Hard blow for the goose that lays the golden eggs of air transport. Qantas, the Australian company that has long been a model for all carriers, has announced the cut of a thousand jobs, explaining that the company is at a crucial point. The situation has worsened "significantly" and the company is facing "extraordinary circumstances", such as the record cost of fuel, unfavorable exchange rates and fierce competition from foreign carriers benefiting from state support.
Qantas shares fell 17% to 99,5 Australian cents after the announcement. “The challenges we face are immense – said Alan Joyce, CEO of the airline – Following the global crisis, Qantas has had to deal with a difficult economic situation, with the strong Australian dollar and record fuel prices. All factors that have increased costs, which are already high in themselves. The Australian international market is the most difficult in the world”.
The group forecasts a loss of between 250 and 300 million Australian dollars (380 – 450 million euros) in the period July-December 2013. Passengers dropped significantly in November and market share fell due to stiff competition.
Fuel costs are expected to be AUD 2,27 billion (€3,42 billion) in the first half, AUD 88 million (€133 million) higher than in the same period last year.
According to CEO Joyce, "urgent" measures are needed. Measures that include the cutting of "at least 1000 jobs", a slimming cure for the salaries of executives, a general freeze on salaries and bonuses and a review of expenditure items with the main suppliers.
Last month, Qantas backed a proposed change to strict rules that limit foreign investment in the company to 35%. For the carrier, these regulations have hurt its growth, while rival Virgin has benefited from the rescue of foreign investors.
