Qantas slashes another 1,500 jobs, cuts back on growth plans
18 Jul 2008
Sydney: Australian flag carrier, Qantas Airways, has said it will cut 4 per cent of its workforce and also abandon growth plans for the coming year in an attempt to offset soaring fuel prices. The airline has already raised fares and cut capacity twice over the previous three months.
The latest downsizing will likely see 1,500 staffers losing their jobs. Qantas has also said that there would be no capacity growth for 2008-2009, as compared to 8 per cent for the year before. It will also be closing its call-centres in Tucson, Arizona and London.
Though Qantas chief executive Geoff Dixon expressed his confidence that the carrier would weather the storm, he reacted strongly to a query whether the unions would take these job cuts lying down. "Our costs have gone up over A$2 billion from year to year and if we do not act, there won't be any unions because there won't be any Qantas," he responded.
Dixon also expressed the hope that this would be the last of the cost-cutting measures that the airline would be implementing this year. He said that the airline had hedged about 70 per cent of its fuel budget for this year at around $115 per barrel of crude oil.
A International Air Transport Association estimate suggests that the world's airlines stand to lose more than $6 billion this year from fuel cost related vagaries.
Qantas stock has fallen almost 40 per cent this year, almost twice the drop in the overall market.
