Qantas will shed 5000 jobs, cut routes and ground planes after posting a record statutory loss before tax of $305 million for the six months to December 31.
The airline is pulling all levers in an effort to pull the icon flying kangaroo out of the nose dive.
It will cut routes and ground planes.
The airline is facing intense competition from overseas airlines and only commands 17 per cent of the inbound / outbound market to Australia.
Its average staff cost is $92,000 compared to Singapore Airlines at $42,000.
On the domestic front its costs are estimated to be up to 17 per cent higher than Virgin Australia which now offers a business class product.
Since Virgin Australia launched its business class in 2011 premium class airfares have plummeted by 40 per cent.
From 2001 when Ansett collapsed till 2011 Qantas enjoyed a monopoly on domestic business class.
Earlier this month Qantas chief executive Alan Joyce warned in a speech in Canberra that the cuts would be greater than those achieved by American Airlines in 2012 of 17 per cent.
In a separate announcement Qantas said it had reached agreement with Brisbane Airport Corporation (BAC) covering terminal and runway access at Brisbane Airport, which includes arrangements for the airline to dispose of its long-term lease on its terminal.
Qantas holds a 31 year lease, signed in 1987, on the northern end of the Domestic Terminal at Brisbane Airport which is due to expire on 30 December 2018.
Under the new arrangements, Qantas would retain exclusive use and operational control over much of the northern end of the terminal until the end of 2018 while securing rights to key infrastructure beyond this period.
In addition, BAC plans to make a significant investment in upgrading and improving facilities and services within the terminal, such as lounges and will assume control of the retail space of this part of the terminal.
Qantas will receive total cash proceeds of $112 million from BAC under the arrangements.
The arrangement also covers Qantas’ use of the runway system at Brisbane Airport, including current infrastructure and the new parallel runway, currently under construction.
Qantas Group Chief Executive Officer Alan Joyce said the agreement was a win-win for both parties which would have significant benefits to Queensland.
“Brisbane Airport is one of the most important airports for Qantas today and increasingly so into the future. This investment is vital to the ongoing growth of aviation in Queensland which helps drive tourism and boost the economy,” Mr Joyce said.
See the Qantas Group Strategy here
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