QANTAS has announced further capacity cuts equivalent to grounding 10 aircraft and has revised its profit before tax forecast for the 2008/09 financial year to a$500 million(US$320.9 million)as the global financial crisis continues to impact on passenger demand.
Former chief execytuve if Qantas,Geoff Dixon,said before his departure that the airline would not be increasing its previously announced reduction of 1500 jobs,however,it will"be seeking further efficiencies by implementing an accelerated leave programme,"he said in a company statement without providing further details.
With regard to latest round of capacity cuts,Mr Dixon,said they come on top of those announced earlier this year.
"By taking this action now we will have the flexibility to switch growth back on as soon as market conditions improve,"he said in a company statement.
"We are in unpredictable times and the international business market,in particular,has slowed,"he said.
Mr Dixon said that while the current economic downturn had principally affected Qantas's mainline international operations,the carrier's domestic operationsm,namely Jetstar,Qantas Frequent Flyer and Qantas Freight"all continue to perform well"
"This highlights the value of the group's segmentation strategy.In particular,our two-brand strategy with Jetstar and Qantas is giving us the flexibility to better manage changes in the market."
Mr Dixon said Qantas would manage the capacity cuts by not taking up the planned lease of two Airbus A330-200 aircraft;changing the flying patterns of existing aircraft to free up the equivalent of six Boeing 747-400s,three Boeing 767-300s and one Airbus A320-200 aircraft between now and mid-2010 and halt all planned domestic market growth for Qantas and Jetstar.
"Our actual flying in the next six months will be four per below the equivalent period in 2008,"he said.
The then chief executive officer designate of Qantas,Alan Joyce,but now the CEO,added that while Qantas had benefited from the recent fall in fuel prices,this had been offset by the global slowdown and reduced demand since September.
"Our fuel bill for 2008/09 will still be A$750 million higher than last year,"he said.
"Our forecast fuel exposure in 2008/09 is currently 97 per cent hedged at a worst-case crude oil hedge rate of US$106 per barrel,including option premium,"said Mr Joyce.