The largest airline in Australia – Qantas Airways Ltd said that 5,000 jobs, or about 15% of its workforce, are to be cut by 2017 after reporting serious financial losses, which are estimated to 252 million Australian dollars (226 million dollars) for the six months from July to December 2013.
The company made an official statement today, revealing that the deliveries of more than 50 new jets of the company are to be postponed, older planes are planned to be sold due to fierce rivalry in Australia and overseas, and salaries will be frozen until Quantas becomes profitable again. It also became clear that the government assistance case has been accelerated by Alan Joyce, who is currently the Chief Executive Officer of Quantas Airways Ltd.
Chief Executive Officer Alan Joyce said in todays statement, which was cited by Bloomberg: “It’s clear that the market Qantas operates in has changed, with structural economic shifts exacerbated by an uneven playing field in Australian aviation policy. We have met these challenges head on.”
As reported by BBC News, Quantas Airways Ltd was said by Joyce to be currently dealing with “some of the toughest conditions… it has ever seen”. The Chief Executive Officer also commented that the company must take actions “unprecedented in scope and depth” in order to confront the changes that the aviation industry in Australia has been suffering from during the last few years.
Quantas Airways Ltd posted a loss before taxes and one-time items estimated to 252 Australian dollars for the period from July to December 31st 2013. The net loss of the company amounted to 235 million Australian dollars. As reported by the BBC News, in December last year the company projected that its losses for the first half of 2014 are expected to reach 270 million Australian dollars due to “immense challenges” from record fuel costs. It also pointed to the competition and strong Australian dollar as other reasons for this unsatisfactory forecast.
The Sydney-based chief market analyst of Invast Financial Services Pty Mr. Peter Esho said for Bloomberg: “The government guaranteeing Qantas financially is the most sensitive question now in terms of market valuation and the share price is unlikely to rise until this is announced. Qantas is shrinking as a business and its international success into Asia is still many years away, if ever.”
Quantas Airways Ltd fell by 9.06% in Sydney to close the session at 1.1550 AUD, slashing the companys market value to 2.54 billion Australian dollars.
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