Australian airlines Qantas to cut 5,000 jobs
Cost-cutting move will save ailing airline $2 billion, Australian
Australia's preeminent airline, Qantas - made famous by a series of TV advertisements that featured a koala bear who moaned, "I hate Qantas!" - has been in financial straits for some time now. The airline has now announced that it will be laying off 5,000 employees as part of a cost-cutting action.
Qantas Airline's shares sank by as much as seven percent at the start of trading in Australia after the earnings announcement was made, and closed down nine percent at $1.16.
The budget cuts were announced alongside an underlying pre-tax loss of $252 million for the six months to the end of December.
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Qantas also plans to reduce its fleet by more than 50 aircraft. Qantas chief executive Alan Joyce, saying the airline faced tough competition in both international and domestic operations, will be discussing the job cuts with trade unions on Friday.
The airline will also be making changes to its fleet.
Joyce said Qantas would defer eight remaining Airbus A380 aircraft on order, at a press conference following the earnings results. Qantas says it will also defer the receipt of three Boeing's 787 Dreamliner jets which had been ordered for its budget arm Jetstar.
Qantas has been facing "some of the toughest conditions... it has ever seen" and that it needed to take actions "unprecedented in scope and depth" to cope with changes in the Australian aviation industry, Joyce said in a statement.
In the meantime, Qantas has been trying to convince the Australian government that it deserves financial backing. They argue that rules limiting foreign ownership of the airline to 49 percent should be relaxed to encourage overseas investment.
Domestic rival, Virgin Australia Qantas says is largely owned by three government-backed operators; Air New Zealand, Etihad and Singapore Airlines.
"The Australian domestic market has been distorted by current Australian aviation policy," Joyce said.
"Qantas has been undertaking its biggest ever transformation over the past four years, cutting comparable unit costs by 19 percent, but this is not enough for the circumstances we face now."
The airline's shares sank by as much as seven percent at the start of trading in Australia after the earnings announcement was made, and closed down nine percent at $1.16.
The airline warned in December that losses in the first half could reach $300m million, citing "immense challenges" from record fuel costs, a strong Australian dollar and fierce competition.
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