Some of Qantas' pain is self-inflicted

ALAN Joyce likes to say Qantas is fighting with one hand behind its back in its battle with rival Virgin.

That may be true, but using its free hand to repeatedly slap itself in the face hasn't helped the airline.

Though there is a somewhat perverse way in which its self-inflicted wounds may help Qantas to ultimately win its battle.

With the two carriers locked in a vicious, profit-draining battle, Mr Joyce has been heavily criticised for his airline's stubborn insistence on preserving its roughly 65 per cent market share at any cost.

He doubled down on the controversial strategy, announcing plans to increase domestic capacity another three to four per cent in the next six months.

There are reasons for him to do so: Qantas and Jetstar draw significant competitive advantages from their combined market share, which is one reason Qantas has been a standout financial performer in the global aviation industry in the past.

But does having a lower cost base and strategic advantages over your rival matter all that much if you are both losing money by the truckload?

Qantas unveiled a $252 million underlying half year loss on Thursday and Virgin is expected to announce a poor result on Friday.

The difference between the two is Virgin can dig into the deep pockets of three foreign airlines - Etihad, Singapore Airlines and Air New Zealand - who collectively own around two thirds of the carrier.

Foreign ownership of Qantas, meanwhile, is restricted by the Qantas Sale Act, and its borrowing costs have been pushed up recently after major ratings agencies downgraded its credit rating to junk status.

That's where Qantas's self-flagellation in the capacity war could ultimately be to its benefit.

The carrier appears to have gotten itself into bad enough shape to make what was previously unthinkable from a political perspective - foreign ownership of the former national airline - a very real prospect.

If the Abbott government successfully presses ahead with changes to the Qantas Sale Act it will deliver the airline's management a very big win.

However, whether greater access to foreign funds helps Qantas deliver a decisive blow to its rivals or whether the airline just starts slapping itself with both hands remains to be seen.

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Sunshine Coast on measles alert

QUEENSLAND'S Sunshine Coast is on measles alert after an adult was diagnosed with the highly infectious disease upon returning from southeast Asia.

Health authorities are still trying to trace people, including staff and patients at two Sunshine Coast hospitals, who might have come into contact with the infected adult.

Queensland Health says the unvaccinated adult likely acquired the virus during a recent trip to Vietnam.

Sunshine Coast Health Unit public health specialist Dr Andrew Langley says residents should be wary of unusual rashes and seek advice from their GP if in doubt.

A red, spotty rash and other measles symptoms, including a fever, cough and runny nose, usually appear 10 days after infection.

"Also, anyone intending to travel overseas should ensure they are up to date with their measles vaccination," Dr Langley said.

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Bishop spiked rhino program, hearing told

FOREIGN Minister Julie Bishop has spiked plans by the former Labor government to help save the Sumatran rhinoceros.

In June 2013, then foreign minister Bob Carr said Australia would provide $3 million over three years to help Indonesian authorities protect the species, of which there are estimated to be fewer than 200 remaining.

But the program did not and would not begin, Department of Foreign Affairs and Trade spokesman Rod Brazier told a Senate estimates hearing on Thursday.

"The current foreign minister has decided not to proceed with the program," he said.

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Qantas cuts 5000 jobs, sparks debate

Qantas workers are set to find out how many of them will lose their jobs after a half year loss. Source: AAP

THE federal government has all but rejected a debt guarantee for Qantas after the airline announced a massive loss and plans to shed 5000 jobs.

The national carrier posted a $252 million half-year loss on Thursday, due to a tough fight with a cashed-up Virgin Australia in the domestic market, fierce competition on international routes and problems with Jetstar.

The airline will cut 5000 jobs, freeze wages, retire old planes, slash capital spending and cut some routes in a bid to cut $2 billion in costs over three years.

"The current position is unsustainable," Qantas chief executive Alan Joyce said.

Mr Joyce said the job cuts, most of which would occur within the first 18 months, were necessary to save the airline.

"There are many Australian companies that have failed because they were not prepared to make the hard decisions, Qantas is not one of them," he said.

He said he wants to protect as many of the 27,000 jobs remaining but could not guarantee they would all be protected indefinitely because of issues outside Qantas' control.

The cuts triggered a feisty debate in federal parliament, as Labor said it might support a debt guarantee but ruled out backing changes to legislation to allow the airline to lift its foreign ownership above 49 per cent.

Noting it was a difficult day for Qantas workers, Prime Minister Tony Abbott was cool on a debt guarantee, telling parliament the airline was not a special case.

"Why should the government do for one what it is not prepared to do for all, or what is not necessarily available for all?" he said.

Virgin Australia boss John Borghetti said if the government gave Qantas a debt guarantee, he would seek a similar pledge "within 24 hours".

Mr Abbott strongly argued for enabling Qantas to secure more foreign capital and take the fight up to its competitors.

"We want to ensure that Qantas is not competing against its rivals with a ball and chain around its leg," he said.

Opposition Leader Bill Shorten said there was no excuse for the government not to step in.

"This is the worst day for aviation people since the collapse of Ansett," he said.

Opposition transport spokesman Anthony Albanese said changing the Qantas Sale Act was a distraction for government inaction.

He said if foreign investment were an issue, the airline would already be at its 49 per cent foreign ownership limit and not the current 39 per cent.

Changing the act would have other ramifications, including thousands of jobs going offshore, rural and regional routes being dropped and the likely split of Qantas' operations into separate domestic and international companies.

Independent senator Nick Xenophon has called for a judicial inquiry into the company's financial mismanagement, particularly in relation to Jetstar, and called for Mr Joyce and the Qantas board to be sacked.

"The jobs that should have been lost are Alan Joyce and his board," he said.

But Mr Joyce believes he's the right person to take the company through the challenges it faces and has a plan to fix the business.

"Again what we are only after is a fair go for Qantas.. we don't have a fair go at the moment," he told ABC.

Transport Workers Union national secretary Tony Sheldon urged Treasurer Joe Hockey to meet airline executives.

"If Joe Hockey's not prepared to do that, then it's industrial action that the workforce should be considering," he said.

The airline plans to shed 1,500 management and non-operational roles, as well as operational positions affected by fleet and route changes and the restructure of maintenance operations.

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Cruise ship returns with sick toll at 700

A cruise ship on which nearly 700 passengers and crew fell ill has arrived home in the US. Source: AAP

A CRUISE ship on which nearly 700 passengers and crew fell ill has arrived at its home port in the US after a Caribbean voyage was cut short by the outbreak.

One woman aboard the Explorers of the Sea yelled, "We made it!" as the ship docked Wednesday at New Jersey. Other passengers, with blankets wrapped around them, stood on deck to watch the ship pull in.

The cause of the outbreak is yet to be determined.

Bill Rakowicz of Canada said he suffered from vomiting, pain and diarrhoea and that his experience was simply "awful".

The US Centres for Disease Control and Prevention said its latest count puts the number of those sickened at 630 passengers and 54 crew members. The ship was carrying 3050 passengers.

Health investigators suspect norovirus, but lab results are not expected until later this week.

If norovirus is to blame, it would be one of the largest outbreaks in last 20 years, the CDC said. A 2006 norovirus outbreak on a Carnival Cruise Lines ship also sickened close to 700.

Norovirus - once known as Norwalk virus - is highly contagious. It can be picked up from an infected person, contaminated food or water or by touching contaminated surfaces. It causes bouts of vomiting and diarrhoea for a few days.

The CDC said it recommended to cruise operator Royal Caribbean that people who still have symptoms be housed in nearby hotels or seen at medical facilities before travelling home.

CDC investigators boarded the ship during its US Virgin Islands Port call on Sunday. They said no single food or water source or other origin has been identified.

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Treasury Wines tank on share market

Treasury Wine Estates has issued a profit warning in the wake of weaker than expected sales. Source: AAP

TREASURY Wine Estates has been hammered on the stock market, with its shares falling by 20 per cent after it issued a profit downgrade due to weaker sales in Australia and China.

The company behind Penfolds and Wolf Blass has cut its full year earnings forecast from between $230 million and $250 million to between $190 million and $210 million.

It expects first half earnings, which will be announced in February, to be between $41 million and $46 million, down from $73 million last year.

Treasury Wine shares fell to $3.64, their weakest price in almost two years, wiping $589 million from the value of the company.

Weaker than expected sales in Australia, following the company's decision to lift prices on some products and focus less on Christmas promotions, had contributed to the profit downgrade, it said.

A decline in Chinese demand for premium wine had also hit sales volumes.

Treasury Wine also said it had continued to reduce shipments to the US while increasing investment across the group, especially in Asia.

The profit downgrade is the latest in a string of bad news for Treasury Wine, which last year poured more than $35 million worth of excess or aged commercial stock down the drain in the US.

The controversial move, which was part of a broader $160 million writedown, ultimately led to the departure of chief executive David Dearie.

Law Firm Maurice Blackburn and litigation funder IMF last October announced funding of a class action against Treasury Wine, alleging the company misled the market and breached its continuous disclosure obligations in its communication of the financial impact of over-stocked US distributors to investors.

On Thursday, Maurice Blackburn managing principal Ben Slade said the latest profit downgrade raised "questions of transparency" about the company's operations.

"TWE's announcement this morning suggests that continuous disclosure requirements may not have been complied with," he said in a statement.

"We are confident that the company's shock $190 million downgrade announcement in July last year was indicative of such a breach. It may have happened again."

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MP says give 'measly' $25m to SPC

Federal cabinet will discuss a proposal to co-invest in SPC Ardmona's fruit processing operations. Source: AAP

PRIME Minister Tony Abbott has used the rejection of taxpayer support for fruit processor SPC Ardmona to set an important "marker" for how his government will deal with requests for industry assistance.

The 93-year-old Victorian company wanted a $25 million federal grant, topped up by $25 million from the Victorian government and its own $150 million investment, for new product development and technology to prop up its operation.

But after three hours of debate in federal cabinet on Thursday, Mr Abbott said the plan was rejected because it was not the government's job to restructure a particular business.

The decision, which workers and growers fear will lead to the operation's closure, comes weeks after Holden's bid for support was rejected and its parent company General Motors announced the end of car production in Australia in 2017.

"The decision that came from the cabinet today does set an important marker," Mr Abbott said.

"This is a government which will make sure that the restructuring that some Australian businesses need, that some Australian sectors need, is led by business, as it should be."

The government's role was to create the right climate for business, he said.

Mr Abbott said SPC Ardmona - owned by food giant Coca-Cola Amatil - was a strong business with the resources to allow it to restructure.

The company advised the government it was prepared to invest an extra $161 million into the business and renegotiate its enterprise bargaining agreement.

Mr Abbott said the company's present EBA had conditions "well in excess of the award", including a wet allowance and generous redundancy provisions.

However SPC Ardmona managing director Peter Kelly said the company would review its business plans.

"This is an unexpected and extremely disappointing decision by the coalition, particularly after the enormous support we have received for our business plans from the local community and beyond," Mr Kelly said.

Acting Opposition Leader Tanya Plibersek said the government had failed in its fundamental role - to protect jobs and bring on new investment.

"First they forced General Motors Holden out - now they are sending SPC Ardmona to the wall," Ms Plibersek said.

Labor pledged at the 2013 federal election to provide the $25 million grant.

If the plant closes, it is estimated 1500 direct and 2700 indirect jobs could be lost in the Shepparton region.

Shepparton mayor Jenny Houlihan said workers faced an unknown future.

"The $25 million that the government refused to let go today will be eaten up in unemployment benefits," she said.

Australian Manufacturing Workers' Union national secretary Paul Bastian said workers had been improving productivity, but other factors were affecting the business, such as the dumping of cheap imports and the high dollar.

"The government directly and indirectly subsidises mining, agriculture, finance, fisheries and other important Australian industries and yet it is continually cutting investment in manufacturing," Mr Bastian said.

"Soon, when we go to the supermarket ... there will be nothing left made in Australia."

Victorian Opposition Leader Daniel Andrews said if state premier Denis Napthine could not convince Mr Abbott to stump up $25 million for SPC Ardmona, he struggled to see how Dr Napthine could secure $300 million for Toyota as it considers its future.

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Police given bus CCTV after woman pinned

A woman has died in hospital after being pinned under a bus for two hours in Sydney's CBD. Source: AAP

AFTER the death of two pedestrians on the same day in Sydney, police are urging the public to be more careful crossing roads.

A 51-year-old Granville woman died on Wednesday night after being hit by a bus in Sydney's CBD. She was trapped in its axles for two hours before emergency services freed her and she died only hours after undergoing emergency surgery.

Earlier that day, an 83-year-old man died instantly when he was hit by a truck in Monterey in southern Sydney while crossing the road.

NSW Police Traffic and Highway Patrol operations commander Stuart Smith said the deaths were tragic.

"It was a dreadful day on NSW roads," he told reporters on Thursday.

Superintendent Smith said crash investigators are looking into both accidents, including CCTV footage from the State Transit bus as well as an examination of traffic and pedestrian control records.

"It's a complex calculation that can only be provided once a re-enactment is provided," he said.

Police say the bus was turning right when it struck the woman, and the 70-year-old driver was provided with counselling.

"We believe he is a very experienced driver with the State Transit Authority," Supt Smith said.

He could not comment on whether jaywalking was a factor in the accident but reminded pedestrians and drivers to look out for each other.

"It is a place where we all need to be aware and to keep a proper lookout," he said.

He warned people about the dangers of jaywalking and using electronic devices such as mobile phones and MP3 players.

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Cruise ship returns with sick toll at 700

A cruise ship on which nearly 700 passengers and crew fell ill has arrived home in the US. Source: AAP

A CRUISE ship on which nearly 700 passengers and crew fell ill has arrived at its home port in the US after a Caribbean voyage was cut short by the outbreak.

One woman aboard the Explorers of the Sea yelled, "We made it!" as the ship docked Wednesday at New Jersey. Other passengers, with blankets wrapped around them, stood on deck to watch the ship pull in.

The cause of the outbreak is yet to be determined.

Bill Rakowicz of Canada said he suffered from vomiting, pain and diarrhoea and that his experience was simply "awful".

The US Centres for Disease Control and Prevention said its latest count puts the number of those sickened at 630 passengers and 54 crew members. The ship was carrying 3050 passengers.

Health investigators suspect norovirus, but lab results are not expected until later this week.

If norovirus is to blame, it would be one of the largest outbreaks in last 20 years, the CDC said. A 2006 norovirus outbreak on a Carnival Cruise Lines ship also sickened close to 700.

Norovirus - once known as Norwalk virus - is highly contagious. It can be picked up from an infected person, contaminated food or water or by touching contaminated surfaces. It causes bouts of vomiting and diarrhoea for a few days.

The CDC said it recommended to cruise operator Royal Caribbean that people who still have symptoms be housed in nearby hotels or seen at medical facilities before travelling home.

CDC investigators boarded the ship during its US Virgin Islands Port call on Sunday. They said no single food or water source or other origin has been identified.

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Treasury Wines tank on share market

Treasury Wine Estates has issued a profit warning in the wake of weaker than expected sales. Source: AAP

TREASURY Wine Estates has been hammered on the stock market, with its shares falling by 20 per cent after it issued a profit downgrade due to weaker sales in Australia and China.

The company behind Penfolds and Wolf Blass has cut its full year earnings forecast from between $230 million and $250 million to between $190 million and $210 million.

It expects first half earnings, which will be announced in February, to be between $41 million and $46 million, down from $73 million last year.

Treasury Wine shares fell to $3.64, their weakest price in almost two years, wiping $589 million from the value of the company.

Weaker than expected sales in Australia, following the company's decision to lift prices on some products and focus less on Christmas promotions, had contributed to the profit downgrade, it said.

A decline in Chinese demand for premium wine had also hit sales volumes.

Treasury Wine also said it had continued to reduce shipments to the US while increasing investment across the group, especially in Asia.

The profit downgrade is the latest in a string of bad news for Treasury Wine, which last year poured more than $35 million worth of excess or aged commercial stock down the drain in the US.

The controversial move, which was part of a broader $160 million writedown, ultimately led to the departure of chief executive David Dearie.

Law Firm Maurice Blackburn and litigation funder IMF last October announced funding of a class action against Treasury Wine, alleging the company misled the market and breached its continuous disclosure obligations in its communication of the financial impact of over-stocked US distributors to investors.

On Thursday, Maurice Blackburn managing principal Ben Slade said the latest profit downgrade raised "questions of transparency" about the company's operations.

"TWE's announcement this morning suggests that continuous disclosure requirements may not have been complied with," he said in a statement.

"We are confident that the company's shock $190 million downgrade announcement in July last year was indicative of such a breach. It may have happened again."

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