Qantas cuts 5000 jobs, posts $252 million first half loss

[flee 5]

 

Qantas will axe 5000 jobs, ditch unprofitable routes and retire ageing gas-guzzling planes in the biggest shake up of its operations since it was floated almost two decades ago.

It is the biggest cull of Qantas' staff since chief executive Alan Joyce took the reins in 2008, and will reduce the airline's workforce to about 27,000 over the next three years.

Before the latest retrenchments, Mr Joyce had announced almost 4200 job cuts during his tenure.

The airline also reported a $252 million underlying loss in the first half amid a bitter fight with Virgin Australia in the domestic market, and intense competition on international routes. It is Qantas' biggest first-half loss since the Keating government began cutting it free from government ownership in 1995.

The job cuts from Qantas's 33,000-strong workforce will be across the board. They include reducing management and back office staffing levels by about 1500. It will also wind back its aircraft maintenance operations and catering.

Qantas will also ditch flying between Perth and Singapore later this year and retire six Boeing 747 jumbos. It has also deferred the delivery of the last eight A380 super jumbos it has on order, as well as the last three of 14 new 787 Dreamliners due for Jetstar.

It will also shelve growth plans for Singaporean budget offshoot Jetstar Asia amid intense competition with other budget airlines in the region.

Qantas shares fell sharply Thursday, down about 6.5 per cent at $1.1875.

Read more: http://www.smh.com.au/business/aviation/qantas-cuts-5000-jobs-posts-252-million-first-half-loss-20140226-33i4c.html

 

[Johan Z 0]

Meanwhile, across Tasman Sea Air NZ profits flying high.

[leon t 0]

Qantas is like MH as is very strongly govt-supported and is now battling against competition esp from virgin aust in the domestic side.

[flee 5]

Yes, like MH, Qantas not only has to fight the competition, it also needs to fight its own unions....

[Jeffery Lim 0]

The only difference is that Qantas dares to take action and make it happen

[JuliusWong 0]

The only difference is that Qantas dares to take action and make it happen

...by grounding the whole airline.......lolx

[flee 5]

Qantas responds to deterioration: cuts 5,000 jobs & 50 aircraft – but changes are overdue.

 

Over 50 aircraft to be cancelled or deferred – but many already announced

Qantas has also announced plans to cancel or defer over 50 aircraft, but many of these have already been announced. They are as follows:

• Qantas Domestic will increase utilisation of narrow-body aircraft, allowing Airbus A330 aircraft in the domestic market to concentrate solely on East-West services and peak services on the Sydney-Melbourne-Brisbane triangle.
• A330-200s will be freed up to enter the Qantas International fleet as replacement aircraft, helping to accelerate the retirement of older Boeing 747 aircraft.
• All six of Qantas International’s non-reconfigured B747s will be retired ahead of schedule, by the second half of FY16. Nine reconfigured B747s with A380-standard interiors will remain.
• Qantas’ final two B737-400s have been retired this month and all B767s will be retired by the third quarter of FY15, resulting in cost and passenger benefits from fleet simplification.
• Qantas International’s eight remaining A380 orders will be deferred, with an ongoing review of delivery dates to meet potential future requirements. Schedule changes will allow maximum use of Qantas’ current 12 A380s.
• The final three of 14 Jetstar B787-8s on firm order will be deferred.
• Jetstar’s A320 order book has been restructured.

Qantas says this reduces its capital expenditure by AUD1 billion, leaving it with only AUD800 million. Reduction in Jetstar long-haul aircraft is unsurprising as Jetstar was already planning to replace A330s with a fewer amount of 787s, and Jetstar's long-haul markets have increasingly become competitive with more capacity gains to be made, mainly by AirAsia X.

 

Full analysis: http://centreforaviation.com/analysis/qantas-responds-to-deterioration-cuts-5000-jobs--50-aircraft--but-changes-are-over-due-154979

[JuliusWong 0]

 

Time to do another one of this...then restart again......

[JuliusWong 0]

Sorry for the link.

 

Quotes from another website for Qantas's downfall:

 

"Ultimately, a failure to address changing market conditions sooner, both longhaul under the Strong-Dixon era and domestic more recently.

Big changes should have been made a decade ago when the entire industry was going through a painful adjustment process, and now the problems - especially high legacy costs - have compounded in a resurgent market place against lower cost competitors both at home and abroad.

The current financial situation at Qantas is not unique in the current circumstances in this part of the world. Virgin Australia reports results tomorrow that will also show a loss. AirAsiaX reported results yesterday that showed a loss, Tigerair Group is losing money but has too many A320's on order so is dumping capacity into Singapore while cutting back in Indonesia to reduce losses there. Malaysian Airlines has reported increased losses while Singapore Airlines has had a significant fall in its profits as well.

The bottom line is that currently, as a region, there is simply too much unprofitable capacity flying around in Southeast Asia and between Southeast Asia and Australia. International capacity between Australia and Southeast Asia was the fastest growing in the world last year led by significant increases in services from MH and AirAsiaX after the Australia-Malaysia treaty was relaxed. So that's the headwind in Qantas International.

However, the primary 4 problems with QF right now are:

1. Too much domestic capacity. They need to pull back and the indications from today are that they will. (Too bad it had to take this loss to make them do so)

2. Not enough top line revenue. The revenue decline is worrying and QF needs to address this.

3. Declining yield. Increased competitive pressure has forced yields down across the group. They need to re-build these especially domestically because this is the group engine that pays the bills.

4. Jetstar International. The decline in Jetstar International is worrying and needs to be addressed pronto. Jetstar International should be a growth engine for the group not in decline already!

There are cost pressures and all of that as well but at the end of the day cost cutting drives, redundancies, outsourcing and all of that is fluff. They need more cash coming in the door AND they need more cash that is higher margin coming in the door. That is the challenge! "

[flee 5]

Funny that they mentioned Australia-Malaysia agreement when Qantas does not fly between the two countries. Only its JetStar Asia LCC serves Malaysia from Singapore.

Edited February 27, 2014 by flee

[Kee Hooi Yen 0]

I believe JQ will face even tougher competition when Air Asia X Thai & Indonesia starts operations into Australia

[Johan Z 0]

Jetstar fares are not really cheap compared to Virgin for example and Virgin has slightly better product domestically.

[JuliusWong 0]

I believe JQ will face even tougher competition when Air Asia X Thai & Indonesia starts operations into Australia

Unless Australia comes up with a new air agreement to cap the number of flight that airlines based in both Thailand and Indonesia can fly into Australian cities. Indonesia AirAsia X will be based in Surabaya...definitely a hit with the local Aussie. Tiger and Jetstar, using A320 only, might bleed though. Time will tell.

[Mohd Azizul Ramli 2]

IAAX will be based in Denpasar.

[zeqa 1]

First its car industry (Ford of Australia, Toyota and Holden pulling out of Oz) & now this?

[zamim 0]

There is a similarity between MAS and QANTAS, both lost money, both blamed the other home based competitor and both have AJ as their CEOs, Allan Jones and Ahmad Jauhari respectively

[flee 5]

QF CEO's name is Alan Joyce.

But there is one major difference - MH dare not cut jobs but QF is shedding 5,000 as well as retiring aircraft.

[Mike P 0]

QF CEO's name is Alan Joyce.

But there is one major difference - MH dare not cut jobs but QF is shedding 5,000 as well as retiring aircraft.

 

GLC can't do that.

[alberttky 0]

GLC can't do that.

Malaysian GLC can't do that, but Singapore can, and it did.

[Mike P 0]

Malaysian GLC can't do that, but Singapore can, and it did.

 

I think MH actually did once, but they did not literally sack the employees, just transfer them to other other jobs. More like babysitting that kind, ensuring those people were secured with a job before terminating their employment with MH.

[Waiping 12]

 

I think MH actually did once, but they did not literally sack the employees, just transfer them to other other jobs. More like babysitting that kind, ensuring those people were secured with a job before terminating their employment with MH.

 

VSS - Voluntary separation scheme.

[Mike P 0]

 

VSS - Voluntary separation scheme.

 

That has been done too. I'm not sure how MH works, but for TM, yes, mostly for the Top Mgmt. Last year, TM did it for some GMs and VPs.

[Cheng Long 0]

Anedoctally, Qantas flies a whole lot more business travellers than MH, this supposes to be where the bulk of the money comes from.. Yet, if they still can't generate a profit, something is very wrong..

[JuliusWong 0]

Anedoctally, Qantas flies a whole lot more business travellers than MH, this supposes to be where the bulk of the money comes from.. Yet, if they still can't generate a profit, something is very wrong..

They are hit left, right and center by Virgin Australia. Not forgetting, the moment EK-QF alliance was announced, QF is effectively 'out' of oneworld. EK is 'draining' away int'l pax for QF. If AIr New Zealand can make their int'l operation profitable, we don't see how QF cannot. Bear in mind that NZ has much smaller population and J-segment market. AJ also stripped QF to benefit Jetstar.......

 

Now BA and CX are ignoring QF's plea. Who ask QF to be promiscuous??! tsk tsk tsk.....

[Mike P 0]

It was like 2 or 3 years ago, QF was the most profitable airlines in the world.. and now... http://www.actu.org.au/Media/Mediareleases/StrongQantasresultsshowAustraliastillhometoworldsmostprofitableairline.aspx