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Qantas boss predicts global airline industry consolidation

July 22 2008, Sydney, Aus., - Higher fuel prices and an agreement on
loosening U.S. foreign ownership regulations could lead to a
 consolidation of the global airline industry into just a few
 companies, according to the chief executive of Qantas Airways.


July 22, 2008
By Administrator

July 22 2008, Sydney, Aus., – Higher fuel prices and an agreement on
loosening U.S. foreign ownership regulations could lead to a
 consolidation of the global airline industry into just a few
 companies, the chief executive of Qantas Airways said Tuesday.

 “Right now the global aviation industry faces … a permanent
 transformation,'' Geoff Dixon told a gathering of business leaders.



The United States and the European Union began talks in May on a 
transatlantic aviation agreement that could end American rules
 barring foreign control of U.S. airlines and capping foreign 
ownership of voting stock at 25 per cent.

 Dixon, who has repeatedly warned that the rising cost of fuel is 
a very serious problem for airlines worldwide and who announced last
 week that Qantas will shed 1,500 jobs next year, said such
 deregulation of the U.S. market would be a “ground breaking
 development.”

“It would open the way for airlines to engage in meaningful 
cross-border investments, and sooner or later it will happen,” 
Dixon said.

 “We believe strongly at Qantas that over time, consolidation
 will transform aviation. It will produce a few very
 large and extremely efficient global airlines with a portfolio of 
interests and a portfolio of brands."

“No airline would be safe from the possibility of takeover,” he
 said.

 “Qantas, itself, was the object of an unsuccessful $9-billion 
takeover bid early last year by a private equity consortium which
 included Canada's Onex Corp.

 “Consolidation, when it starts, will be very erratic and I don't
 believe any airline, particularly in this part of the world, will be 
able to avoid consolidation,'' Dixon said.

 He said Qantas has positioned itself to avoid being swallowed by
 investing in its business, cutting costs, ordering more 
fuel-efficient aircraft and developing a strong brand.

 “The work that Qantas has done to date means that we will avoid 
any such dark destiny,” he said.