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Wed, Apr 15, 2009 - Page 10 News List

Qantas slashes profit forecast and announces job cuts

NOSEDIVING PROFITS: Fresh job cuts came after 90 management positions were dropped last month and 1,500 other jobs were eliminated late last year

AP , SYDNEY

A Qantas Boeing 767-338/ER flies over Sydney airport yesterday. Qantas yesterday slashed its full-year profit forecast by more than half and announced further capacity and job cuts in response to deteriorating trading conditions, sending its shares down as much as 11 percent.

PHOTO: REUTERS

Qantas Airways Ltd yesterday slashed its annual profit forecast and announced that it would cut 500 management positions and ground some aircraft in response to low demand for its international services and the continuing economic decline.

CEO Alan Joyce said another 1,250 positions could also be affected.

The Australian national carrier dropped its full year pretax profit outlook to between A$100 million (US$73 million) and A$200 million, down from its previous forecast of A$500 million.

“Market conditions have deteriorated, especially in our international business,” Joyce said. “We have no choice but to lower our profit forecast and make major changes to ensure Qantas can weather the current commercial environment.”

COSTS

He said the changes would include reducing costs but added, “We will not be withdrawing from routes to achieve this.”

The cost-cutting measures include a 5 percent reduction in flying capacity, cuts to freight capacity, grounding the equivalent of 10 aircraft and making them available for sale, deferring orders on four Airbus A380s and other aircraft and reducing capital expenditure by at least A$800 million this year and next.

Joyce said Qantas would remove 500 management positions and said that “up to 1,250 equivalent full-time positions” would also be affected but that efforts would be made to keep those jobs, including attrition, reducing some jobs to part-time positions or encouraging leave without pay.

CUTS

The job cuts come after 90 management positions were dropped last month and 1,500 other jobs were eliminated late last year.

Qantas announced in February that its net profit fell 66 percent in the last half of last year as it paid high fuel costs and the global financial downturn sent high-end passenger numbers tumbling.

“Qantas expects the current volatility in operating conditions to continue for some time,” Joyce said.

He stressed that the company was determined to see the overall brand remain strong and profitable over the long term.

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