18 February 2009

Economic downturn means route shake-up for Qantas

The Qantas Group has unveiled changes to its New Zealand, China and India operations in light of the economic downturn.

In New Zealand, from June 10, Qantas will cease operating its New Zealand domestic network, which will be replaced by Jetstar.

Qantas will introduce changes to its trans-Tasman services and flights to the US from Auckland, increasing frequency and improving connections for international customers, including to New York.

In China, Qantas Sydney-Shanghai A330 services will increase to seven per week (daily) from March 31.

From the same date, Melbourne-Shanghai services (currently two per week) will cease, and from April 17 the airline will stop flying from Sydney-Beijing services (currently three per week).

In India, Qantas three-times-a-week Mumbai services will operate via Singapore from mid-May, with connections from Sydney, Melbourne, Brisbane, Perth and Adelaide (Qantas) and Cairns and Darwin (Jetstar).

Group CEO Alan Joyce said Qantas had been closely monitoring its international operations since the global economic situation deteriorated in late 2008.

"Airlines around the world are confronting significantly changed operating conditions and have to ensure capacity is best matched to demand," he said.

"The Qantas Group is performing well in this difficult environment, but we are not immune from the need to address under-performing routes.

"We are reluctantly making changes to our China and India schedules, but will continue to offer significant capacity into both countries as they remain important business and leisure markets.

"New Zealand is a key market for the Qantas Group, and we are a large employer there. These changes will consolidate our presence in New Zealand, and follow our recent move to expand our Auckland Telephone Sales call centre to service customers from the UK, South Africa and US.

"Our proven two-brand model, with Qantas and Jetstar, enables the Qantas Group to respond to market challenges and opportunities more flexibly than competitors.

"The dynamics of the New Zealand domestic and trans-Tasman markets, however, are unique and particularly in the current environment, we need to be flexible to ensure we remain competitive.

"This means applying our two brand strategy and utilising the right airline, with the right cost base and product, for the right market, to offer competitive, sustainable services."

He said the moves will have an impact on Qantas jobs in Christchurch and, to a lesser extent, Wellington, but there will be some opportunities for Qantas and Jetconnect employees to take up positions with Jetstar.

'For those who do not, we will offer appropriate separation packages and support," he added.

By Bev Fearis