Australian national airline Qantas on Wednesday announced slew of cost-cutting measures, including job reductions, retirement of older aircraft and a reduction in domestic and international flights. According to media reports, the airliner will adopt the measures in view of the impact of the recent natural disasters in Queensland, New Zealand and Japan on its earnings in the next financial year.
Qantas said it would "reduce management headcount", without disclosing the number of jobs to be axed. Qantas and low-cost flights subsidiary Jetstar will scale back the group's total growth in capacity in the domestic market in the second half from 14 per cent to 8 per cent, and international capacity from 10 per cent to 7 per cent.
Qantas will downsize its aircraft flying to Tokyo from Boeing 747 aircraft to Airbus A330s and suspend services between Perth and Tokyo from May 8, the report said, adding the airline will also retire two Boeing 767 aircraft earlier than it had anticipated.
Qantas Chief Executive Alan Joyce said he needed to act decisively to respond to the high jet fuel prices and natural disasters which had "come at great expense" to the company.
"We want to limit redundancies wherever possible. At this stage, only management positions will be made redundant," he said.
"The significant and sustained increases in the price of fuel is the most serious challenge Qantas has faced since the global financial crisis," he said.
Qantas has estimated the cost of Japan's earthquake and tsunami to its business at $45 million, the Christchurch quake at $15 million, the Queensland floods at $60 million and cyclones at $20 million.
Jet fuel prices in Singapore are hovering near $132 a barrel, slightly below an almost three-year high reached last week. Qantas has hedged 96 per cent of its fuel for the rest of this financial year at a worst-case crude oil price of $99.48 a barrel.
