Dixon says Qantas would have been in great difficulty
A report in The Herald Sun says that Qantas would have been “in great difficulty” but for the success and profitability of Jetstar, chief executive Geoff Dixon admitted yesterday.
Mr Dixon said Jetstar would report an annual profit in excess of $100 million – partly generated from routes on which Qantas could not make money.
“Jetstar is hugely important to Qantas and a vital element in the company’s growth,” Mr Dixon said.
In an address to the National Aviation Press Club, the Qantas boss said the yet-to-fly Tiger Airways and Virgin Blue faced a fight if they wanted to challenge his carrier’s dominance in the domestic and international aviation market.
“We will compete aggressively to protect our market share,” Mr Dixon said.
He also defended company chairman Margaret Jackson over the controversial comments she made in support of the failed buyout offer for Qantas from Airline Partners’ Australia.
He refused to be drawn on her likely successor or who might fill the two other vacant board seats. “Her service as a board member and chairman has been outstanding,” he said.
Mr Dixon sought to clarify recent speculation about a spin-off of the carrier’s frequent flyer program, its freight arm and the future ownership of its extensive aircraft fleet.
“We are not going to sell off anything,” Mr Dixon declared.
He told the meeting that Qantas was simply looking at creative ways to maximise the value of its fleet of 213 aircraft.
This could involve alternative ownership structures, but it would not happen overnight, he said.
“We are also undertaking a capital management review to enable us to better align our capital management strategies with our corporate strategies, and the legitimate expectations of our investors.
“We have recognised for some time the benefits in segmenting our businesses and, indeed, first flagged our intentions in this area as far back as 2003.
“This has been a work in progress, albeit a process accelerated by the APA bid, and we remain confident that there is significant further value to be unlocked in Qantas over the next 18 months by continuing the process.
“I want to make it very clear that Qantas is not about to become a shell.” “We can improve the business and make it more profitable.
“Qantas is a very good business and we are going to make it a better business.”
He said Jetstar would be the key vehicle for Qantas plans in Asia.”Jetstar will work closely with our Asia-based investment partners, Singapore-based Jetstar Asia and Valuair, and Pacific Airlines in Vietnam’s fast growing aviation market of 85 million people.”
He said Qantas was looking to other Asian growth opportunities to ensure “we merit a chapter in what will undoubtedly be the biggest aviation story of the next 20 years.”
Report by The Mole
John Alwyn-Jones
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