Qantas Announces $252 Million Half-Year Loss, 5,000 Jobs Cut
By Vittorio Hernandez | February 27, 2014 11:40 AM EST
Qantas' new deal with Emirates is expected to see its profits rise.
It was another turbulent six months for Australian flag carrier Qantas which reported on Thursday a half-year loss of $252 million. The embattled airline also confirmed rumours that it would cut 5,000 jobs over the next three years.
Of the 5,000 jobs, 1,500 will be management and non-operational positions, while the remaining 3,500 would come from maintenance operations and catering facilities.
Ahead of the anticipated axing, Qantas pilots had been offered counseling, reported The Australian, citing internal memos from chief international pilot Dick Tobiano and chief domestic pilot Al Crawford. The memo stated "all parts of the (Qantas) business will be affected."
The memo invited pilots who feel they need extra support or want to discuss other matters to contact any of them, Nic Wright or any other member of the Flight Operations team.
The axing of jobs is part of a $2-billion cost-cutting strategy initiated by the Flying Roo management. It includes freezing of salaries for all employees and a pay cut for Qantas executives.
Qantas Chief Executive Alan Joyce said the $252 million loss in not acceptable and this resulted in tough decisions made by the air carrier's management.
"There are many Australian companies that have failed because they were not prepared to make the hard decisions. Qantas is not one of them," Skynews quoted Mr Joyce.
News of the half-year results caused Qantas shares to go down 10 cents or almost 8 per cent to $1.17.
Mr Joyce, who will meet with the unions on Friday to tackle the job cuts, blamed the losses of Qantas to the uneven playing field with Virgin which enjoys the financial backing of Etihad, Singapore Airlines and Air New Zealand.
To address this situation, the federal government of Australia is considering amending the Qantas Sale Act to lift the foreign ownership limit, but Prime Minister Tony Abbott has ruled out cash assistance for the embattled flag carrier.
Virgin Australia opposed government intervention, saying that the cause of Qantas's financial woes is mismanagement.
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