ID :
171900
Wed, 03/30/2011 - 13:32
Auther :
Shortlink :
http://m.oananews.org//node/171900
The shortlink copeid
Qantas to cut jobs, capacity and fleet
(AAP) - Qantas Airways Ltd says the natural disasters in Queensland, New Zealand and Japan will result in a $140 million hit to the bottom line for the second half of 2010/11.
The "significant" financial cost of the floods, earthquakes and tsunami come on top of soaring jet fuel prices and the previously announced impact of Qantas's A380s being grounded last year following an engine explosion.
In response, Qantas chief executive Alan Joyce on Wednesday announced the latest round of cost-cutting measures, including job losses, in an attempt to "ensure the ongoing sustainability of our business".
"There has never been a time when the world faced so many natural disasters, all of which have come at a significant financial cost to the Qantas Group," Mr Joyce said in a statement.
"The significant and sustained increases in the price of fuel is the most serious challenge Qantas has faced since the global financial crisis."
In an update on the impact of the natural disasters both at home an abroad, Qantas said the Japan earthquake and tsunami would cost the airline $45 million, with the Christchurch earthquake to result in a $15 million hit.
The airline also updated the impact of the floods and Cyclones Yasi and Carlos in Queensland, which would now be $60 million and $20 million, respectively.
At the half-year results in February, Qantas said the impact of the floods would be $55 million, while Yasi was expected to have a $15 million impact.
Mr Joyce said it was too early to determine how these events would affect Qantas's financial results for 2011/12.
Meanwhile, Qantas spokesman Luke Enright said earnings guidance delivered in February for 2010/11 full year underlying profit before tax to be "materially stronger" than the prior year was unchanged.
Measures unveiled on Wednesday included scaling back anticipated capacity growth during the second half of 2010/11 at both Qantas's mainline operations and low-cost offshoot Jetstar.
Domestic capacity was now expected to grow eight per cent in the second half of 2010/11, down from 14 per cent previously forecast, while the number of international seats would increase seven per cent, down from 10 per cent.
To that end, Qantas said it would suspend some flights between Australia and Japan, use smaller aircraft on certain routes and reduce frequencies on services to New Zealand.
Qantas said it would also retire two Boeing 767 aircraft one and three years earlier than previously planned.
There would also be job losses.
Mr Joyce said these would come from management ranks "at this stage".
"We want to limit redundancies wherever possible and will be using a range of initiatives to manage the reduction in capacity including annual and long service leave," Mr Joyce said.
Mr Enright said it was not yet known how many management positions would go.
"We are doing the review and that will happen over the next few weeks," Mr Enright said.
Qantas had already lifted fuel surcharges and hiked airfares twice in the past couple of months.
Jetstar has also increased ticket prices and charges for items such as checked baggage.
Qantas said its fuel bill for the second half of 2010/11 would be $2 billion.
The Centre for Asia Pacific Aviation said the Qantas announcement was "reminiscent of the dark days of the global financial crisis".
"The bumpy ride for shareholders continues," the centre said in a research note dated March 30.
Qantas shares closed up four cents at $2.19.
Mr Joyce said the airline group's diversity provided flexibility in being able to manage the volatility in the market.
"Our portfolio of businesses - Qantas Airlines, Jetstar, QantasLink, Qantas Frequent Flyer and Qantas Freight - allows us to succeed no matter what challenges we face, from economic cycles to fuel price rises and natural disasters," Mr Joyce said.
The "significant" financial cost of the floods, earthquakes and tsunami come on top of soaring jet fuel prices and the previously announced impact of Qantas's A380s being grounded last year following an engine explosion.
In response, Qantas chief executive Alan Joyce on Wednesday announced the latest round of cost-cutting measures, including job losses, in an attempt to "ensure the ongoing sustainability of our business".
"There has never been a time when the world faced so many natural disasters, all of which have come at a significant financial cost to the Qantas Group," Mr Joyce said in a statement.
"The significant and sustained increases in the price of fuel is the most serious challenge Qantas has faced since the global financial crisis."
In an update on the impact of the natural disasters both at home an abroad, Qantas said the Japan earthquake and tsunami would cost the airline $45 million, with the Christchurch earthquake to result in a $15 million hit.
The airline also updated the impact of the floods and Cyclones Yasi and Carlos in Queensland, which would now be $60 million and $20 million, respectively.
At the half-year results in February, Qantas said the impact of the floods would be $55 million, while Yasi was expected to have a $15 million impact.
Mr Joyce said it was too early to determine how these events would affect Qantas's financial results for 2011/12.
Meanwhile, Qantas spokesman Luke Enright said earnings guidance delivered in February for 2010/11 full year underlying profit before tax to be "materially stronger" than the prior year was unchanged.
Measures unveiled on Wednesday included scaling back anticipated capacity growth during the second half of 2010/11 at both Qantas's mainline operations and low-cost offshoot Jetstar.
Domestic capacity was now expected to grow eight per cent in the second half of 2010/11, down from 14 per cent previously forecast, while the number of international seats would increase seven per cent, down from 10 per cent.
To that end, Qantas said it would suspend some flights between Australia and Japan, use smaller aircraft on certain routes and reduce frequencies on services to New Zealand.
Qantas said it would also retire two Boeing 767 aircraft one and three years earlier than previously planned.
There would also be job losses.
Mr Joyce said these would come from management ranks "at this stage".
"We want to limit redundancies wherever possible and will be using a range of initiatives to manage the reduction in capacity including annual and long service leave," Mr Joyce said.
Mr Enright said it was not yet known how many management positions would go.
"We are doing the review and that will happen over the next few weeks," Mr Enright said.
Qantas had already lifted fuel surcharges and hiked airfares twice in the past couple of months.
Jetstar has also increased ticket prices and charges for items such as checked baggage.
Qantas said its fuel bill for the second half of 2010/11 would be $2 billion.
The Centre for Asia Pacific Aviation said the Qantas announcement was "reminiscent of the dark days of the global financial crisis".
"The bumpy ride for shareholders continues," the centre said in a research note dated March 30.
Qantas shares closed up four cents at $2.19.
Mr Joyce said the airline group's diversity provided flexibility in being able to manage the volatility in the market.
"Our portfolio of businesses - Qantas Airlines, Jetstar, QantasLink, Qantas Frequent Flyer and Qantas Freight - allows us to succeed no matter what challenges we face, from economic cycles to fuel price rises and natural disasters," Mr Joyce said.
