IATA: Qantas overhaul is underway

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A review by Qantas Airways of its international business is an "ongoing process" and will comprise several measures that will be announced in the coming months.

The loss-making international business has "structural challenges" including rising fuel costs, competition from foreign carriers

and a strong Australian dollar that has affected inbound tourism into the country.

"There is no silver bullet to resolving this problem," said Qantas chief executive Alan Joyce at the IATA Annual General Meeting.

"We need a big turnaround and we are studying plenty of options. Some have been announced, others we will talk about soon."

One step the airline has taken is to deepen ties with its partners in the Oneworld Alliance. For example, in May, the carrier launched a Sydney-Dallas/Fort Worth service to work closely with American Airlines. Through its codeshare deal with American its network extends to 54 destinations in the USA, Canada and Mexico.

Qantas also plans to work more closely with Malaysia Airlines, which will join Oneworld, to increase connectivity to and from Southeast Asia.

There are reports that Qantas could set up a premium carrier in Singapore as a joint venture, but Joyce said that a decision has not been made. "We are keeping all the options on the table," he said.

Jetstar, Qantas' low-cost subsidiary, will expand from Australia and through its franchises. Jetstar Asia, the Singapore-based Qantas associate, has begun long-haul services to Melbourne and Auckland and plans to extend that to Europe and other parts of Asia. It will, however, face competition from Singapore Airlines, which plans to start up its long-haul lowcost subsidiary within the year.

"Competition is always there. Jetstar competes with AirAsia X, and we are used to it. We have first mover advantage," said Joyce.