1,750 jobs in jeopardy as Qantas profits dive

Apr 15 2009 by Iain Laing, The Journal

QANTAS Airways has slashed its annual profits forecast and said it planned to cut 500 management positions as it battles weak passenger demand.

The Australian national carrier dropped its full year pre-tax profit outlook to £49m to £98m, down from its previous forecast of £245m.

Cost-cutting measures include a 5% cut in flying capacity, the grounding of 10 aircraft, the deferral of orders on four Airbus A380s and reduction in capital expenditure of at least £394m in 2009-10.

Chief executive Alan Joyce said Qantas would remove 500 management posts and that “up to 1,250 equivalent full-time positions” were also under threat.

He said: “Market conditions have deteriorated, especially in our international business. We have no choice but to lower our profit forecast and make major changes to ensure Qantas can weather the current commercial environment.”

Its shares fell 9% on the Australian stock market after the announcement. The Australian company said last February that its net profit had fallen 66% in the second half of 2008 as it paid high fuel costs and the economic downturn sent premium passenger numbers tumbling.

Mr Joyce said: “Qantas expects the current volatility in operating conditions to continue for some time.”

But he stressed the company was determined to see the brand remain strong in the long term.