Qantas working to settle with Rolls

Sydney: Australia's Qantas Airways is working towards a commercial settlement with Rolls-Royce over last year's mid-air engine explosion, its chief executive said, as the airline rebuilds its image tarnished by the incident which temporarily grounded its fleet of A380 aircraft.

Alan Joyce said the airline's prime objective was reaching a settlement with Rolls-Royce outside of court, but the airline has already initiated a lawsuit in an Australian court in case the settlement is not possible.

Primary objective

"We are talking to Rolls and our primary objective is to resolve this commercially. The dialogue will continue as long as it takes," Joyce told Reuters in an interview yesterday.

Dublin-born Joyce, who described the November 4 safety scare as the most "intense" day of his aviation career, said Qantas was recovering both commercially and from a public relations perspective, denying suggestions the airline's brand had been damaged permanently.

He indicated bookings from passengers wanting to fly on the reinstated A380 services were strong, while a healthier global economy pointed to a stronger year financially as yields recovered from the worst downturn in aviation history.

Qantas shares have fallen about 13 per cent since the November 4 A380 incident over Indonesia, although analysts attribute part of the decline to soaring fuel prices, heavy snow in Europe and severe floods in Queensland.

"I joked at the time that all we need is the locusts," Joyce says of the string of hurdles which have hit the aviation industry since he took the top job at Qantas over two years ago.

Estimated impact

Analyst estimates of the impact of the A380 incident, which grounded Qantas' six A380 aircraft vary from A$65 million (Dh237.35 million) to $80 million Australian.

Macquarie analysts said this week they expected Qantas' 2011 fuel bill to grow to A$3.7 billion before rising to A$4.4 billion in 2012, lowering earnings estimates by 15 to 20 per cent.