Qantas Airways makes cut backs

Qantas Airways makes cut backs

Australian flag-carrier Qantas Airways is to make a number of cutbacks on key routes to Japan and New Zealand as natural disasters in those countries take a toll on demand.

Aircraft will also be retired, while a number of management positions will also be culled.

The airline said its second-half profit would take a A$140 million hit from the cost of natural disasters, including flooding and Cyclone Yasi in Queensland and earthquakes in Japan and New Zealand.

That financial impact would come in addition to an expected $25m hole from the grounding of its A380 super-jumbo fleet following an engine explosion last November.

Chief executive Alan Joyce said he was reviewing the airline’s manpower costs with the aim of cutting management headcount and annual and long-service leave balances.

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“We want to limit redundancies wherever possible and will be using a range of initiatives to manage the reduction in capacity, including annual and long-service leave. At this stage only management positions will be made redundant,” Joyce said in a statement.

Qantas said it planned to cut domestic capacity growth in the second half of the current financial year to eight per cent from 14 per cent and international capacity growth to seven per cent from ten percent.

Jetstar, the airline’s low-cost subsidiary, will also suspend up to four weekly return services from Australia to Japan between April and August.

A Qantas departure between Perth and Tokyo will also go.

It will also reduce some services to New Zealand and retire early two Boeing 767 aircraft.