Qantas Freight in the firing line?
Athree year, two billion Australian dollar programme of cost reductions, including 5,000 jobs axed, 50 aircraft to be sold or retired and one billion Australian dollars ($893 million) in capital expenditure cancelled over two years, puts the Qantas group's freight businesses at risk.
Qantas Courier and Qantas Freight could be impacted heavily by this substantial cost cutting plan. Announced on 27 February, alongside financial results for the six months ending 31 December 2013, Qantas revealed a statutory loss after tax of 235 million Australian dollars. Qantas chief executive officer, Alan Joyce, says: "Australia has been hit by a giant wave of international airline capacity, with a 46 per cent increase in competitor capacity since 2009, more than double the global increase of 21 per cent over the same period."Qantas was not available for comment, and its announcement came as Air Cargo Week went to press. Of the aircraft to be retired, Qantas states that its two remaining Boeing 737-400 were retired in February and that all of its Boeing 767, which are used by Qantas Freight, will be retired by the third quarter of fiscal year 2015. In the results, Qantas Freight reported earnings before interest and tax of 11 million Australian dollars, down from 22 million in the first half of 2013. The airline blamed this on, "a weak global cargo market". The freight subsidiary's fleet includes, Boeing 767-300 Freighters, Boeing 747-400F and Boeing 737-300F. It also uses Jetstar's fleet, which includes, Boeing 787-8, Airbus A330-200 and the Airbus A320 family. Qantas' strategy statement says the last three of Jetstar's 787-8 order will be deferred. The airline already has 11. Qantas also announced that Qantas International's Boeing 747s will be put on an accelerated retirement programme. However, also on 27 February, Atlas Air announced it will continue to operate two 747-400F on an aircraft, crew, maintenance, insurance service for Qantas. They will serve on routes linking Australia and Asia with the US. In Qantas' strategy statement and group financial results the airline hit out at Virgin Australia again. It says: "The Australian domestic market has been distorted by current Australian aviation policy, which allows Virgin Australia to be majority owned by three foreign government backed airlines."Earlier in February Qantas had accused Virgin of being supported by foreign governments. It also welcomed comments by Australian federal government members about debt guarantees for Qantas.In retaliation Virgin Group chairman Sir Richard Branson took out full page adverts in the Australian press opposing moves to give Qantas any state support.
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