Australian airline Qantas has said it will be forced to cut 5,000 jobs as it seeks to turn its fortunes around.
The struggling carrier reported an underlying pre-tax loss of A$252m for the six months to the end of December.
Qantas plans to reduce costs by A$2bn over the next three years, with 50 aircraft also to be cut from its fleet.
The airline has faced stiff competition from both domestic and international carriers, while also battling record fuel bills.
Qantas chief executive Alan Joyce explained “We are facing some of the toughest conditions Qantas has ever seen.
“Australia has been hit by a giant wave of international airline capacity, with a 46 per cent increase in competitor capacity since 2009 more than double the global increase of 21 per cent over the same period.
“The Australian domestic market has been distorted by current Australian aviation policy, which allows Virgin Australia to be majority-owned by three foreign government backed airlines and yet retain access to Australian bilateral flying rights.
“Late last year, these three foreign-airline shareholders invested more than $300 million in Virgin Australia at a time when, as Virgin Australia reported to the ASX on February 6th, it was losing money.
“That capital injection has supported continued domestic capacity growth by Virgin Australia despite its growing losses.
Last year Air New Zealand, Etihad and Singapore Airlines all invested in rival Virgin Australia, whole present legislation means no foreign party can own more than 49 per cent of Qantas.
Qantas said it would defer eight remaining Airbus A380 aircraft on order.
It will also defer the receipt of three Boeing’s 787 Dreamliner jets which had been ordered for its budget arm Jetstar.