Wednesday, April 16, 2014   

Troubled Australian carrier Qantas sheds 1,000 jobs, faced with more losses
(12-05 08:54)

Troubled, loss-making Australian carrier Qantas announced the axing of 1,000 jobs and said it faced “immense'' challenges in a shock profit downgrade, flagging a half-year loss of up to A$300 million (US$271 million).
Chief executive Alan Joyce said conditions had seen a “marked'' deterioration and the airline was battling "extraordinary circumstances'' including record fuel costs, a strong Australian dollar and competition from rivals, AFP reports.
Qantas shares plummeted 17.26 percent to 99.5 Australian cents on the news, which comes just months after the carrier returned to a modest A$5 million annual profit in August following a strategic tie-up with Emirates.
“The challenges we now face are immense,'' Joyce said in an update to the Australian stock exchange.
“Since the global financial crisis, Qantas has confronted a fiercely difficult operating environment -- including the strong Australian dollar and record jet fuel costs, which have exacerbated Qantas' high cost base,'' he added.
“The Australian international market is the toughest anywhere in the world.''
Joyce said Qantas expected to report a loss before tax in the six months to December 31 of A$250-A$300 million. Passenger loads slipped significantly in November as increased competition drove down the Australian carrier's market share.
Fuel costs for the half-year were A$2.27 billion – A$88 million higher than in the second half of 2012.
“Urgent'' action was needed to salvage the Flying Kangaroo's profitability, Joyce said, including the sacking of “at least 1,000'' staff, a cut to his own pay and that of the Qantas board, a review of spending with top suppliers and a salary and bonus freeze.
“We have reduced the group's unit costs, excluding fuel, by a total of 19 percent since FY09, including by five percent in FY13. But these actions are not enough to deal with the current situation,'' he said.

   
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