Qantas set to axe flights and managers
The Age
Thursday March 31, 2011
QANTAS has sought to reassure investors that it is doing its utmost to combat high jet fuel prices after revealing plans to axe managers, retire aircraft and cut domestic and international flights.Facing its "severest crisis" since the global financial downturn in 2008, Qantas has warned that the natural disasters in Japan, New Zealand and Queensland will cost it $140 million in the second half. The grounding of its A380 superjumbo fleet late last year will also strip another $25 million from earnings in the half.However, it is still sticking to its previous guidance that pre-tax profit for this financial year will be "materially stronger" than last year's, when it posted $377 million in underlying earnings."There is a bit of relief that they haven't felt the need to change guidance," a CBA Equities analyst, Matt Crowe said. "They are trying to get the message across that they are not standing flat-footed."The airline also indicated yesterday that the natural disasters would drag down its earnings next financial year, but said that it was too early to put a definitive figure on the impact.Qantas chief executive Alan Joyce said its premium international operations were continuing to lose money, but the domestic operations of both Qantas and Jetstar remained profitable.Jetstar will suspend up to four return flights a week between Australia and Japan because of the impact on demand of the natural disaster. As well, Jetstar will reduce services to earthquake-hit Christchurch.Qantas will also suspend services between Perth and Tokyo from May 8, and downsize its aircraft flying to Tokyo from Boeing 747 jumbos to Airbus A330s.In further attempts to offset the high fuel prices, Qantas plans to lay off an undisclosed number of managers and reduce its 35,000-strong workforce's annual and long-service leave balances. The airline laid off about 500 managers two years ago.Mr Joyce said he needed to act decisively to respond to the high jet fuel prices and natural disasters, which had "come at great expense" to the company."We want to limit redundancies wherever possible. At this stage only management positions will be made redundant," he said.The airline will also retire two Boeing 767 aircraft earlier than planned.
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