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For those of you digging through wardrobes to find your best black attire and recalling years of memories to pick a few salient points to eulogize Qantas on 24 August when chief executive Alan Joyce announces a re-structure for its international division, you would be better off to stop what you are doing and instead get a bottle of champagne ready--or, more appropriate to Qantas, a bottle of wine from its epiQure club, as the restructure is not a death but a rebirth.

In the past 15 years Qantas International has only achieved returns, however that is calculated, in three years. Fully government-owned carriers could continue on that path, but Qantas is not such an airline. It is an airline that is at a convergence of factors it needs to act on and be realistic about--as do its customers.

The most recent is Virgin Australia's move in to the domestic corporate market, which has generated Qantas high profits. Last year the frequent flyer programme contributed approximately 70% of pre-tax profits, with much of that thanks to the new Woolworths partnership. On the savings front, QFuture delivered in savings $533m--more than the pre-tax profit--but QFuture only runs through next year.

The signs have been present but Qantas actions have not. Those familiar with the situation say the 2008 record profit of $1408m pre-tax fueled complacency across the carrier and only recently has the carrier seen "more courage from management".

That is not the verdict naysayers, who trump Joyce as the cause of all problems, would like to hear. Joyce inherited, not created, the majority of problems. Despite criticism, which led chairman Leigh Clifford to publicly defend Joyce, Joyce is setting out to--finally--be the executive to create a suitable Qantas.

Unprofitable routes that do not improve the bottom line directly or indirectly cannot continue. Joyce has said everything is on the block, which has led to some curious rumours, like the Johannesburg route being cut. Given it was the group's most profitable international route last decade, followed by Papua New Guinea and then Los Angeles, sources say, its axing is unlikely.

Elsewhere routes may be changed, re-directed, or taken over by the much-derided Jetstar. That is a reality of what is financially needed. Boeing 777s will not solve the problem. Network opportunities have been missed, either for passing Etihad over ties with British Airways, or for lack of a partner willing to collaborate, such as with Cathay Pacific.

New opportunities, such as Malaysia Airlines joining oneworld, and strengthening of existing relationships mean the cause is not lost.

It is early days for the Asian, and Chinese in particular, boom. In one example, in 2009 China Southern introduced three direct weekly flights from Melbourne to Guangzhou. Last year it went daily out of Melbourne, and is shortly due to announce a double daily service.

As much of a threat as the Middle Eastern network carriers are and are made out to be, their future is young. Emirates is eying 100 weekly flights to Australia and while it has a sizable A380 fleet in service, the onslaught of deliveries is yet to begin.

Both are challenges and opportunities for Qantas to combat. The recent past may have been lacking, but it has been a short period, unlike the future.

American Airlines has reaffirmed it has no intention to fly its own aircraft to Australia.

The carrier's comments follow a remark to Executive Road Warrior that its forthcoming Boeing 777-300ER aircraft had the range to operate routes like Los Angeles to Sydney. That acknowledgement sent speculation into overdrive that American Airlines was considering serving Australia with its own metal.

"I clearly made it known we have no thoughts about flying to Australia ourselves--and there is no consideration of that currently," American Airlines spokesman Tim Smith tells this page. "Anyone doing otherwise should stand down on their speculation."

Executive Road Warrior commented to Smith that the 777-300ER could fly from LA to Sydney. Smith replied: "Yes, although we did just apply for the Joint Business Agreement with Qantas and they started flying into and out of DFW, which is great for both of us. We may want to put our ducks in Austrialia with the Qantas guys, but [the 777-300ER] certainly could do that route."

Smith subsequently said, "My comment was merely a notation that we will be looking for missions for our Boeing 777-300s when they first arrive in 2012.  And I also said that routes to Latin America, Asia, and Europe are the more likely candidates."

American Airlines had previously stated it had no intention to serve Australia, saying it was short on long-range aircraft and an Australian route posed pilot contractual problems (albeit perhaps exaggerated). The comments were made in the carrier's application to the United States Department of Transportation for a joint business agreement with Qantas.

Reports have taken remarks to the Executive Road Warrior to mean American does not see Qantas as a premium carrier or hold its oneworld partner in high regard. Smith has dispelled such notions.

"I also said that we are quite pleased with our mutual codeshare relationship with our oneworld partner, Qantas.  So pleased, in fact, we have applied to the U.S. Department of Transportation (DOT) for a Joint Business with Qantas on Australian routes that connect to our American routes in the United States."

American Airlines this week disclosed it has purchased two further 777-300ER aircraft, bringing its order to eight. It also ordered approximately 460 737 and Airbus A320 aircraft.

Auckland is moving forward with a goal to become a network hub for flights between Asia and South America.

The New Zealand government has given its officials a mandate to negotiate new and more liberalised air service agreements with China and Brazil, as well as up to eight other countries, associate transport minister Nathan Guy said, as we reported on our Air Transport Intelligence news wire service.

Guy said the pending new agreements will "encourage stronger tourism and business ties with two of the fastest growing regions in the world."

This is a vision shared by Air New Zealand. Chief executive Rob Fyfe last year outlined the prospect of a Dubai-style hub in New Zealand that would replace the existing hub in Europe for Asia-South America traffic.

"New Zealand is perfectly positioned to become a new hub linking Asia and South America," he said.

Only Aerolineas Argentinas and Oneworld carriers LAN and Qantas have direct flights from South America to Oceania, while only Qantas has onward connections to Asia. Air China, Singapore Airlines, and Thai Airways, members of Star Alliance with Air New Zealand, serve Auckland but no Star Alliance carrier has routes between South America and Oceania. Oneworld carriers Cathay Pacific and LAN already transfer passengers between Asia and South America at Auckland, Guy said.

Fyfe was also eyeing new services for the carrier's order of Boeing 787-9 Dreamliners, for which it is the launch customer for. Targeted destinations were undisclosed cities in South America and India, as well as South Africa. Fyfe also said adding further cities in China and America was an option.

With Air New Zealand's first 787-9 not due for delivery until 2013 at the earliest, Fyfe said he was looking at "getting some of these other options up and running in the meantime".

For all the optimism New Zealand and Air New Zealand share, some within those organisations quietly share doubts over the potential for New Zealand to become a hub.

Far greater services are available through Europe, including more one-stop journeys, whereas a limited number of flights into and out of New Zealand from Asia and South America could mean passengers have to transit through hubs in Asia and South America to board a trunk route flight to or from New Zealand.

Given the thin traffic in and out of New Zealand, Fyfe remarked that once a carrier planted itself on a route, it would be difficult for the route to support more than one carrier. That would potentially alienate customers who align themselves with an alliance not operating a route.

News of the Qantas Group returning to Beijing, after the mainline carrier withdrew in 2009, should be embraced cautiously rather than with a wide-armed ni hao.

And that is not because the Airbus A330-200 route, via Singapore, is another example of the familiar protest concerning Qantas shuttling routes and anything new to Jetstar. The route raises concern about the Australia-Chinese market and Qantas's viability in it.

A year ago this month Qantas chief executive Alan Joyce flagged the potential of Jetstar to let the Qantas Group return from Australia to mainland China--Qantas also cut its Melbourne-Shanghai route--and expand even further.

Such routes, Joyce said, would be ideal for the 787 as the aircraft "opens up that range of routes that we wouldn't see to be economical today".

Maybe Jetstar is opening the route via Singapore because it does not have the 787 yet and so cannot be profitable on a direct service from Australia. But is the alternative better? The outbound service from Melbourne takes 15h 50m while the inbound service has an 11h layover, giving a total journey time of 25h 5m.

You may as well go to Europe or fly direct on a mainland Chinese carrier.

But maybe that is all besides the point because the route is geared primarily for the Asian, not Australian, market. When Joyce last month announced his turn-around strategy for Qantas International, he said "we will be establishing a platform for future success, which means Asia."

He continued: "As a nation we used to fly via Asia, now we fly to Asia, and the future will be about travel both to and within Asia."

Alas, the only Melbourne-Beijing route Jetstar is launching will be in press materials for the Australian market. It's really a Singapore/ASEAN-Beijing route.

Further, is the route designed to compete with, or even preempt, Singapore's forthcoming LCC that plans to capture the low-cost growth it has lost? Surely Singapore is tuned in to the potential traffic to China's capital and second-largest city?

Where then, does that leave Jetstar and Qantas serving China from Australia? Perhaps waiting for the 787 is still necessary, or perhaps Qantas and Jetstar cannot compete with the Chinese carriers to and from the comparatively small Australian market and so instead are focusing on the larger intra-Asia traffic. The latter is definitely the initial case but remains to be seen if it will also be the precedent.

Over the weekend resource industry fly-in, fly-out provider Alliance Airlines took delivery of the first of two Fokker F70 long range aircraft, as seen above. Alliance has recently acquired the pair, along with two more Fokker F100 aircraft.

"The capabilities of the F70LR and the ability to easily integrate the aircraft into our existing fleet made the F70LR a natural choice," managing director Scott McMillan said. After deliveries are complete Alliance will operate 5 F50s, 2 F70LRs and 18 F100s.

The Brisbane-based carrier said the F70LR can fly non-stop from Australia's east coast to mining sites in Western Australia, "avoiding the additional cost, longer journey times and peak-period congestion at Perth Airport".

Alliance already has an "agreement" to provide such non-stop east coast-west coast service and is in discussions with an undisclosed number of additional companies. The carrier also plans to deploy the aircraft on undisclosed missions on the east coast.

Photos show Alliance's first F70LR had been in storage in Slovakia after being in service with Comlux Malta.

Sydney is still off-limits for AirAsia X to fly to despite the Malaysian government lifting route restrictions on the low-cost, long-haul carrier.

"Basically there will be no further route restrictions on AirAsia X. Previously there was something about you've got to fly three new routes before you are allowed to fly one parallel route with Malaysia Airlines," AirAsia X chief executive Azran Osman-Rani said on the sidelines of last week's Paris air show, during which approval came through.

The route restrictions had been expected to be lifted since last October when the government said such action would be necessary to help Malaysia achieve its economic transformation program.

AirAsia X received approval at the same time to fly to Beijing, Jeddah, Istanbul, Osaka, and Shanghai. "The one exception we did not get was Sydney," Osman-Rani said. He said Sydney was not a rejection but a "not just yet". AirAsia X had hoped to start services to Sydney last year. After it did not receive approval, AirAsia X took its plight to the skies with a "Liberate Sydney. End the monopoly" slogan.

The carrier is now submitting slot applications and preparing operational readiness work with an eye to launch services within the next 12 months to two of the five approved cities--and not more due to limited aircraft availability, Osman-Rani said.

Next year will see further operational changes as AirAsia X replaces the Airbus A340-300s flying to London and Paris with its new A330-200 high gross weight aircraft, Osman-Rani said. The A330-200HGW will offer substantial fuel savings, but will come as Jetstar possibly begins European expansion with its A330-200HGWs either independent or related to Qantas's international restructure. Osman-Rani said there may be some "interesting uses" for the A340s, but declines to specify where.

The past month has brightened AirAsia X's prospect for a forthcoming IPO, Osman-Rani said. Without route restrictions being lifted, he said, "investors are going to say, 'Look if we give you money, you get planes, but you're going to have real constraints getting route approvals.'"

Osman-Rani said Singapore Airlines' announcement last month to start its own long-haul LCC "validates the low-cost, long-haul model for a lot of investors. It also validates the idea that it's different enough that you've got to do it in a different brand." There has been some questioning of why AirAsia X has to be a separate brand and company from AirAsia.

As for competitive pressure from Singapore's LCC, Osman-Rani noted Changi can be a good air hub but "at a high price point".

"We'll hang on to our four-year lead," he said.

On the profitability side, Osman-Rani said AirAsia X was profitable last year and is waiting to see how the second half of this year contributes to the annual result, noting the second half is traditionally stronger. "The mature routes that have been with us for more than 12 months are continuing to be profitable despite the higher fuel price environment. Some of the new routes that we just started last year are obviously struggling because there's not enough traction, there's not enough demand yet, and boom you hit them with $130 jet [fuel]."

Even in the current environment, and perhaps now more than before, Osman-Rani sees AirAsia X's position holding strong. "I've always believed the future for commercial aviation is a real polarisation, rather than a hybridisation. People are finding new positions within the two polar extremes, but there will be two polar extremes."

Based on a nominal A321neo range of 3160nm, any future Cebu Pacific operation will largely be confined to northern Australia if going non-stop, with Perth a slim possibility and southern Queensland not possible unless the A321neo delivers more range or Cebu operates flights with a restricted payload. Melbourne and Sydney are clearly out of the aircraft's present range chat:

An order like this, Airbus sales executives will be keen to say, reminds other airlines in this region of the need for the most fuel-efficient aircraft to keep their cost competitive. No doubt Airbus is targeting regional A320 operators like Tiger and Jetstar.

Jetstar has a joint-venture with AirAsia, who is expected to place a large order for A320neos at next week's Paris Air Show. The AirAsia-Jetstar alliance has yet to achieve the benefits the two carriers mentioned when launching the alliance in 2010. A320 operator Air New Zealand is the launch customer for A320s with Sharklets, which will reduce fuel burn by 3.5% when delivered next year.

As we reported earlier today:

Cebu Pacific has not made an engine selection between the CFM International Leap-X and Pratt & Whitney PW1100G for the A321neo. The airline's existing fleet of A320 family aircraft are all powered by CFM International CFM56 engines.

The order will more than double its fleet and triple its capacity, said Cebu Pacific. It operates 33 aircraft, comprising 25 A320s and eight ATR turboprop aircraft. It also has 18 more A320s on order, to be delivered from the second half of 2011 until 2014. With the new order, the airline's total firm orders will increase to 55.

Gokongwei said the A321neos will reduce the airline's unit cost per seat "to a level that cannot be achieved flying A320s".

There is no word yet on what CASA may think of the carrier's approach to safety demonstrations.