Qantas to axe 1000 jobs as H1 loss looms
The next 12 months will see Qantas axe “at least” 1000 jobs, with the airline insisting such “urgent action” is required to safeguard its future as it forecast an underlying loss of between $250 million and $300 million for the last six months of this year.
Chief executive Alan Joyce blamed “fundamentally changed” market conditions for the drastic measures, pointing to a “marked deterioration” in trading conditions along with a tough exchange rate and high fuel costs.
“Our competitors in the international market, almost all owned or generously supported by their governments, have increased capacity to pursue Australian dollar profits, changing the shape of the market permanently,” he said.
“Since early 2012, there has also been an unprecedented distortion of the Australian domestic market, with Virgin Australia’s strategy to seek majority ownership and massive financial backing from foreign government-owned airlines.
“This foreign government capital has been used to finance dramatic increases in domestic capacity, with profound implications for the future of Australia’s aviation industry.”
In addition to the head count reduction of at least 1000 positions within 12 months, Joyce revealed a pay cut for himself and for the board, while the salaries of executives will be frozen with no bonus for the 2013/14 financial year.
The group will also review its spending with its top 100 suppliers, and will seek to optimise both its network and its fleet utilisation with further overhead reductions to be made.
Joyce also pledged to forge ahead with the turnaround of Qantas International as he branded the Australian international market as “the toughest anywhere in the world”.
“The uneven playing field in Australian aviation is being tilted further,” Joyce said.
“We cannot and we will not stand still in these extraordinary circumstances.”
With volatility expected to continue into the second half of the 2013/14 financial year, the Qantas Group declined to give a profit guidance for the period.
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