Beleaguered Australian airline Qantas is set to cut routes, defer or sell more than 50 aircraft and axe 5,000 staff after posting heavy financial losses.
The announcement comes as part of its A$2 billion cost reduction programme and capital expenditure review.
The Singapore to Perth route will be cut, with a number of other “underperforming” routes to be reviewed. Qantas also confirmed some major routes will now operate with smaller aircraft.
Despite the cost-cutting measures there will be no major changes to its A380 European services.
Announcing a A$252 million half-year loss, Qantas chief executive Alan Joyce outlined plans to retire its 15 remaining Boeing 767s and six Boeing 747s, along with the deferment of deliveries for eight remaining Airbus A380s and other aircraft.
Joyce is expected to meet unions to discuss the job cuts and the immediate freeze on wages.
In a statement Joyce blamed the “uneven playing field” in Australian aviation policy. He hit out at rival Virgin, which counts three foreign airlines - Etihad, Singapore Airlines and Air New Zealand among its owners.
“The Australian domestic market has been distorted by current Australian aviation policy, which allows Virgin Australia to be majority-owned by three foreign government-backed airlines yet retain access to Australian bilateral flying rights,” he said.
“Late last year, these three foreign-airline shareholders invested more than $300 million in Virgin Australia. That capital injection has supported continued domestic capacity growth by Virgin Australia despite its growing losses.”
Continued investment
Qantas confirmed despite “tough decisions” being made it still intends to continue the upgrading of its Airbus A330 fleet and the opening of new lounges in Hong Kong and Los Angeles
Joyce said Qantas would continue to seek “major opportunities” for its subsidiary Jetstar in Asia, despite challenging conditions and calls for it to exit the market.
However, he said Jetstar Asia would suspend its expansion in Singapore until conditions improved.
“Jetstar has been a pioneer Australian brand across Asia and we continue to see major opportunities for it in the world's fastest-growing aviation region,” said Joyce.
Earlier this week Qantas confirmed it’s ending the long-term codeshare agreement with South African Airlines (SAA).
The agreement came into effect in October 2000 after SAA stopped flying its own aircraft between Johannesburg and Sydney.
SAA codeshare flights on Qantas's Sydney operation will be off sale on February 21.
Qantas.com