Qantas in Chaos!
- Massive pre-tax loss of $300 million…!!
- Thousands of jobs to go…!
- Share price in free fall!
Qantas plans to cut at least 1,000 jobs over the next year after reporting an expected pre-tax loss of up to $300 million in the first half of this financial year.
The airline’s chief executive Alan Joyce says sales have deteriorated during the past few months, as the same time as Qantas has been in a war of words over foreign ownership with its rival Virgin Australia.
“Our November figures have shown us that there continues to be deterioration in the revenue performance of the business and our competitor has just received $350 million, meaning they can continue their uncommercial behaviour,” he told a media teleconference after the announcement.
“We are putting all options on the table in a review of our structure.”
Mr Joyce says the cuts will include 300 jobs already being axed at its heavy maintenance facility near Geelong in Victoria
Qantas has flagged a pre-tax loss of between $245 million and $300 million in the six months to December 31.
It also expects to cut the salaries of Mr Joyce and the company’s board.
It will impose a pay freeze and ban bonuses for all other executives.
Mr Joyce says the airline will do “what ever we need to do to secure the Qantas Group’s future”.
“The challenges we now face are immense – but we will overcome them and we will continue to build a stronger and better Qantas for Australia,” he said.
“Since the Global Financial Crisis, Qantas has confronted a fiercely difficult operating environment – including the strong Australian dollar and record jet fuel costs, which have exacerbated Qantas’ high cost base.”
The company’s share price has plunged by 14.1 per cent after the announcement.
At 10:45am (AEDT) they were trading at $1.03.
Mr Joyce says Qantas is facing strong competition on domestic and international routes.
“Our competitors in the international market, almost all owned or generously supported by their governments, have increased capacity to pursue Australian dollar profits, changing the shape of the market permanently,” he said.