Qantas Airways has announced it is cutting key routes to Japan and New Zealand, retiring aircraft and cutting a number of management positions. A severe drop off in demand is blamed for the cut in routes as the airline attempts to shore up costs.
Qantas stated it would incur an A$140 million hit from the cost of natural disasters, which is on top of the $25 million caused from the grounding of its A380 following the mid-air engine blow out in November.
Chief executive Alan Joyce has also stated he is reviewing the airline’s manpower costs:
“We want to limit redundancies wherever possible and will be using a range of initiatives to manage the reduction in capacity, including annual and long-service leave. At this stage only management positions will be made redundant,” Joyce said in a statement.
Domestic capacity will be cut in second half of the current financial year to 8% from 14%, while international capacity will grow to 7% from 10%.
Low cost subsidiary Jetstar is also suspending four weekly return services from Australia to Japan between April and August.