Qantas International announces spending cuts
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Qantas Airways has announced plans to impose cost reduction measures across its international network as the national carrier bids to turn around it international performance. These cutbacks are part of a broad strategy to drag its long-haul business out of the red, with exact details due to be announced on 24 August.
Speaking to ABC News, Qantas Chief Executive Officer Alan Joyce said; “We need to make significant changes to our international services.” He explained that an aggressive policy is being devised with cutbacks being made where necessary. Joyce said that savings will also be made in the luxury travel division, as well as building interline partnerships and pushing hard on Asian expansion.
According to Bloomberg, Qantas’ international arm has already forecast annual losses of AU$200 million (US$215 million) for the year ending 30 June, a figure which is expected to rise over the financial year. Clawing back the deficit will be a tall order as the airline has lost a large proportion of its international market share over the last decade, slipping from 35% in 2001 to about 20% today. Fortunately for Qantas, strong performances from its budget carrier Jetstar and the domestic carrier have offset overseas losses as the company registered 46% growth in pre-tax profits for year ended June.
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