Troubled Qantas to Reduce Fleet, Cut 5,000 Jobs and Postpone Delivery of Eleven New Aircraft

This Boeing 767-338ER aircraft operating as Qantas flight 434 to Sydney awaits its passengers at the gate at Melbourne Airport. Photograph by FlyerTalk member Moomba. Click on the photograph for a trip report written by Moomba.

An official announcement released from Qantas Airways Limited revealed significant measures to reduce costs — including reducing approximately 15 percent of its workforce by furloughing 5,000 employees, “freezing” wages for remaining employees, selling its terminal lease in Brisbane, eliminating at least one flight routes, and removing aircraft from its fleet while postponing the delivery of new aircraft — in order to cut costs by two billion Australian dollars over the next three years, as a net loss of 235 million Australian dollars for the second half of 2013 was reported due chiefly to higher fuel prices and intensifying competition both domestically and internationally.

Some of the measures to be implemented by Qantas include the following:

  • The route served by Qantas between Perth and Singapore will be eliminated by sometime during the first quarter of 2015
  • A deferment of the remaining eight Airbus A380 and the remaining three Boeing 787 “Dreamliner” aircraft ordered by Qantas
  • Suspension of plans to grow the Jetstar brand in Asia
  • The terminal lease in Brisbane is expected to be returned to Brisbane Airport Corporation
  • Retirement of the entire fleet of Boeing 767-300 aircraft within a year and the remaining six non re-configured Boeing 747-400 aircraft within two years
  • Of the reduction of 5,000 jobs, 1,500 will be from management and support positions; while 3,500 jobs will be from operational redundancies
  • The routes between both Singapore and Sydney and Singapore and Brisbane will be operated primarily by Airbus A330-300 aircraft starting sometime during the first quarter of 2015

 

The announcement is not expected to affect the partnership of Qantas with Emirates Airline, which became controversial when Qantas announced that pork food products would be removed from some of its flights last April.

Apparently that was not the type of “pork” Qantas should have removed from its operations to mitigate its financial woes.

Qantas — whose name is originally from an acronym which stands for Queensland And Northern Territory Aerial Services when it was first founded on November 20, 1920 — is one of the oldest commercial airlines in the world which is still in operation today. Only KLM Royal Dutch Airlines and Avianca have been in operation longer, both of which were launched in the autumn of 1919.

While Delta Air Lines continues to strengthen and increase its profitability with announcements of changes in policies such as this which are considered by many FlyerTalk members to be unfriendly to frequent fliers, Qantas seems to be sinking deeper into a financial abyss — causing FlyerTalk member VH-RMD to ponder: “I asked some years ago, would Qantas see its 100th birthday…I think the Titanic has hit the iceberg already, it’s now how many souls can be saved before she goes down completely.”

Is VH-RMD correct?

I was pondering comparing the recent success of Delta Air Lines — which emerged from bankruptcy protection in April of 2007 — with the pain Qantas is currently enduring; but it initially seems to me that at least some of the factors affecting both airlines are different. Still, I will ask you this question: what — if anything — could Qantas learn from Delta Air Lines; or what do you believe Qantas should do to reverse its course to financial ruin and possible extinction? How will the latest news by Qantas affect you?

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Comments (Showing 3 of 3)

  • […] An official announcement released from Qantas Airways Limited revealed significant measures to reduce costs — including reducing approximately 15 percent of its workforce by furloughing 5,000 employees, “freezing” wages for remaining employees, selling its terminal lease in Brisbane, eliminating at least one flight routes, and removing aircraft from its fleet while postponing the delivery of new aircraft — in order to cut costs by two billion Australian dollars over the next three years, as a net loss of 235 million Australian dollars for the second half of 2013 was reported due chiefly to higher fuel prices and intensifying competition both domestically and internationally. Some of the measures to be implemented by Qantas include the following… The Gate […]

  • Himeno at 4:45pm February 27, 2014

    DL (and every other US airline) had the use of Chapter 11 of the US Bankruptcy Code.
    There is no such thing in Australia. In Australia, the only option is stay in business, or liquidate.

    QF should never have moved Alan Joyce up from JQ to Group CEO when Jeff Dixon retired. It is also likely they wouldn’t be having as many problems if the 787 had not been 5 years late.

  • PunterX at 11:46pm March 01, 2014

    As a frequent flyer with average 350,000 miles per year (since 1995) and premium member of 4 FF programmes and an Australian I have my own view of Qantas, As a Melbourne based flyer I just hate the Sydney transfer. It’s just so makeshift and dysfunctional, especially inwards. I much prefer to make a seamless transfer in a properly set up international hub such as Dubai or Singapore. It’s always easy for me to make a decision to change airlines whenever I am offered a transfer through Sydney.

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