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Qantas aiming for high-end Asian market

Qantas aiming for high-end Asian market

QANTAS will use the Jetstar model as its template for a move into Asia at the higher end of the market, CEO Alan Joyce says.

» Special Reports | Wednesday, July 20, 2011 • Air News Times
But for Qantas to survive and prosper, staff must embrace change and the airline must embrace the massive, emerging Asian market.

"Change is always tough," Mr Joyce said today, in a message seemingly aimed at pilots and engineers in dispute with the company.

"But the competitive challenges we face make major change essential, and our commitment to the change process is absolute.

"Jetstar's enormous growth pointed the way to how Qantas - or a Qantas-owned, Asian-based carrier - could tap into the Asian market for business and mid and upper-market travellers.

"We have enormous opportunity to leverage Qantas excellence in brand management, aviation safety and other skills," Mr Joyce told the Aviation Outlook Conference in Sydney.

"Research on affluent Chinese travellers, for example, shows they are strongly influenced by prestige brands and considerations of safety."

Mr Joyce also sent a clear message to pilots and engineers, who have started industrial action over job security, over the necessity for change to international best practices.

He said Qantas was competing against airlines with overheads up to 25 per cent lower.

Mr Joyce also said pilots' wishes to extend their pay and conditions to Jetstar flights with a Qantas codeshare could not happen.

"To pay Qantas rates to Jetstar pilots would simply drive up ticket prices, set precedents for other staff salaries and make Jetstar unviable," he said.

And he said Qantas maintenance and repair costs were "among the least efficient and most expensive in the world".

Mr Joyce said the airline had to adapt to new maintenance standards set by the Civil Aviation Safety Authority in line with world's best practice to get efficiencies out of its newer aircraft.

"So it's time to catch up," he said.

"We don't repair cars the same way we did 40 years ago. We can't repair our planes the same way either."

The new rules meany planes could be worked on by qualified staff other than licensed engineers, allowing engineers to concentrate on their core specialties.

It also meant engineers would no longer be required to check and sign off on every flight before it left the airport.

"Globalisation requires change," Mr Joyce said.

"We just can't change a few parts of our business, we have to make every part of our business efficient and in touch with new realities."

Licensed engineers have begun industrial campaign over job security and work practices by actions including one-minute strikes and a few employees using their tools with only their left hands.

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