Qantas Group outlines restructuring plans

Qantas Group outlines restructuring plans

The Qantas Group has announced a restructure of the Qantas Airlines business and changes to its executive team as it enters the next phase of the five-year transformation plan launched in August 2011.

After being restructured over the coming months, Qantas International and Qantas Domestic – currently combined as ‘Qantas Airlines’ – will be formally managed as two distinct businesses.

Each will have its own chief executive and its own operational and commercial functions.

Their financial results will also be reported separately.

The new structure will be effective from July 1st 2012.

This change will enable a greater focus on the priorities of turning around the Qantas International business and enhancing the strong Qantas Domestic business, as part of the overall Group strategy.

Jetstar Group chief executive Bruce Buchanan, having successfully built Jetstar into the leading low fares carrier across Asia, will leave the group.

Buchanan will remain with Jetstar for the next six months to assist with the transition.

He will then provide consultancy services to the Group for an additional 18 months.

As a consequence of the revised structure, Rob Gurney, group executive commercial and freight, Qantas Airlines, has decided that it is appropriate to leave the Group.

Joyce said the restructure would strengthen the Qantas Group’s portfolio and help deliver its strategic goals.

“Over the past 18 months we have established a clear path to building a better, more competitive Qantas,” he said.

“Our foundations are strong, with the two most profitable airlines in the domestic market, one of the world’s best loyalty programs and Jetstar targeting the fast-growing Asian leisure travel market.

“We have begun the process of restoring Qantas International to a sustainable position. Yesterday we announced that we will consolidate our heavy maintenance operations in Australia to maximise the benefits of our next-generation fleet of aircraft.

“And other initiatives are underway across the Group to increase efficiency and productivity.

“The restructure I announce today advances this essential program of change. It recognises that the Qantas Group is a true portfolio business.

“Qantas Domestic and Qantas International face very different situations. Qantas Domestic is strong and profitable.

“We are seeing the most sustained levels of high customer satisfaction on domestic services since 2004, and we are the airline of choice for corporate Australia.

“But we cannot be complacent – we must continue to offer customers the best network, frequency and flying experience in the domestic market, and find new ways to earn and reward their loyalty.

“Qantas International, a great airline with a rich history, is loss-making and does not deliver sustainable returns.

“However, we are committed to turning it around through the five-year strategy we announced last year, based on flying to global gateways, deeper alliances, smart investment in product and disciplined capital management.

“Formally separating the management of Qantas International and Qantas Domestic will ensure that we can independently run each business according to its specific priorities and market conditions.

“These measures give us the right structure to address the challenges and opportunities we face – and the right people.”