Airline shares hold up despite bombs

SYDNEY - Qantas Airways said yesterday that about 600 people had abandoned plans to travel to Bali after the bombings.

"About half have chosen to use their tickets to fly somewhere else, and the other half have just cancelled their tickets," a Qantas spokesman said yesterday.

It was too early to estimate the financial costs as the company was allowing passengers until October 30 to change their plans.

Qantas operates about 20 flights into Indonesia a week, including 11 flights to Bali. Ten of the Bali flights are through its Australian Airlines subsidiary and one is a Qantas flight.

Two relief planes have returned from Bali with a total of 304 passengers, and a third relief plane was on its way, the spokesman said.

Qantas shares fell as much as 1.2 per cent to A$3.33 at the open, but recovered to trade down 1c at A$3.36 by the close of trade.

The airline industry, which is sensitive to external shocks, racked up losses of more than US$40 billion ($58 billion) in the past five years as it reeled from the September 11 attacks, war in Iraq, the Sars virus, soaring fuel prices and bombings in Bali, Madrid and London.

Security experts said the latest Bali bombings bore the hallmarks of Jemaah Islamiah, a network seen as the regional arm of al Qaeda and blamed by Indonesia for a number of attacks, including the 2002 Bali nightclub bombings that killed 202 people.

Qantas, with 38,000 staff, has been slashing costs in a three-year A$1.5 billion restructuring plan that ends in June, although it plans to reduce costs further by making an extra A$1.5 billion in savings over fiscal 2007 and 2008.

The airline's 65 per cent share of the Australian market and about 600 international flights a week to 83 destinations, combined with its cost-cutting programme and fuel surcharges, helped it post successive record annual profits in 2004 and 2005.

- REUTERS