Qantas Airways Ltd said sales on some routes dropped two-thirds as a deadly virus sapped travel demand, making the airline miss its own profit target and delay the delivery of planes. Its shares dropped as much as 5.6 percent.
Bookings on Australia's biggest airline to Hong Kong, where severe acute respiratory syndrome (SARS) has killed 193 people, are down 64 percent. Demand on flights to Australia from Europe, which stop in Hong Kong and Singapore, has slumped, denting sales at home because international visitors account for 15 percent of domestic sales. The airline also said it will cut more staff.
Qantas joins Cathay Pacific Airways Ltd and other airlines in delaying aircraft orders, making it harder for Boeing Co and Airbus SAS to meet delivery forecasts. The airline, which in March said full-year profit will miss analysts' estimates, didn't give details on orders for planes or its own profit forecast.
"It just highlights how tough the global airline industry is," said Dennis Tighe, who helps manage the equivalent of US$100 million at Allianz Dresdner Asset Management Australia Ltd, including Qantas shares. "The company has responded pretty much in the ways you'd expect them to, but these factors are outside their control."
Shares of Qantas were down A$0.13, or 4.3 percent, at A$3.06 at 1:32pm in Sydney. The stock has shed one-fifth of its value this year. Shares of Cathay, Hong Kong's only long distance carrier fell as much as 6 percent.
"The aviation industry is going through the most difficult period in its history," chief executive Geoff Dixon said in a statement to the Australian Stock Exchange.
Before the SARS outbreak, the airline was on track for a record A$594 million (US$381 million) profit, according to the average forecast of 14 analysts surveyed by Thomson Financial.
Qantas hasn't provided earnings forecasts for this financial year.
The airline also didn't say how many more jobs it may cut.
Qantas will cut more staff after it said in April it would eliminate 1,400 jobs, or 4 percent of its workers, and another 300 full-time employees would be moved to part-time jobs. It also said more people will be forced to take leave without pay.
Some aircraft will be retired and new plane deliveries will be deferred, Qantas said.
Airbus, the world's second-largest maker of aircraft, last month said it may not meet its goal of delivering 300 planes this year because the onset of SARS is causing Asian carriers to push back orders.
Qantas said ticket sales on Japan services fell by 30 percent while bookings from France, Italy and the UK had fallen 45 percent, 33 percent and 14 percent respectively. Declining demand for international travel to Australia has hurt domestic ticket sales.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
INSPIRING: Taiwan has been a model in the Asia-Pacific region with its democratic transition, free and fair elections and open society, the vice president-elect said Taiwan can play a leadership role in the Asia-Pacific region, vice president-elect Hsiao Bi-khim (蕭美琴) told a forum in Taipei yesterday, highlighting the nation’s resilience in the face of geopolitical challenges. “Not only can Taiwan help, but Taiwan can lead ... not only can Taiwan play a leadership role, but Taiwan’s leadership is important to the world,” Hsiao told the annual forum hosted by the Center for Asia-Pacific Resilience and Innovation think tank. Hsiao thanked Taiwan’s international friends for their long-term support, citing the example of US President Joe Biden last month signing into law a bill to provide aid to Taiwan,
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
STATE OF THE NATION: The legislature should invite the president to deliver an address every year, the TPP said, adding that Lai should also have to answer legislators’ questions The Chinese Nationalist Party (KMT) yesterday proposed inviting president-elect William Lai (賴清德) to make a historic first state of the nation address at the legislature following his inauguration on May 20. Lai is expected to face many domestic and international challenges, and should clarify his intended policies with the public’s representatives, KMT caucus secretary-general Hung Meng-kai (洪孟楷) said when making the proposal at a meeting of the legislature’s Procedure Committee. The committee voted to add the item to the agenda for Friday, along with another similar proposal put forward by the Taiwan People’s Party (TPP). The invitation is in line with Article 15-2