Qantas has been forced to suspend
flights on several routes and cut staff to protect profits after a string of
natural disasters in the past three months.
The national carrier has lost an
estimated $144 million in revenue as a result of flooding and cyclones in
Australia’s Queensland state, an earthquake in Christchurch, New Zealand and
the massive earthquake and tsunami which struck Japan.
Alan Joyce, chief executive of
Qantas, said there had “never been a time when the world faced so many
Meanwhile, a surge of almost 50 per
cent in the price of fuel since September has left the airline under
significant financial pressure with second-half fuel costs estimated at $2.1
Qantas has also predicted that its
second-half profits will be down $26 million due to the forced grounding of its
flagship A380 fleet following an explosion in one of its super jumbo’s engines
over Singapore in November.
In an attempt to cope with the
effects of the disasters on revenue, and the increase in the cost of jet fuel,
Qantas has announced it will reduce capacity on several popular routes and cut
an unspecified number of management-level staff.
It plans to cut domestic capacity
growth in the second half to 8 per cent from 14 per cent and international
capacity growth to 7 per cent from 10 per cent.
The measures follow two increases
in fares on domestic and international routes since February to help cover
rising fuel costs.
Alan Joyce, the company’s
chief executive, said Qantas was facing its biggest challenge since the global
recession: “We need to act decisively to respond to rising fuel costs and
natural disasters, just like we did during the global financial crisis, to
ensure the ongoing sustainability of our business.”