a word on that in the annual report.
Presenter: Karon Snowdon
Speakers: Derek Sadubin, Chief Operating Officer at the Centre for Asia Pacific Aviation; Steve Purvinas, General Secretary of the Aircraft Engineers Union
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Karon Snowdon: The size of Geoff Dixon's pay brought criticism from shareholders facing falling returns and unions facing job cuts.
But QANTAS brushed those concerns aside saying in a statement the Dixon payments were in line with employment agreements.
The fuss will be a short term blip in the bigger picture for QANTAS.
In his annual report Chairman Leigh Clifford notes the estimated 9-Billion US dollars collectively lost by the world's airlines in this calender year.
And if the financial crisis has not been good for airlines generally, its been hell for Japan's major carrier Japan Airlines.
The struggling Japanese company is in desperate need of a white knight - one carrying saddle bags full of cash.
SADUBIN: Japan Airlines probably needs two or three billion dollars.
KS: Derek Sadubin is the Chief Operating Officer at the Centre for Asia Pacific Aviation.
He says saving Japan Airlines or JAL, will involve the biggest shakeout of Asian aviation in a decade.....
One QANTAS can't afford to ignore.
SADUBIN: The Japan airlines issue stems from the fact the US government and the Japanese Government are negotiating an open skies agreement whereby a lot of restrictions on airlines flying into those markets and beyond could be removed. If you can open up the Japanese market you can really unlock the potential in North Asia and if you unlock that potential in North Asia you've opened one of the biggest aviation markets in the next 20 years and that's why there's considerable buyer interest.
KS: Japan Airlines has recorded a one billion dollars loss for its first quarter with a full year loss - its fourth in five years inevitable.
The new Japanese Government can't afford - politically to bail it out so its looking for a partner and is in talks with America's Delta Air and Air France of the Skyteam Alliance.
Their competition in the air partnership stakes is One world ..of which JAL is a member along with the other main players Qantas, Amercian Airlines and British Airways.
Derek Sadubin says Delta has more to offer the Japanese.
SADUBIN: You know everyone is saying the existing alliance partners should have the upper hand but at the end of the day Japan Airlines needs a lot of money and I think the money will talk. But look I think anything can happen in this environment and if the decision within the grouping is its too important to lose JAL then Qantas and its bankers may have to come to the party as well. Its going really shake down over the nxt 3-4 weks or so so its going to be very interesting to see how it develops.
KS: Its a big stakes game and new chief executive at QANTAS Alan Joyce has confirmed to an Australian national newspaper the Oneworld alliance partners are looking at all options to keep JAL in their club - but there's just three weeks to decide.
Derek Sadubin says at stake is not only the survival of JAL and its huge market potential - in 2006 it carried 58 million passengers.
But he says it will also put pressure on China and Korea to relax their market controls.
SADUBIN: We feel there could be a domino effect in the region.
KS: Whoever wins the once in a decade prize back in Sydney new QANTAS boss Alan Joyce has angry unions to contend with...
Steve Purvinas The General Secretary of the Aircraft Engineers Union says he's also unhappy about this salary even though its not even close to Geoff Dixon's.
PURVINAS: I think it's an obscene outcome if you've got any one person thinking that they're worth three-point-six million dollars a year that's just un-Australian
