Regional Round-Up
Qantas’ $2 billion salvage exercise
March 1st 2014
Qantas Group CEO, Alan Joyce, announced 5,000 job losses, a group-wide pay freeze, major fleet deferrals and retirements, a network cutback, a cap on Jetstar Asia expansion, the closure of selected MRO and catering units and the sale of its long-term terminal lease at Brisbane Airport, to stem the carrier’s rising flood of red ink. Read More »
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Joyce, who is facing calls for his resignation from union leaders and pro-labour politicians, said the group’s underlying interim loss of A$252 million (US$211million) to December 31, 2013 meant the airline had to take action that is unprecedented in scope to strengthen the core of the business. “We have already made tough decisions and nobody should doubt there are more ahead,” he said in Sydney where he announced the airline group’s biggest first half loss since the carrier privatized under the leadership of Labour prime minister, Paul Keating.
The dismal results statement included a 4% decline in revenue, to A$7.9 billion, a A$16 million collapse into loss at Jetstar, compared with a A$128 million profit in fiscal 2012. The Jetstar losses included its subsidiaries in Japan, Singapore and Vietnam.
The battle to retain its 65% line in the sand capacity strategy against spunky and glamorous rival, Virgin Australia, saw domestic revenue decline by 74% to a pre-tax low of A$57 million. On its international routes, the A$91 million loss for fiscal year 2012 ballooned in the latest financial year.
Joyce said: “To reach A$2 billion in cost cuts over three years, we have to work our assets harder, become more productive, retire older aircraft and make sure our fleet and network are the right size. We must defer growth and cut back where we can, so we can invest where we need to.”
