Jetstar accused of misleading fees


Last updated 10:33 21/08/2014

Jetstar is being accused of failing to tell passengers about extra fees, in an Australian court.

Airlines said the fees they charge on flight bookings are common and have been used for more than a decade, in their defence to an ­Australian Competition and Consumer Commission court case they are ­misleading consumers.

Jetstar’s barrister, Matthew Darke, told the Australian Federal Court that the history and prevalence of booking fees would be presented to the court as part of its defence to allegations of drip pricing.

The charges were common industry practice and had been used in one form or another by airlines including Qantas and Rex since it was introduced by Qantas in 2003.

“The familiarity of consumers with booking and service fees and like charges has the potential to bear on the issue of what consumers are likely to understand of what a website is likely to convey,” Darke said.

The evidence could require the reconstruction by an expert of the websites in their historical form, he said.

The ACCC is bringing action against Jetstar alleging it misled customers by failing to adequately disclose a booking and service fee for particular types of payments in its advertising.

The ACCC is bringing the same action against Virgin.

Jetstar, and its owner Qantas, denies that its website did not adequately disclose booking fees relating to its flights.

The airline argues its website reveals that some payment methods for its flights incur a fee and customers have a choice as to whether to pull out before committing to the transaction.

Customers were required to pay an extra A$8.50 (NZ$9.43) for domestic flights if ­payment was made by a credit card that was not a Jetstar credit card or by PayPal.

The ACCC argues the airlines’ conduct amounts to drip pricing, where the actual price is higher at the end of the transaction compared with the advertised price because of extra fees and charges added incrementally during the booking process.

The matter was set down for a pre-trial conference on November 17.

Judge Melissa Perry said the Jetstar and Virgin matters were likely to proceed together rather than sequentially.


Guangzhou Evergrande coach Marcello Lippi erupts following ACL defeat to Western Sydney Wanderers

August 21, 2014 – 5:53AM

Dominic Bossi

Sports reporter

Guangzhou Evergrande coach Marcello Lippi sensationally stormed out of a media conference following their shock 1-0 loss to Western Sydney Wanderers but not before unleashing a heated attack towards the referee and Wanderers’ midfielder Vitor Saba.

The first-leg quarter-final defeat to the Wanderers at Pirtek Stadium will go down as an historic moment for the 66-year-old World Cup and Serie A winning coach who ran on to the field to protest the dismissal of two of his players in the late stages of the game before erupting in the post-match press conference, attacking Emirati referee Mohammed Abdulla Hassan Mohamed.

Marcello Lippi has to be held back after his side received their second red card.

Marcello Lippi has to be held back after his side received their second red card. Photo: Brendan Esposito

The Italian coach did not hide his anger as he ranted to the media about his dismay at the officiating of the match and the behaviour of some of the Wanderers’ players before walking out of the press conference without fielding a single question, leaving his two translators to relay his tirade.

Lippi criticised the referee for missing an alleged hand-ball in the box in the first half that would’ve given the reigning champions an early penalty as well as another foul by Daniel Mullen that he believes should have warranted a second yellow-card. Mohamed awarded Evergrande the foul but gave Mullen a talking-to rather than a dismissal.

“To be honest the first was a little bit far away but the second [red card] was really close to me so I saw it. I also saw that in the during of the match number 33 [Mullen] had to go for a second yellow card…. But I don’t know why the referee didn’t see this. Also in the first half we had a good chance to score and there was a handball in the opening and also the referee didn’t see it,” Lippi said.

Disbelief: Guangzhou Evergrande react to one of the red cards.

Disbelief: Guangzhou Evergrande react to one of the red cards. Photo: Brendan Esposito

“I’ve been in every competition in the world – the World Cup, European Champions League, Club World Championships – everything. I know it’s wrong to go on the field, but at the first moment I just wanted to ask the referee why  – But he talked to me like a child – I also tried to apologised to the ref, I knocked on the door [after the game] and I tried to say it wasn’t in protest, I wanted information on this.”

Lippi was critical of the Wanderers new Brazilian playmaker, Vitor Saba, who he accused of diving. Lippi was seen to have grabbed hold of Saba during a chaotic on-field protest involving the entire Guangzhou Evergrande bench.

“Number 10 with the beard, he played in Italy. It’s not good in football to be falling down and to be so fake, not in the champions league,” Lippi said.

Wanderers coach Tony Popovic was puzzled when he heard of Lippi’s tirade, saying his opponent had nothing to complain about.

“I don’t know what he’s upset about,” he said. “That’s his interpretation but the referee has made a decision. Their coaches can not go on the pitch, I’m sure if I went on the pitch I would’ve been sent off so I can’t condone their coaches going on the pitch. We all disagree with decisions that referees make, we voice our opinion from the sideline but we don’t go on the pitch and man-handle a player.”

Meanwhile, the Wanderers are expected to announce their fifth and final visa-player for next year with the signing of Nigerian left-back Seyi Adeleke set to be confirmed on Thursday.

The signing of the 22-year-old defender effectively ends any chances of the club signing a high-profile foreign marquee to replace Shinji Ono.

Adeleke arrives from Serie A club Lazio where he spent three seasons but did not make a senior appearance as he spent the bulk of his career loaned out to smaller clubs. He spent two seasons in the lower leagues of Italy with Salernitana and Pergolettese as well as a season in Switzerland with FC Biel-Bienne.

Source : The Sydney Morning Herald

Melbourne Victory set sights on winning Football Federation Australia Cup

August 21, 2014 – 8:16AM

Scott Galloway of Melbourne Victory.

Scott Galloway of Melbourne Victory. Photo: Getty Images

PERTH Melbourne Victory have set their eyes on winning the inaugural FFA Cup following a solid 2-0 win over Western Australia’s Bayswater City in Perth on Wednesday night.

Victory won the final match of the round of 32 of the inaugural knockout competition featuring both A-League and State league clubs to now advance to the round of 16 where their next opponents will be drawn on Friday night.

Melbourne were outstanding in the first half creating a host of scoring opportunities but ended up with just the one goal thanks to Kosta Barbarouses before then being outplayed by a Bayswater City team, that leads the WA National Premier League, in the second.

Victory still managed to score a second goal thanks to Archie Thompson and coach Kevin Muscat now wants to win the FFA Cup.

“It’s a wonderful initiative, it’s been a long time coming and I certainly want to do well in this cup.

“I want to win it and we want to win it as a football club,” Muscat said.

“As time has gone on we’ve seen what sort of reception it’s got in this first round of 32 and that goes to show how well it’s been accepted by the public.”

Plenty of attention will be focused on how Thompson, Barbarouses and former Brisbane Roar championship-winning star Besart Berisha work together in attack for Victory this season.

Muscat liked much of what they showed on Wednesday night at the WA Athletics Stadium with Thompson and Barbarouses both scoring after being set up by terrific last passes from Berisha.

“I thought in the front third we looked very, very dangerous but again in the first half when we were so dominant we got a little bit too narrow too soon, and suffocated ourselves,” he said.

“The two goals we scored were very good and it was good football which is a good sign going forward.”

While Muscat isn’t yet content with his squad ahead of the A-League season, he is happy with how it’s progressing with Carl Valeri and Matthieu Delpierre playing well, and Socceroo Mark Milligan tracking well following the World Cup and a knee injury with 30 minutes off the bench.

“We are still active and we still want to improve the squad, and still have opportunities to improve the squad, but apart from Millsy everyone else is at a decent level,” Muscat said.

Bayswater City coach Chris Coyne was proud of his team’s effort to be so competitive against a top-class opponent.

“After the first half I thought we settled down. Some of those boys have never played in that occasion before, but once their nerves settled they were superb in the second half,” Coyne said.

“Bar that goal that Melbourne got with a bit of class from Archie I thought we were by far the better side in the second half.”


Source : The Sydney Morning Herald

Qantas frequent flyer float plan put on ice

August 21, 2014 – 7:13AM

Michael Smith and Jamie Freed

Analysts estimate the entire ­business is worth between $2.5 billion and $3 billion.

Analysts estimate the entire ­business is worth between $2.5 billion and $3 billion. Photo: Glenn Hunt

Qantas Airways will formally shelve plans for a partial float of its $2.5 billion loyalty business next week, ending months of speculation about whether the airline will reduce ties with one its most profitable businesses.

It is understood management will tell the board it does not want to pursue a partial float or trade sale of Qantas Loyalty after examining the option for the past nine months.

The decision is expected to be ­supported by the board, which will meet next week ahead of the airline’s annual results release next Thursday.

Qantas has been exploring floating 30 to 40 per cent of the airline’s ­10 million-member frequent flyer program in a process being run by Macquarie and Citi. Analysts estimate the entire ­business is worth between $2.5 billion and $3 billion.

The move was part of a wider ­strategic review. Other options, such as splitting the domestic and international business to attract more foreign investment, remain under consideration. But it is understood the frequent flyer portion of the review will be formally killed off after a board decision next week.

A trade or private equity sale of ­Qantas Loyalty was ruled out earlier in the review because potential buyers wanted more than 50 per cent ownership of the business and the airline was unwilling to relinquish control.

Qantas chief executive Alan Joyce is expected to announce the decision on August 28 when the airline releases its annual results and gives the market an update on the structural review and its transformation program, which is aiming to cut $2 billion of costs over the next three years.

Qantas on Wednesday declined to comment when asked about the status of the loyalty business review.

The Australian Financial Review’s Street Talk column had on Wednesday reported a partial float appeared increasingly unlikely.

While a float was expected to attract strong demand from new investors, it is understood management concluded the risks of selling a strong earnings and cash flow stream outweighed the short-term benefits. The main upside was short-term cash to reduce debt and unlocking value in the division which is worth more than Qantas’ entire market capitalisation.

While some shareholders were open-minded about the idea, the potential threat of reduced earnings was also seen as a negative.

Qantas has doubled the membership of the loyalty program from 5 million in 2008 to more than 10 million.

The division posted a record first-half result in February, with underlying earnings before interest and tax at $146 million, up 7 per cent from the prior year. Underlying EBIT in the 2013 financial year rose 13 per cent to $260 million.

Many analysts did not support selling the business, warning it would be a quick-fix solution for the balance sheet in the short term but undermine the airline in the longer term.

“We believe existing shareholders run the risk of divesting a business they already own to pay down debt and to pay for a cost out program that ultimately may not generate as good a return as the Qantas Frequent Flyer business,” Shaw Stockbroking analyst David Fraser told clients.

The division’s link to the airline was also viewed as too important to water down. The business receives revenue from selling frequent flyer points to Qantas and to outside partners like credit card companies, Woolworths and other retailers.

A float of the business would have required Qantas Loyalty to strike a firm agreement with Qantas on the ­percentage of seats available for ­frequent flyer redemptions, as has occurred with other airline loyalty ­program floats in Canada and Brazil. While members can earn points with 100 partners, flights still account for about 80 per cent of redemptions for Qantas Loyalty.

The decision to shelve a float of Qantas Loyalty is likely to be supported by the airline’s largest shareholder, Balanced Equity Management. Investment manager Andrew Sisson earlier this year said he would keep an “open mind” about the prospect of a float, despite being opposed to the sale when it was raised as a possibility in previous years.

However, there were doubts in the market about whether any details or reasoning could satisfy his concerns over whether it would prove value-adding in the longer term.

BT Investment Management and Colonial First State, which had been open to the idea of a float on the basis that it would unlock value in the business, have both since sold down part of their stakes. Qantas has been looking at other options for improving its balance sheet, including the sale of airport terminal leases in Sydney and Melbourne, following the sale of its Brisbane lease in February. Talks with Sydney Airport and Melbourne Airport are advanced, but no sales agreement is expected to be reached by next week.

Qantas is expected to report a full-year pre-tax underlying loss of $750 million next week, but the bottom line loss could surpass $1 billion including restructuring charges and impairments. The loyalty business is expected to be the airline’s most profitable division.

The management team will be under pressure to provide more details about its plans to slash controllable costs in its international division by one-third, or $1 billion a year.

A fund manager with shares in Qantas this week said there was not yet enough detail to make a call on whether such cuts could be achieved. “They are have to give some sort of guidance on these sorts of things [next week] I would have thought,” the fund manager said.

Source : The Sydney Morning Herald

Simon Corbell warns tenants they may be liable for lost rent in a declining market

August 20, 2014 – 11:24PM

Henry Belot

Canberra Times Reporter

A slump in the ACT rental market and increasing vacancy rates has led to a number of Canberrans being hit with unexpected costs when they break their residential lease.

With property owners increasingly forced to lower rent to entice replacement tenants, the blunt message from Attorney-General Simon Corbell is that it’s up to the present tenants to pay the difference.

Under the Residential Tenancy Act, tenants could be reimbursing the owner for up to 25 weeks after they terminate their lease, plus the cost of readvertising the property until a new tenant is found.

Although the situation has existed since 1997, the declining rental market has thrust it back into the spotlight.

An ACT Tenants Union spokeswoman said enquiries about breaking a lease were one of the top two categories of enquiry, particularly in relation to advertising costs and rental payment.

She said many Canberrans were unaware of the provision, leading to confusion and surprise when they terminated their lease and found themselves suddenly paying double rent.

”It’s a strange situation where the market is both beneficial for tenants but also has difficulties for tenants, particularly if they are made redundant in this current job market,” she said.

According to June quarter figures released by Australian Property Monitors, the median weekly rent for houses in the ACT fell by 6.3 per cent to $450.

The average weekly rent for units in Canberra fell by 6.1 per cent to $385, which meant units transitioned from being the third most expensive in the country during April to among the cheapest.

Real Estate Institute of the ACT chief executive Ron Bell said declining rental prices in Canberra have only recently been felt by real estate agents and owners.

”Twelve months ago people were just walking in and saying ‘I can’t afford this’ and then walking straight out – there was quite a lot of that,” he said.

Australian Property Monitors Domain Group senior economist Andrew Wilson believes Canberra’s rental woes are due to subdued housing conditions that may continue to exist for some time.

”There’s a consistency about the fall over the year for both houses and units, and I do think it’s just generally a lack of demand for rental properties in Canberra,” he said.

”I think that does reflect what is an underperforming local economy concerned about job security.”

The Attorney-General’s clarification comes just one month after the ACT government announced a wide-ranging review of the Residential Tenancy Act 1997, which was welcomed by the Tenants Union and remains open for community input until September 12.

Mr Corbell said the existing legislation ensures ”lessors are only able to recover what they would have received under a lease agreement if the tenant had not terminated it, and then only up to a maximum amount of 25 weeks’ rent plus costs of readvertising”.

In a discussion paper accompanying the announcement of the review, the ACT government indicated public service job cuts in coming months may further increase the vacancy rate in the ACT.

Tenants Union of NSW policy officer Ned Cutcher said tenants in NSW face the same possibility of being held liable for rent lost, although this was uncommon given the state of the real estate market in Sydney.

But Mr Cutcher said a review of the NSW Residential Tenancies Bill in 2009 introduced an opt-in break-fee provision to allow tenants to break a lease more easily and be spared from a number of administrative fees.

The ACT Tenants Union spokeswoman said such arrangements could be considered as part of the ACT government’s review into the tenancies act.

Mr Corbell said anyone with concerns regarding the arrangements between tenants and owners could make a submission to the government review.

Source : The Canberra Times

Restructuring boosts earnings at Ports of Auckland

5:00 AM Thursday Aug 21, 2014

Container volumes recovered and the volume of non-containerised freight increased. Picture / Brett Phibbs
Container volumes recovered and the volume of non-containerised freight increased. Picture / Brett Phibbs

Ports of Auckland said it had reached its goal of achieving a 12 per cent return on equity two years ahead of schedule with a net profit of $74 million for the year to June 30, up 90 per cent on the previous year.

The Auckland Council-owned port said the result was driven by a buoyant economy and efficiency gains arising from a restructuring that started in 2011. The company’s statement of corporate intent sets out a return on equity forecast of 12 per cent by 2016.

Ports of Auckland declared a dividend for the year of $66.6 million, up 126 per cent on the 2012/13 dividend.

Chief executive Tony Gibson said the port’s container volumes recovered and the volume of non-containerised freight increased to record levels, thanks to a buoyant economy.

“Productivity has been increasing since restructuring started in 2011 and has hit new highs this year.”

At the time Ports of Auckland said the changes needed to be made to the way the company operated if it was to provide an adequate financial return to the council.

Gibson said 60 per cent of the workforce was now on a flexible schedule but that the company faced challenges in the year ahead.

In June, the Port of Tauranga, shipping giant Maersk Line, and Fonterra-backed logistics company Kotahi announced that they had signed contracts that involved Kotahi taking a small stake in the port and Maersk putting more containers through its terminals over the next decade.

As it stands, about 90 per cent of Kotahi’s business goes through the Port of Tauranga.

Gibson said the Kotahi deal could potentially deprive the port of up to 10 per cent of its container volume. But he said this year the company would make strategic capital investments which would help lift productivity and capacity further.

These included a new tug, straddles and crane, a longer container wharf and a new truck grid.

The company was building new supply chain partnerships that would deliver greater efficiency and cost savings for importers and exporters, he said, using the recently-announced joint venture with Napier Port and Icepak in an inland port at Palmerston North as an example.


Source : The New Zealand Herald