The carrier will axe about 4 per cent of jobs and also cancel plans to hire 1,200 additional workers, it said in a statement to the Australian stock exchange today. It will also ground as many as 22 aircraft.
Qantas follows AMR Corp.'s American Airlines, Delta Air Lines Inc and SAS Group's Scandinavian Airlines in eliminating staff as record fuel prices erode earnings. Industrywide losses may total more than $6.1 billion this year, the worst since 2003, according to the International Air Transport Association.
"This won't be the last of the cuts," said Tom Elliott, managing director of hedge fund MM&E Capital Ltd in Melbourne, which manages the equivalent of $150 million. "You wonder how far they have to go." Elliot doesn't own shares in Qantas.
Qantas were unchanged at A$3.30 at the close of trading in Sydney. The shares have declined 39 per cent so far this year compared with a 24 per cent drop in the S&P/ASX 200 Index.
The airline will cut about 20 per cent of management and head office support jobs. It will also freeze executive pay and may raise fares further. The carrier is "quite profitable," Chief Executive Officer Geoffrey Dixon told reporters on a conference call.
Engineer Agreement: Earlier, Qantas said it had reached a new four-year labour agreement with engineers, ending a long-running dispute that had forced it to cancel some flights and delay others.
Earnings will drop about 47 per cent in the year ending June, 2009, according to the median estimate of five analysts compiled by Bloomberg.
As part of a push to increase fuel efficiency, the airline is adding new aircraft. The Sydney-based carrier has also cut some routes, grounded planes and announced the potential sale of its frequent-flyer business.
