Qantas Unveils Restructuring Plans

 - August 16, 2011, 11:27 AM

In a bid to resuscitate  “steadily fading” overseas operations, Australia’s Qantas Airways plans to make 1,000 domestic jobs redundant, defer Airbus A380 (and possibly some Boeing 787) deliveries, retire some Boeing 747-400s, and replace some long-haul services with code-sharing flights. The company hopes to stimulate its Qantas International business by establishing two offshore joint ventures: a “premium” operation with an undisclosed Asian airline and a low-cost carrier (LCC) partnership for its Jetstar subsidiary with Japan Airlines (JAL) and Mitsubishi.

CEO Alan Joyce said Qantas International faces serious structural challenges, arising from increased competition and high costs. “Large numbers of routes, primarily to Asia and Europe, are loss-making, with no improvement in sight. Our share of the Asian international market has collapsed to 14 percent.” Plans include opening global “gateways” through closer ties with Oneworld alliance partners.

Qantas has deferred delivery of its final six A380s for up to six years and will cut London services to one route through Singapore (otherwise using British Airways capacity beyond Bangkok and Hong Kong). The JAL/Jetstar/Mitsubishi joint venture will launch domestic services by the end of 2012, international operations within another 12 months, and ultimately operate 24 Airbus A320s. The planned Asia-based premium airline will have “a new name, a new brand [and] new aircraft,” said Joyce.

Qantas has committed to ordering at least 106 A320-series aircraft (including 78 A320neos) and plans to acquire purchase rights and options covering another 194. It plans to retire four Qantas 747-400ERs before next July. “Future 787 deliveries, like all aircraft orders, will be reviewed as required,” said Qantas in a statement.