Qantas cuts jobs and dumps international routes
Qantas is cutting 500 jobs, closing two international routes and reducing capacity on some domestic routes.
It follows the airline’s profits being hit by an industrial dispute and rising fuel costs.
Most of the job losses will be focused on the group’s engineering and maintenance division, as new aircraft arriving in the fleet require less maintenance than older aircraft being retired.
Qantas today reported an 83% fall in net profit to $42 million for the six months to the end of December, blaming a $194 million cost from industrial action and the grounding of its fleet, and a $444 million increase in fuel prices.
Qantas will withdraw from the loss-making Sydney-Mumbai and Auckland-Los Angeles routes, and reduce capacity on a range of routes including Sydney-Bangkok, Sydney-Perth and Melbourne-Perth by using smaller aircraft.
The latest route cuts are in addition to its previous announcement to withdraw from the Hong Kong-London and Bangkok-London routes from next month.
While the impact of the dispute was severe, our portfolio of businesses once again demonstrated its resilience in difficult conditions," said Qantas CEO Alan Joyce said.
While Qantas has been doing well on the domestic routes, its international operations continue to be a problem amid slowing demand and increased competition.
Joyce said that "even the strengths of the rest of our business will not be able to compensate for this issue over the long term".
Following the industrial dispute last year, see previous story, the airline has reached a deal with its main engineers union after it agreed to a 3% annual increase in salaries for three years.
Joyce said the latest job cuts are not jobs were not being outsourced, but had "become structurally redundant".
"Let me clarify that there will be no jobs going offshore," he added.
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