Qantas: 5000 jobs to go, along with routes and planes
Qantas will axe 5000 jobs, dump unprofitable routes, freeze wages, defer aircraft orders and retire ageing planes in a huge upheaval of its operations designed to reduce costs by $2 billion.
The job cuts from Qantas’s 33,000-strong workforce will be across the board, although 1500 of them will be in management and non-operational roles.
CEO Alan Joyce said Qantas needed to “take actions that are unprecedented in scope and depth to strengthen the core of the business".
He said there were many examples of Australian companies which had failed “because there were not prepared to make hard decisions”.
“Qantas is not one of them,” he added.
Qantas declared a statutory loss of $235 million for the six months to December, compared with a $109 million profit in the same period a year earlier. Revenue fell four per cent to $7.9 billion.
Qantas’ domestic operations reported a 74% fall in pre-tax profit to $57 million, which was blamed on intense competition in the domestic market and growth in capacity.
But it was overshadowed by Qantas’ international operations, which slumped to a $262 million loss from a $91 million loss previously.
Jetstar made a $16 million loss from a $128 million profit previously, reflecting ”the impact of domestic competitive pressures” as well as $29 million in start-up losses from its associate airlines in Asia. They include Jetstar branded airlines in Japan, Vietnam and Singapore.
Defending his role and the job cuts, Joyce said he was "absolutely committed" to Qantas
"Obviously the circumstances that Qantas faces today are very difficult. But we have a plan to fix the problem,” he said.
Other key points of the recovery strategy:
Qantas has suspended growth at Jetstar Asia in Singapore amid intense competition from other budget airlines in the region.
Qantas will ditch flying between Perth and Singapore later this year and retire six Boeing 747 jumbos.
Agreement has been reached to sell Qantas’ long-term lease on its terminal at Brisbane Airport for $112 million. The lease was due to expire in 2018.
More than 50 aircraft will be deferred (including A380s and B787-8s) or sold.
Qantas will retime A380 flights between Melbourne and London in November to reduce the amount of the time the planes stay on the ground at London’s Heathrow Airport.
All Qantas Boeing 767s will be retired by the first quarter of 2014-15.
Ian Jarrett
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