Qantas

Qantas profits dive, more jobs, services to go

The world’s oldest continuously flying airline has had its fair share of turbulence but recent events have hit the company hard

Press TV,

21 June, 2012

Qantas announced in early June of a 90 per cent drop in profits for the financial year, ranging from 50 to 100 million dollars, well down from the 550 million dollar profit recorded last financial year.

Management blame the downturn on the Eurozone crisis, rising fuel bills and most prominently on losses on international routes, where it’s expected that $450 million dollars was lost, double last year.

Qantas’ former Chief Economist, Tony Webber says the airline’s international arm is suffering but proposed cuts won’t impact overall services.

The International routes the airline flies is becoming increasingly competitive, particularly from middle-eastern groups such as Emirates and Etihad and Singapore Airlines’ budget carrier Scoot recently launched flights between Singapore and Sydney. Tony Webber says there’s now an excess of supply in the market.

Several industrial relations disputes have also hit the company, including the shock decision by management to ground the entire airline in late October 2011 over wage and service disputes with staff.

The Transport Workers Union is in arbitration with Qantas over the continuing disputes.

Fair Work Australia is also investigating potential employment breaches when Qantas imported Thai stewardesses to work on domestic routes on unfair pay.

Since the profit announcement, Qantas’ share price has dived by a third and the airline is being undervalued. CEO Alan Joyce recently admitted that defense strategies to fend off potential hostile takeover bids have been set up, though no formal offers have been received.

For video GO HERE