Qantas launches direct Dallas flights, Shares flat as US unemployment rises: Economy Roundup

Qantas has said it will cease all of its flights from Sydney to San Francisco after May 14, saying it will launch direct flights to Dallas instead to strengthen the ongoing relationship with American Airlines.

The company has said it will launch the flights from May 16, with four return flights from Dallas to be scheduled each week.

“Flying to Dallas/Fort Worth is an important step for Qantas as we expand and improve our international services,” Qantas chief executive officer Alan Joyce said in a statement.

A new codeshare arrangement will also see American Airlines team up with Qantas on over 50 destinations in North America. The company is seeking approval from the Australian Competition and Consumer Commission for the move.

“We have worked closely with American Airlines over many years, and with the commencement of services to Dallas/Fort Worth we look forward to taking our partnership to a new level,” Joyce said.

The Dallas hub is AA’s largest, and connects to a number of major cities including New York, Los Angeles and Chicago.

The announcement also comes as a report in The Australian predicts the company’s pre-tax full-year profit could fall 10% due to the A380 incident last year.

Sigma signals pricing will impact revenue

Sigma Pharmaceuticals has said that its revenue will be hit by changes in the government’s pricing of generic medications.

The company has said at its extraordinary general meeting that it has also gained a one-month extension on some of its debt facilities, which total about $750 million.

But chief executive Mark Hooper also said that the company’s Queensland operations are continuing, even though floodwaters have ravaged the state.

“The major problem has been road closures, impacting deliveries to our customers,” he said. “As an important partner to pharmacy, it is critical we do what we can to ensure ongoing supply.”

“We have been working closely with our logistics people to ensure we do what we can in this regard, including significant rerouting of road haulage.”

Chairman Brian Jamieson called on shareholders to approve the sale of the company to Aspen Pharmaceuticals.

“Your directors unanimously recommend you vote in favour of approving the sale, and intend to vote their own shares in favour of the resolution,” he said.

The sale would result in gross proceeds of $900 million and allow Sigma to “significantly reduce its outstanding debt position.”

Shares flat on weak Wall Street results

The Australian sharemarket has opened flat this morning following weak results in the United States where unemployment has reached a 10-week high.

The benchmark S&P/ASX200 index was down 4.9 points or 0.1% to 4790.3 at 12.15 AEST, while the Australian dollar maintained its ground at US99.5c.

ANZ shares gained 0.3% to $23.03, while Commonwealth Bank shares rose 0.2% to $51.24. Westpac rose 0.5% to $22.43 as AMP lost 0.8% to $5.15.

DuluxGroup closes manufacturing plant due to floods

DuluxGroup has said its main coatings manufacturing plant in Rocklea will be closed for two weeks due to flood damage.

“Subject to the outcome of this evaluation, our current expectation is that the site will remain out of production for at least two weeks with a progressive ramp up over subsequent months,” DuluxGroup said in a statement.

“We currently hold sufficient stock within the network to service our customers nationally (including Queensland) during the immediate period while we assess the impact of the floods on our Rocklea operations.”

Intel reveals solid fourth-quarter results

Chip manufacturer Intel recorded stronger-than-expected fourth quarter results overnight, with net profit gaining 48% in the previous year, sending shares up 2.4%.

Market optimism is being driven by the company’s new line of Sandy Bridge chips, which were featured heavily at last week’s Consumer Electronics Show.

“It seems to be getting widespread acceptance from the customers. Even with the consumer market being a little bit weak we expect it to ramp sales nicely in Q1,” chief financial officer Stacy Smith told Reuters.

Bernanke hopeful despite jobless data

Federal Reserve chairman Ben Bernanke has said that although jobless claims have hit a 10-week high, the Fed is still confident about the country’s economic recovery with GDP expected to be between 3-4% this year.

“That’s not going to reduce unemployment at the pace we’d like it to, but certainly it would be good to see the economy growing,” Bernanke said yesterday. “I think deflation risk has receded considerably and so we’re moving in the right direction.”

The number of Americans filing for first-time unemployment benefits rose to 445,000 from 410,000 in the prior week, a Labor Department report revealed.

The news sent to the Dow Jones Industrial Average down 23 points or 0.2% to 11,731.9.