Qantas alliance likely says CEO

Australian flag carrier Qantas is likely to form some kind of alliance with another airline in the future, Chief Executive Officer Geoff Dixon said today.

“I think that we will be in some association with another carrier,” he told Australian television’s Nine Network. ”I think that will become necessary.”

Dixon declined to identify a likely partner and said the Qantas brand name would remain even if it ties up with another carrier.

“I’ve always said I believe Singapore Airlines are a wonderful carrier, have a tremendous brand, tremendous track record,” Dixon said, responding to recent speculation about a possible merger between Qantas Airways Ltd. And its Singapore rival.

“Yes, they would be a lovely partner but so would British Airways, so would Cathay Pacific, so would a lot of carriers out there,” he added. “So would Air New Zealand, which was literally taken away from us.”

Qantas and Air New Zealand’s proposed alliance was vetoed in 2003 by New Zealand’s competition watchdog, which said it would be anti-competitive.

Dixon said he supports a relaxing of a foreign ownership cap in Qantas, which currently allows single foreign airlines to own no more than 25% of its stock and limits overall foreign ownership to 49% of the carrier.

“We would like to be like every other company in Australia – all the restrictions moved,” he said.

Dixon also said Qantas has no immediate plans to lift its fuel surcharge as world oil prices surge.

“We have not made a decision in the pipeline for that at all,” he said. “It’s tough, at $60 a barrel, but we have no immediate plans.

“We are not confident that oil prices will go down dramatically in the next two or three years so the way we structure our business going forward has got to take into account that we are going to have high oil prices for quite a long time,” he said.

Dixon said Qantas will wait three or four months to see where the oil price is headed before reviewing the possibility of lifting its fuel surcharge.

“But look, if things got very, very tough and it became a competitive issue obviously we will have to look at it,” he said.