Qantas cuts 5,000 jobs, ends Perth-Singapore route

[Jman888]

Qantas to axe 5000 jobs

The West Australian

GEOFFREY THOMAS AVIATION EDITOR AND AAP The West Australian

February 27, 2014, 6:35 am

Qantas will shed 5000 jobs, cut routes and ground planes after posting a record statutory loss after tax of $235 million for the six months to December 31.

The airline says the job cuts are part of its bid to cut $2 billion in costs over three years.

It will cut capital expenditure by $1 billion over the next two financial years and is planning big changes to its fleet and network.

Underperforming routes, including its Perth to Singapore service, will be axed and timing and aircraft changes will be made to other routes.

Of the planned job cuts, Qantas says 1500 will come from management and non-operational roles.

The remainder of the losses will come as a result of changes to the fleet and network, the restructure of maintenance operations and the restructure of catering facilities.

Wages for all staff will be frozen, while chief executive Alan Joyce has already taken a 36 per cent pay cut.

The airline says more than 50 aircraft will be deferred or sold, with older planes like 747s to be retired early and orders of A380s and B787-8s to be delayed.

Qantas Group Chief Executive Alan Joyce said the result was unacceptable and required tough decisions.

"We must take actions that are unprecedented in scope and depth to strengthen the core of the Qantas Group business,” he said.

Jetstar Asia will suspend its expansion in Singapore.

Qantas shares fell four cents, or 2.8 per cent, to $1.23 at the start of trading today.

Mr Joyce said the airline continued to see major opportunities for its subsidiary Jetstar in Asia, despite challenging conditions and calls for it to exit the market.

However, he said Jetstar Asia would suspend its expansion in Singapore until conditions improved.

"Jetstar has been a pioneer Australian brand across Asia and we continue to see major opportunities for it in the world's fastest-growing aviation region."

Mr Joyce again hit out at rival Virgin, which counts three foreign airlines - Etihad, Singapore Airlines and Air New Zealand among its owners.

"The Australian domestic market has been distorted by current Australian aviation policy, which allows Virgin Australia to be majority-owned by three foreign government-backed airlines yet retain access to Australian bilateral flying rights,” he said.

"Late last year, these three foreign-airline shareholders invested more than $300 million in Virgin Australia.... that capital injection has supported continued domestic capacity growth by Virgin Australia despite its growing losses."

Qantas said it had a total liquidity of $3 billion, including $2.4 billion in cash reserves.

The airline is facing intense competition from overseas airlines and only commands 17 per cent of the inbound/outbound market to Australia.

Underperforming routes including Perth to Singapore are to be axed.

Its average staff cost is $92,000 compared to Singapore Airlines at $42,000.

On the domestic front its costs are estimated to be up to 17 per cent higher than Virgin Australia which now offers a business class product.

Since Virgin Australia launched its business class in 2011, premium class airfares have plummeted by 40 per cent.

From 2001 when Ansett collapsed until 2011 Qantas enjoyed a monopoly on domestic business class.

Earlier this month Qantas chief executive Alan Joyce warned in a speech in Canberra that the cuts would be greater than those achieved by American Airlines in 2012 of 17 per cent.

In a separate announcement today, Qantas said it had reached agreement with Brisbane Airport Corporation covering terminal and runway access at Brisbane Airport, which includes arrangements for the airline to dispose of its long-term lease on its terminal.

Qantas holds a 31-year lease, signed in 1987, on the northern end of the Domestic Terminal at Brisbane Airport which is due to expire on 30 December 2018.

Under the new arrangements, Qantas would retain exclusive use and operational control over much of the northern end of the terminal until the end of 2018 while securing rights to key infrastructure beyond this period.

In addition, BAC plans to make a significant investment in upgrading and improving facilities and services within the terminal, such as lounges and will assume control of the retail space of this part of the terminal.

Qantas will receive total cash proceeds of $112 million from BAC under the arrangements.

The arrangement also covers Qantas’ use of the runway system at Brisbane Airport, including current infrastructure and the new parallel runway, currently under construction.

Mr Joyce said the agreement was a win-win for both parties which would have significant benefits to Queensland.

“Brisbane Airport is one of the most important airports for Qantas today and increasingly so into the future. This investment is vital to the ongoing growth of aviation in Queensland which helps drive tourism and boost the economy,” Mr Joyce said.

 

 

 

[Thaiyotakamli]

Sh1t thinking to go perth by qantas this may, maybe end up take SQ (fork more $$$)

[Jman888]

Sh1t thinking to go perth by qantas this may, maybe end up take SQ (fork more $$$)

 

 

there are more budget airlines flying to Australia, hurting their business, but i still like to fly with SQ and QF.

[Thaiyotakamli]

 

 

there are more budget airlines flying to Australia, hurting their business, but i still like to fly with SQ and QF.

Unless its jetstar business i think i rather take economy of qantas.

[Scoots]

Sh1t thinking to go perth by qantas this may, maybe end up take SQ (fork more $$$)

FLY Scoot...pretty much like SQ just less all the food/drinks/Krisworld

[Jman888]

FLY Scoot...pretty much like SQ just less all the food/drinks/Krisworld

 

 

too many horror story about scoots missing flights

[Deckbuild]

Did I understand wrongly, cut back on maintenance operations????

[Kangadrool]

deleted.

 

 

too many horror story about scoots missing flights

 

use cable ties?

Did I understand wrongly, cut back on maintenance operations????

 

Edited February 28, 2014 by Kangadrool

[Deckbuild]

deleted.

 

use cable ties?

 

 

From what I understand is they already outsource their maintenance to India for their air craft, and now reduce maintenance, thats scary....

[Wyfitms]

deleted.

 

use cable ties?

 

 

employed saw as their director of operations ah

[Old-driver]

This management team is crap la... making $$ only when having monopoly.

 

Now blame aviation policies for their losses and expect their gahmen to bail them out

 

Why other airlines can expand and make $$ leh?

[Wyfitms]

This management team is crap la... making $$ only when having monopoly.

 

Now blame aviation policies for their losses and expect their gahmen to bail them out

 

Why other airlines can expand and make $$ leh?

 

you talking about qantas? for a moment i thought you were referring to some other companies...

[Thaiyotakamli]

Reason for Qantas expensive maintenance, they changed the parts to sports one

Edited February 28, 2014 by Thaiyotakamli

[Old-driver]

 

you talking about qantas? for a moment i thought you were referring to some other companies...

 

Yes yes... Quantas. the wounded Kangeroo

[Soya]

They shld juz put this 'roo down n out of its misery once n for all. Bad service attitude, not cheap, too many near misses, disgruntled staff......why fly w them when we hv so many other choices from changi?

[Toothiewabbit]

They shld juz put this 'roo down n out of its misery once n for all. Bad service attitude, not cheap, too many near misses, disgruntled staff......why fly w them when we hv so many other choices from changi?

charge higher fuel surcharges compared with other carriers somemore.

[Relagsingh]

They shld juz put this 'roo down n out of its misery once n for all. Bad service attitude, not cheap, too many near misses, disgruntled staff......why fly w them when we hv so many other choices from changi?

 

One of their pitfalls is their high no of staff along with their higher pay. Anyway, to add a bit more into their misery:

 

http://www.theaustralian.com.au/news/latest-news/qantas-planes-clip-wings-in-la/story-fn3dxiwe-1226841226647

[Razer_Blaze]

This management team is crap la... making $$ only when having monopoly.

 

Now blame aviation policies for their losses and expect their gahmen to bail them out

 

Why other airlines can expand and make $$ leh?

 

Tiger Airways is also having some trouble with their finances, in January 2014 Tiger reported a shocking SGD $118 million loss and

they are divesting their subsidiaries in Australia and Philipines.

 

And recently they have implemented weighing of hand carried luggages just before entering immigration at Changi T2. They will

charge a fee of about $30 for every KG exceeding the 10 KG limit. (e.g., 12 kg will be charged a fee of $60).