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Fri, Oct 17, 2003 - Page 12 News List

World Business Quick Take

AGNECIES

■ Aviation
Qantas takes on Virgin Blue

Qantas Airways is planning to launch a low cost airline in Australia in a move aimed at winning back passengers from discount carrier, Virgin Blue. "This demonstrates Qantas' commitment to ensuring our ongoing competitiveness," chairwoman Margaret Jackson said at the carrier's annual meeting yesterday. She gave no details of the new operation and did not say when it would start flying. But she said staff salaries might be reduced. In August, Qantas said it had put a team together to consider whether it should start a low cost carrier in the leisure markets. It had expected to make a decision around next month. Jackson told shareholders the transition to a new cost base was essential to Qantas' longterm success.

■ Airlines

KLM union wins guarantees

KLM Royal Dutch Airlines NV, Europe's fourth-biggest airline, agreed to union demands that it not fire workers for five years after its takeover by Air France SA, Algemeen Dagblad reported, citing an unidentified spokesman for the Dutch airline. KLM union FNV Bondgenoten had made its approval of the takeover dependent on the job guarantee, the newspaper said. One condition of the guarantee is that the Amstelveen, Netherlands-based carrier won't have to stick to the accord in the case of "external factors" such as wars, epidemics and terrorist acts, Algemeen Dagblad said. The carrier will also reconsider the agreement should KLM's profitability vary greatly from that of Europe's other largest airlines, the newspaper cited the KLM spokesman as saying.

■ Currencies

Moody's upgrades China

International rating agency Moody's Investors Service yesterday said it has upgraded the foreign currency ratings for China, Hong Kong and Macau, with the former British and Portuguese colonies now seen as slightly stronger than China. Moody's said in a statement that it raised the ceiling for China's foreign currency bonds and long-term foreign currency bonds to A2 from A3, with foreign currency bank deposits at A2, up from Baa1, and foreign currency notes and deposits at Prime-1, up from Prime-2. At the same time, the agency upgraded Hong Kong's foreign currency ceilings for bonds and bank deposits to A1 from A3, while affirming Hong Kong's Aa3 domestic currency rating. The agency also upgraded Macau's foreign currency ceilings for bonds and bank deposits to A1 from A3 and upgraded to A1 its foreign and domestic currency issuer ratings.

■ Telecoms

Ericsson has first profit

Sony Ericsson Mobile Communications Ltd, the world's fifth-largest maker of cellular phones, had its first quarterly profit ever as new handset models boosted sales. The net income at the London-based joint venture of Sony Corp and Ericsson AB was 62 million euros (US$73 million) in the three months ended September, compared with a loss of 93 million euros in the year-earlier period, it said in a Hugin news service release. Sales jumped 50 percent to 1.3 billion euros. The venture, formed in October 2001 with the aim to dethrone market leader Nokia Oyj, is boosting sales and taking market share with new models such as its T610 camera-phone. The venture is also looking to reduce costs after announcing 500 job cuts in June and stopping making some US phones.

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