Forced to choose between the lesser evil, Australia's national air carrier Qantas announced it will slash 1,000 jobs to rein in costs as it works to keep operations afloat.
"We will do whatever we need to do to secure the Qantas Group's future," Alan Joyce, Qantas chief executive, said on Thursday.
Apart from the job cuts, Qantas will also cut spending and freeze salaries, noting it expects to report an underlying loss of $250-$300 million for the six months to December 31.
Shares in the fiscal laden Australian air carrier immediately tumbled on Thursday.
The airline could lose more than what it announced, according to analysts, by as much up to $500 million for the full financial year.
Record fuel costs, a strong Australian dollar and fierce competition from subsidised rivals are what forced Qantas to decide on the job cuts as well as spending freeze.
Bills on fuel costs for the half financial year already zoomed way above compared to the second half of 2012, which were Aus$2.27 billion -- Aus$88 million higher.
"The challenges we now face are immense," Mr Joyce said in an update to the Australian stock exchange.
"Since the global financial crisis, Qantas has confronted a fiercely difficult operating environment -- including the strong Australian dollar and record jet fuel costs, which have exacerbated Qantas' high cost base," he added.
The Australian international market is the toughest anywhere in the world, Mr Joyce pointed out.
Mr Joyce will be having a 38 per cent cut in his own pay, the same also with the Qantas board.
"We have reduced the group's unit costs, excluding fuel, by a total of 19 percent since FY09, including by five percent in FY13. But these actions are not enough to deal with the current situation," he said.
He added the company will be undertaking a structural review, of which analysts foresee could lead to a sell-off of its Jetstar assets in Asia.
"All options are on the table in terms of the structural review, we're not ruling anything in or anything out," Mr Joyce said.
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