Transportation Industry

Company Watch - Qantas Airways

AirGuide Business, July 21, 2008

7/21/2008

Qantas Airways also cut its forecast capacity growth for 2008/09 to nil, from 8 percent before, and said it would shut call-centers in Arizona and London. Dixon said the job cuts were within the airline's budgeting process for 2008/09, but "obviously there will be a cost". More than 20 percent of Qantas's management and head office support jobs will be cut under the proposed restructuring. Analysts said it was difficult to tell if this would be the end of the belt-tightening. 7/18/2008

Qantas Airways announced on Friday it had reached an in-principle deal with striking engineers, though the terms of the agreement would remain confidential until next week. 7/18/2008

Qantas Airways shares jumped 2.4 percent in a weaker market but closed unchanged at AUD$3.30. The stock has fallen almost 40 percent this year, nearly double the drop in the overall market. CEO Dixon said he hoped this was the last belt-tightening and said Qantas had hedged about 70 percent of its fuel budget for this year at around USD$115 per barrel of crude oil. He also criticized Australia's plan to curb greenhouse-gas emissions and require fuel-burning industries, such as airlines, to pay for emission permits. He said the challenging operating climate made it even more important for airlines to merge and become stronger. "The airline industry has to consolidate," he said. 7/18/2008

Qantas Airways will cut 4 percent of its work force and scrap its growth plan for the coming year, saying the business would be at risk if it fails to offset high fuel prices. The plan to cut 1,500 of its 36,000 workers and scrap plans to hire another 1,200 was Qantas's fifth belt-tightening in three months. It had already raised fares twice and cut capacity twice. The global airline industry faces what it calls a "perfect storm" of skyrocketing oil prices, with carriers worldwide shedding thousands of jobs and closing down routes as losses mount, threatening some of them with insolvency. As part of the latest measures, 7/18/2008

Qantas Airways has reached an in-principle agreement with its long-haul pilots for an annual 3 percent wage increase for a further five years. It will come into effect following a vote by the pilots, Qantas said. 7/17/2008

Qantas Airways is reviewing its flight operations, which could lead to more job cuts, capacity cuts and higher ticket prices, an Australian newspaper reported on Wednesday. Citing a memo to Qantas staff, The Age newspaper said details of the review would be released next week. Airline CEO said oil prices above USD$140 a barrel had changed the way Qantas did business forever. Qantas expects to decide in August whether to float a stake in its frequent-flyer program. It has already cut routes, frozen executive wages and cut jobs while battling striking aircraft engineers over a long-running dispute, with engineers pressing for an average 5 percent pay rise. 7/16/2008

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