QANTAS STRUGGLES TO COMPETE WITH LOW-COST VIRGIN

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SYDNEY, Australia (ABC News Online, Aug. 24) - Qantas chief
Geoff Dixon claims the airline is struggling to compete against rival Virgin
Airlines on domestic routes.

Qantas lost $9 million in the second half of the financial year,
blaming it on terrorism, severe acute respiratory syndrome and sluggish world
economies.

Dixon said Qantas is striving to lower operational costs.

It recently announced a restructure of the airline.

Speaking on Channel Nine, Dixon said Virgin currently has an
edge over Qantas.

"They have a terrific base, they are now setting the
parameters basically domestically," he said.

"It's very, very hard for us to compete when someone has 25
to 30 per cent of cost base on you, it was given to them by the same unions who
negotiate and want to negotiate higher costs for ourselves.

"What we're saying is we need more productivity, we're not
necessarily coming after wage levels."

Meanwhile, Qantas said it is not looking for industrial war in
changing working conditions for some of its staff through a recently announced
company restructure.

"We're saying without any redundancies through attrition
we'd like to get that up to between 20 and 25 per cent, that's about another
1,500 to 3,000 who may be on those conditions," he said.

"That will help us but it's not the only thing we need,; we
need a lot of changes to our labor relationships; we also need changes to other
parts of the airline. It's a constant change to run this business."

Dixon said he has discussed the airline's wishes with ACTU
president Greg Combet.

August 25, 2003

ABC News Online: www.abc.net.au

 

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