Qantas Capacity, Jobs, Deliveries Take Hit
Bradley Perrett/Beijing perrett@aviationweek.com 
Qantas Airways, announcing up to 1,750 job losses, aircraft delivery deferrals and a capacity cut, has finally joined the ranks of airlines losing money amid the global recession.
The Australian carrier, which as recently as February still expected to make money in its current financial half-year, says it has deferred delivery of four A380s and 12 Boeing 737-800s and is negotiating for the delayed arrival of 15 Boeing 787s, among 65 it has ordered.
The A380s will be deferred by 10 to 12 months and the 737s by an average of 14 months.
The airline will cut capacity by 5%, adding to the 9% reduction announced last year. That will free up 10 aircraft, which can be grounded and offered for sale. Capacity will be reduced by reducing frequency, not by withdrawing from routes. Domestic, U.S., British and South African services will be affected most.
"We have faced accelerated declines in passenger demand and revenue while market competition has intensified," says CEO Alan Joyce.
International and freight operations have suffered the most, he says, but no-frills offshoot Jetstar, with its low-cost base, is continuing to perform well.
Among the job cuts, 500 will be management positions. The other staff reductions will be the equivalent of up to 1,250 full-time jobs but the airline wants workers to share jobs so it can minimize the number of sackings.
Qantas announced the elimination of 90 management positions last month. That followed the elimination of 1,500 jobs in July. The company has 34,000 employees.
Qantas says it will make a pretax profit of A$100 million to A$200 million ($73 million to $146 million) for the full year ending June 30, down from around A$500 million previously forecast. Since it made A$288 million in the first half, the forecast means that the carrier is now losing money in its second half.
It made A$1.41 billion before tax last year.
The airline's fortunes are following those of the Australian economy, which has been riding out the recession far better than those of most Western countries but is now looking weaker than before.
Separately, Qantas has dropped plans to set up a joint maintenance operation with Malaysian Airline System, which would have handled the Australian carrier's offshore heavy maintenance, using it as a base-load business while seeking third-party work.
Moreover, Qantas says it is not looking at joint maintenance businesses with anyone, nor is it planning a merger. One with the Malaysian carrier had been rumored.
"Qantas is not in active discussions on mergers with Malaysian Airline System and we are not pursuing further discussion on any potential maintenance, repair and overhaul joint venture," says a Qantas representative.
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