Yair blog

Qantas profits quadruple despite superjumbo scare

SYDNEY (AFP) – Australian airline Qantas shrugged off a safety scare involving its flagship A380 superjumbos to post a four-fold increase in half-year net profits to Aus$241 million (US$240.6 million) on Thursday.

Underlying profit before tax rose 56 percent to Aus$417 million, as sales grew 10 percent to Aus$7.59 billion over the second half of last year, despite November's mid-air engine blast which grounded the giant A380s.

"This result was achieved while overcoming significant operational challenges during the period including disruptions to the A380 network from November," Qantas said in a statement.

In signs aviation is recovering from the global slowdown, Qantas flights raked in pre-tax profits of Aus$165 million, while budget offshoot Jetstar earned a record Aus$143 million. The company will not pay an interim dividend.

"Qantas and Jetstar are now the two most profitable domestic airlines in Australia, demonstrating the strength of our two-brand strategy and capacity to service and grow both the business and leisure sectors," said chief executive Alan Joyce.

"The group's response to events that included the A380 Rolls-Royce engine failure, and subsequent temporary grounding of the Qantas A380 fleet in November, also showed us to be flexible, adaptable and resilient."

On November 4, a Qantas Airbus A380 made an emergency landing in Singapore when one of its four Rolls-Royce engines exploded minutes after take-off, raining debris on an Indonesian island and blowing a hole in the wing.

The hair-raising incident sent jitters through airlines operating A380s, and prompted extensive safety checks which revealed a flaw in the British-made Rolls-Royce engines.

Qantas, which only resumed its full A380 schedule last month, said the scare had delivered a financial hit of Aus$80 million, plus Aus$100 million in repair costs which were covered by insurance and its contract with Rolls-Royce.

The airline said it was still discussing compensation with the engine-maker, but was yet to strike an agreement.

"Qantas remains in discussions with Rolls-Royce in relation to compensation for the economic loss incurred. No agreement has been reached at this stage," it said.

The airline also said it would boost its fleet by hiring or extending leases on 31 aircraft, and buying 10 Fokker 100s for domestic flights, as the "general operating environment continues to improve".

But it warned that widespread flooding and the impact of top-strength Cyclone Yasi in northeastern Australia would hit second-half pre-tax profits to the tune of Aus$70 million.

However, Qantas estimated that before-tax profits for the financial year ending in June would be "materially stronger" than the 2010 figure of Aus$377 million.

Macquarie analysts warned that future profits may be hit by higher fuel costs, despite Qantas raising its fuel surcharge this month.

"In a rising fuel environment we struggle to see how Qantas will be able to achieve the necessary price increases to offset higher fuel costs, in light of increased domestic competition," the company said.

At 12:15 pm (0115 GMT), Qantas shares were 3.77 percent higher at Aus$2.48.

-- Dow Jones Newswires contributed to this report --

Qantas profits quadruple despite superjumbo scare

SYDNEY (AFP) – Australian airline Qantas shrugged off a safety scare involving its flagship A380 superjumbos to post a four-fold increase in half-year net profits to Aus$241 million (US$240.6 million) on Thursday.

Underlying profit before tax rose 56 percent to Aus$417 million, as sales grew 10 percent to Aus$7.59 billion over the second half of last year, despite November's mid-air engine blast which grounded the giant A380s.

"This result was achieved while overcoming significant operational challenges during the period including disruptions to the A380 network from November," Qantas said in a statement.

In signs aviation is recovering from the global slowdown, Qantas flights raked in pre-tax profits of Aus$165 million, while budget offshoot Jetstar earned a record Aus$143 million. The company will not pay an interim dividend.

"Qantas and Jetstar are now the two most profitable domestic airlines in Australia, demonstrating the strength of our two-brand strategy and capacity to service and grow both the business and leisure sectors," said chief executive Alan Joyce.

"The group's response to events that included the A380 Rolls-Royce engine failure, and subsequent temporary grounding of the Qantas A380 fleet in November, also showed us to be flexible, adaptable and resilient."

On November 4, a Qantas Airbus A380 made an emergency landing in Singapore when one of its four Rolls-Royce engines exploded minutes after take-off, raining debris on an Indonesian island and blowing a hole in the wing.

The hair-raising incident sent jitters through airlines operating A380s, and prompted extensive safety checks which revealed a flaw in the British-made Rolls-Royce engines.

Qantas, which only resumed its full A380 schedule last month, said the scare had delivered a financial hit of Aus$80 million, plus Aus$100 million in repair costs which were covered by insurance and its contract with Rolls-Royce.

The airline said it was still discussing compensation with the engine-maker, but was yet to strike an agreement.

"Qantas remains in discussions with Rolls-Royce in relation to compensation for the economic loss incurred. No agreement has been reached at this stage," it said.

The airline also said it would boost its fleet by hiring or extending leases on 31 aircraft, and buying 10 Fokker 100s for domestic flights, as the "general operating environment continues to improve".

But it warned that widespread flooding and the impact of top-strength Cyclone Yasi in northeastern Australia would hit second-half pre-tax profits to the tune of Aus$70 million.

However, Qantas estimated that before-tax profits for the financial year ending in June would be "materially stronger" than the 2010 figure of Aus$377 million.

Macquarie analysts warned that future profits may be hit by higher fuel costs, despite Qantas raising its fuel surcharge this month.

"In a rising fuel environment we struggle to see how Qantas will be able to achieve the necessary price increases to offset higher fuel costs, in light of increased domestic competition," the company said.

At 12:15 pm (0115 GMT), Qantas shares were 3.77 percent higher at Aus$2.48.

-- Dow Jones Newswires contributed to this report --

THE BOOK SHELF: Gerald Bordman's Updated "American Musical Theatre," Plus "Diaghilev" & Three Librettos

We page through the Fourth Edition of "American Musical Theatre: A Chronicle"; newly published librettos of Oklahoma!, Sound of Music and Avenue Q; and a biography of Serge Diaghilev.

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Gerald Bordman altered the scope of American musical theatre history — and the weight of the American musical theatre history bookshelf — in 1978 with his 750-page "American Musical Theatre: A Chronicle." Here was a book that attempted to tell us something about each and every musical produced over the course of more than 100 years. That's right; Bordman went back to the 1866-67 season — who knew there was an 1866-67 Broadway season? — and gave us at least some information about each and every musical he could find. New York shows, as well as major musicals produced elsewhere across the country. He didn't find everything; once in a while you might be looking for a show that "wasn't in Bordman," but most of them were in the book.

The information included the date of the opening, the theatre, and a brief (or not so brief) discussion of the plot and people involved. Length of discussion ranged from a short paragraph to more than two pages, depending on the importance of the show. Or the importance Bordman ascribed to the show. Anyone writing such a book, inevitably, is likely to be influenced by their personal preferences. Bordman's can be inferred by a glance at the table of contents. What he called Act Four, being his fourth main section of the book, was called "The Golden Age of the American Musical, 1924-1937."

Gee, that seems mighty early to me for the "Golden Age." Before Rodgers & Hammerstein, before Lerner or Loewe, before the arrival of Styne, Bernstein, Loesser, Sondheim, Bock, Kander, Coleman, Herman and more. Bordman's chapter covering 1951-1965 — the years of The King and I, My Fair Lady, The Music Man, West Side Story, Gypsy, How to Succeed in Business without Really Trying, She Loves Me, Hello, Dolly! and Fiddler on the Roof — is subtitled "Lowering Standards."

Bordman went on to prepare a second edition in 1992 and a third in 2001; while the American musical theatre admittedly led a problematic existence through the past decades, one can only surmise that Bordman was happiest when writing about the musicals of the golden age. His golden age, that is, the mid-year of which was 1930. This did not negatively affect the importance of "American Musical Theatre"; it remained the only book of its kind, and an invaluable one. But it did put kind of a filter on the discussion of the modern-day American musical.

For the new Fourth Edition, Bordman and his publishers have seen fit to bring in a new voice. Richard Norton, author of the three-volume "Chronology of American Musical Theater," has provided the updated material, encompassing the first ten years of the 21st century. This new decade, extending through (fittingly) The Scottsboro Boys and Bloody Bloody Andrew Jackson, encompasses 56 pages — which is almost more than Bordman spent on the '80s and '90s combined. Norton considers the current-day musical in the same manner that Bordman considered his golden age, putting the book back on track. "American Musical Theatre: A Chronicle [Fourth Edition] by Gerald Bordman with updates by Richard Norton" [Oxford] now runs over 1,000 pages, and has something of a textbook feel to it. Happily, it seems to be crisper and cleaner than the earlier editions, easier to read and easier for browsing.

[PAGE]Applause Books has for some time now been refurbishing the book shelf with librettos of musicals, mixing new hits with reprints of older titles. They have just published three selections in fresh new softcover editions: "Oklahoma!: The Complete Book and Lyrics of the Broadway Musical" by Richard Rodgers and Oscar Hammerstein II; "The Sound of Music: The Complete Book and Lyrics of the Broadway Musical" by Richard Rodgers, Oscar Hammerstein II, Howard Lindsay, Russel Crouse; and "Avenue Q The Musical: The Complete Book and Lyrics of the Broadway Musical" by Robert Lopez, Jeff Marx, and Jeff Whitty. Oklahoma! (which has a new introduction by Ted Chapin) and Sound of Music (with a new introduction by Timothy Crouse) are old standards, if recently out-of-print. Avenue Q (without introduction) is the new kid on the block; as fans of the show are aware, the book and lyrics are both filled with rude and explosive laughs. Each book includes a section of photographs of the original and subsequent companies.

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Chronicles of the international artistic life of the first quarter of the twentieth century are frequented by the larger-than-life personality of Serge Diaghilev and his revolutionary work with the Ballets Russes. Born into a wealthy Russian family — albeit one that lost all its money before he turned 20 — Diaghilev had champagne tastes. After flitting through the arts, he eventually settled on the world of ballet, which he more or less revitalized and recreated with a little help from his friends. You can do that when your friends are named Nijinsky, Stravinsky, Prokofiev, Debussy, Ravel, Balanchine, Matisse, Picasso and more.

Yes, Serge turns up in numerous studies and biographies, but Dutch art scholar Sjeng Scheijen has rewritten the book on Diaghilev, if you will. "Diaghilev: A Life" by Sjeng Scheijen [Oxford] (and translated by Jane Hedley-Prole and S.J. Leinbach) recreates the world Diaghilev inhabited, in many cases presenting "new" information and revised interpretations that have the ring of truth to them. Yes, it's a fascinating story; the dramatis personae above almost guarantee that. But in Scheijen's hands, this is quite a read, quite a life, and quite a book.

(Steven Suskin is author of the recently released updated and expanded Fourth Edition of "Show Tunes" as well as "The Sound of Broadway Music: A Book of Orchestrators and Orchestrations," "Second Act Trouble" and the "Opening Night on Broadway" books. He also pens Playbill.com's On the Record and DVD Shelf columns. He can be reached at Ssuskin@aol.com.)

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Passionate about theatre books? See what thehas on its shelves.

"G.I. Joe" sequel narrowing in on director

LOS ANGELES (Hollywood Reporter) – Directors F. Gary Gray and Jon M. Chu are looking like the hot candidates to direct Paramount Pictures' "G.I. Joe" sequel.

The franchise follow-up is a high-priority project for the studio, which hopes to have production underway by June for a 2012 release.

Producer Lorenzo di Bonaventura has met with a number of directors in recent days, including Gray, Chu and "Unknown" director Jaume Collet-Serra. Paramount execs will commence their talks this week.

Chu, of course, is no stranger on the studio lot, having directed "Justin Bieber: Never Say Never," which opened to $29.5 million last weekend. Before that, he directed two installments in Disney's "Step Up" dance franchise.

For that matter, neither is Gray, who directed "The Italian Job" for Paramount to $168 million worldwide in 2003. He was last in theaters with the 2009 action thriller "Law Abiding Citizen."

Released in August 2009, "G.I. Joe: The Rise of the Cobra" grossed $150.2 million domestically and $152.3 million internationally for a total of $302.5 million worldwide.

"Cobra" was directed by Stephen Sommers, who previously announced he wouldn't be returning to the franchise.

(Editing by Zorianna Kit)

Yahoo CTO on What It Takes to Compete

Since his appointment as Yahoo's CTO last June, Raymie Stata has been on an intense ride. He is part of the executive team charged with building Yahoo's technology strategy and spurring innovation to drive growth and attract more users to the site. Stata has been with Yahoo since 2004 and was previously its chief architect. Other members of the team include Chief Scientist Prabhakar Raghavan and Stata's boss, Chief Product Officer Blake Irving, both of whom report to CEO Carol Bartz.

At the same time, Stata is learning the ropes as CTO, a role Yahoo redrew after last year's departure of Ari Balogh, who was CTO and also chief product officer. IDG News Service talked with Stata recently about his challenges and accomplishments as CTO, and about what Yahoo is doing to jumpstart innovation in 2011, a pivotal year for the company. An edited version of the interview follows:

IDG News Service: What do you focus on as CTO?

Raymie Stata: The CTO role has changed quite a bit recently at Yahoo. Historically, it had been an operations CTO, head of all engineering. Now we have a [separate] CPO and CTO and shifted into a functional model for the CTO. I set the technology direction but don't actually manage all the engineers. That's a big shift for the company. We're still working that out.

An important focus area for me is technology exploration and advancement, which involves looking at new ideas and doing early R&D work to get [projects] off the ground.

Within technology exploration, mobile applications is one area of focus. We're looking at tablets as a proving ground for Web experiences of the future. We're pushing our advance innovation thought and development in that direction, versus on the PC side.

I also focus on our content platform. It's an extensive back-end content management, personalization and optimization system that we've been building over the past 18 months. It will power everything we do, on PCs, mobile [devices], tablets, across the board, and also all types of content. Bringing all our content together in a very powerful platform is a huge area of focus for us. This year you'll start to see a lot of innovation coming to market because we have that underneath us.

Another area of focus is cloud. We're on our second generation of cloud infrastructure here. Hadoop is part of the story but it's not all. There's a lot going on under the covers.

IDGNS: You've been on the job for about eight months. What's been your biggest challenge and your biggest accomplishment so far?

Stata: The last eight months haven't been business as usual in terms of my new role as CTO. With Blake and a lot of new talent coming on board at the executive level, we've spent a lot of time looking at the market, looking at our assets and strategizing.

When you do strategy, it's easy to get wrapped up in the grand and glorious three-year view. While we have a [long-term] view, we're also focused on how to connect that back to this quarter and next quarter so that we can advance user engagement. The number of users and top line [revenue] are critical focus points for the company in 2011, so that we can deliver against those important [goals] in the context of where we want to go as a company versus where we've been. The leadership team has not only articulated a strategy that makes a lot of sense for Yahoo but also thought really hard about how to execute against that strategy.

We're getting into a regular execution rhythm which is nice, and for me it's an opportunity to stick out my head and say, now that we have some direction, what is this CTO job? I've been operating more as a member of the leadership team than as CTO per se.

The biggest challenge for me is getting a bit out of the weeds. As chief architect, I was pretty deep down into the code of what we do around here. That's always been my approach: to dive in where there's a critical strategic issue that's stuck, survey what we're doing and unstick it.

That's a great thing for a chief architect to do but a CTO needs to provide a lot more visibility in terms of, what's the road map of the company, what's the technology direction and strategy. It needs to provide that, first and foremost, inside the company, because we have a lot of people who need to align to that, and also outside.

For the leadership team and myself, top-line growth broadly defined in terms of dollars and users and user engagement is a focus this year, but as CTO it's important for me to not hit the end of 2011 and not be on a ramp for the future. As CTO, I need to make sure we have a pipeline of technologies that mature at just the right time and to be looking one, two and three years ahead to make sure we're anticipating changes and building the right capabilities.

IDGNS: Yahoo has been criticized in recent years for lacking technology innovation and vision, and letting competitors capitalize on hot trends like social networking, video sharing and microblogging. Do you agree with that criticism?

Stata: There are important elements of truth in that criticism. As part of that strategic process that I mentioned earlier, that was a first-order question for us. But that criticism doesn't account for everything we've done and is therefore a bit unfair.

Something that's visible is what we've done in the advertising side. We saw [ad] exchanges and their many variances in terms of demand-side and supply-side platforms. We saw those trends early and made huge investments, including acquisitions of market-leading companies, which were integrated very well [into Yahoo]. We've done tremendous scientific and technology achievements that we've poured into that platform. I don't think we get recognition for being out ahead and for the innovation that we brought to that market.

Internally, we're on our second generation of cloud computing that is very innovative. One bit that we made external, Hadoop, has taken off and is fundamentally changing the large-data space as an industry.

On top of that cloud, we're building a platform for content ingestion, enrichment, relevance and personalization, that is second to none in the industry. We bought Associated Content so we can fuel that, in addition to having enormous content relationships ourselves and great original programming. On top of that platform, you'll see much more consumer-facing innovation coming in 2011.

Those are some things we've been doing that either people haven't seen because we haven't told them about it or maybe they haven't given us as much recognition as we deserve.

Having said that, when it comes to new product categories and deeply innovative features in existing product categories, Yahoo hasn't delivered and the first step in getting better is to acknowledge that. In strategy conversations late last year, we did acknowledge that, and we've put in place innovation programs inside the company to support the development of new product categories and of very innovative features.

I don't think we'll be turning out two "home runs" a year, if a "home run" is a Facebook, but you'll see us: a) putting out innovative stuff and b) fostering that over time, which is very important. A struggle companies face with innovative new product categories is that you get that early hit, and it's the coolest thing ever, but then you get to year two or year three and then it's not [as cool] anymore, yet you have to continue to invest in it. We recognize that as another pitfall to innovation and are prepared to create a structure that makes sure we see it through.