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Australian carrier plans Bali flights
By Geoff Hiscock
SYDNEY, Australia (CNN) -- Qantas Airways' low-cost subsidiary Australian Airlines is to give a boost to Bali's beleaguered tourism industry by beginning flights to the Indonesian island in July. The fledgling airline also says it may start flying to Shanghai in October. Australian Airlines, which has operating costs about 25 percent lower than Qantas, will operate three Sydney services to Denpasar in Bali and one Melbourne-Denpasar service a week from late July. CEO Denis Adams said he hoped to further increase flights to Bali next year. Bali's tourism industry was devastated by last October's terrorist bombing in the Kuta nightclub district that killed 202 people, including 88 Australians. International bookings dwindled to a trickle as Australia and other countries issued travel advisories warning their citizens against visiting Indonesia. The sharp downturn prompted Indonesia to send tourism representatives to Australia recently to see if international visitors could be wooed back. Adams said on Tuesday that after discussions with these representatives, the airline had decided the "time was right" to add Denpasar to its schedule. The Australian Airlines services will be instead of two Sydney-Denpasar flights Qantas was planning to introduce in April. Adams said Australian Airlines, which began flying last October as a low-cost international leisure carrier, was looking at services between Cairns, in northern Australia, and the Chinese city of Shanghai from October. Profits under pressure
Qantas, which last week reported a first-half net profit of A$352.2 million ($211 million) on revenue of A$5.9 billion to December 2002, withdrew from the China market in 2001. Announcing the interim results on February 20, Qantas CEO Geoff Dixon warned that the recovery in international aviation markets was under pressure from heightened tensions over Iraq and the threat of terrorism. (Full story) He said forward bookings for the next 16 weeks had "slowed considerably" in some markets, including Japan, Europe and the United Kingdom. "All carriers appear to be affected," he said. Dixon warned that Qantas would struggle to hit its full-year profit target if tensions continued and bookings deteriorated further. He said Australian Airlines achieved operational earnings before interest and tax (EBIT) of A$4.4 million for the October-December period. Start-up costs of A$6.9 million resulted in a loss of A$2.5 million. Adams said on Tuesday that in addition to the Indonesia and China markets, Australian Airlines was looking at flights from Cairns to Kota Kinabalu in East Malaysia. These services would then go to Singapore. As well, in mid-2003 the carrier will begin flights between Cairns and Sydney six times a week, to connect with its services from Japan and other Asian ports. Shares in Qantas closed 2.17 percent higher at A$3.30 on Wednesday, recovering some of the ground lost on Tuesday. The broader Australian market, measured by the S&P/ASX200, put on 1.0 percent.
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