|Junk rated Australian carrier Qantas sheds 5,000 jobs, cuts flights, and clips Jetstar wings
Struggling Australian carrier Qantas said it will shed 5,000 jobs after a first-half net loss of A$235 million (US$210 million).
Following an interim profit warning in December, Moody's and S&P both downgraded Qantas' credit rating to “junk'' status, increasing the cost of financing for the carrier and restricting access for investors who do not put their money in lower-rated companies, AFP reports.
The carrier's underlying loss before tax in the six months to December 31, was A$252 million. Chief executive Alan Joyce called it ``unacceptable and unsustainable.’’
Joyce who will take a 36 percent wage cut.
In restructuring, the Qantas will cut 5,000 full-time positions from the 32,000 workforce by 2017. This includes 1,500 from management or non-operational roles. A wage freeze will be applied.
Qantas will also sell or defer delivery of 50 aircraft and retire some of its Boeing 767-300s and six oldest Boeing 747-400s. Delivery of the eight remaining A380s it has on order will be put off to an unspecified date.
Qantas said it will also cut its Perth to Singapore route and suspend new growth plans for its budget offshoot Jetstar in Asia.
“When it comes to Jetstar in Asia, we need to take the right decisions in accord with current market circumstances and our balance sheet,'' said Joyce.
“In Singapore, growth has been suspended by the Jetstar Asia board until such time as conditions improve.''