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Qantas will increase capacity on its domestic network but will defer delivery of two A380 superjumbo jets as part of $400 million in capital expenditure cuts to its struggling international business, the airline announced today.
The cuts come on top of a $500 million capex reduction announced in February and will see the two A380s scheduled to arrive next year pushed back to 2016-17. Qantas is slated to receive another six A380s from 2018-19.
The airline said it would save between $280 and $365 million over the next two years through a range of “transformation initiatives,” including withdrawing from money-losing routes and modernising operational practices. The cuts will see the Qantas Group’s capital expenditures drop from a planned $2.3 billion to $1.9 billion in 2012-13.
“Our priorities remain to build on our strong domestic business, enhance Qantas Frequent Flyer, turn around Qantas International and grow Jetstar in Asia,” Qantas CEO Alan Joyce said.
Joyce said Qantas had completed its review of plans to consolidate its heavy maintenance operations in Australia and would announce those plans by mid-month. Media reports have indicated that the airline will shed about 400 jobs at its Tullamarine maintenance facility with another 600-plus jobs at its Avalon facility likely to go within two years. Qantas announced 500 job cuts as part of the previous round of cuts in February.
Qantas also today announced a range of plans to increase domestic capacity in what the airline described as an effort to maintain its profit-maximising 65 per cent share of the domestic market.
Those plans include increased peak hour services on core business routes between Sydney, Melbourne and Brisbane, the reintroduction of Boeing 747 services between Sydney-Perth and increased Airbus A330 services between Melbourne-Perth. Qantas said Jetstar will increase its capacity in key leisure markets while QantasLink will introduce Fokker 100 services between Brisbane and Emerald (operated on its behalf by Alliance Airlines).
Those changes are due to take effect in the next financial year beginning in July.
Brett + Pete
says:Keep what we’ve got, see what’s new
Phil
says:Increase Syd-Per services with 20+ year old 747’s that are unreliable in International Service, & increase east coast peak services by increasing usage on antique equally delay prone 20+ year old RR engined 763’s.
That’s a great way to push even more passengers to Virgin. Brilliant idea Mr Joyce.
Michael Anderson
says:yes but Phil, Qantas is in trouble. It’s costs are too high (ie too many staff, paid way over the odds.
norman
says:How long before we see the 777 on international route never not while Mr joyce head up his tukass he would have to admit he wass wrong…. And do you thing before the decade is over we wil have 2 class A380s flying in jetstar colurs on some long haul routes
Hutch
says:Mr Joyce may be many things, but its pretty hard to blame him for qf not getting 777s. That was a decision made by previous CEO and since qf is close to getting 787 it would be hard to argue the case to get them now.
Hutch
says:Phil, I agree with you but dont really see the alternative. New 737-8 do enter qf domestic fleet but not enough…. so need the 767. Qf problem is poor fleet planning 5-7yrs ago
Uma
says:I think it is quiet on landing beuasce the latest Airbus wing design provides much more lift than Boeing’s, therefore it needs almost no trust to stay in the glide path for touchdown. It is pretty much gliding when it crosses over the fence . I want to see how noisy the mamooth will really be on the take-off roll while sitting right next to the engines like when one is in Business Class in a A330. The noise is unacceptably loud in my humble opinion.