Announcing a record statutory after-tax loss of A$2.8 billion ($2.6 billion) on August 28, Qantas chief executive Alan Joyce said that the Australian flag carrier has “come through the worst” as it navigates an aggressive cost-cutting program announced in February 2014.
Qantas industrial disputes
The Qantas Sale Amendment Bill, which serves to repeal part of the Qantas Act and effectively removes restrictions on foreign ownership and stipulations affecting Qantas’ business operations, passed Australia’s Lower House of Federal Parliament on Thursday by a vote of 83 to 53.
Qantas Airways’ August 23 cancellation of “firm commitments” covering 35 Boeing 787-9s previously slated for delivery beginning in 2014 demonstrates the need for an airframer to remain flexible in the face of changing industry demand. The sudden change, prompted by after-tax losses in the current financial year, also demonstrates the continued vulnerability of the airline sector to rising costs and uncertain demand.
While Qantas participates in a series of negotiating sessions with three of its employee unions, it appears the threat of low-fare competition in the region won’t soon abate, raising tensions between the Australian flag carrier’s management and workers who fear losing their jobs to overseas “outsourcing.” The airline drew the ire of its employee groups when it announced in August plans to open a new airline based in Asia “with a new name, new aircraft and a new look and feel,” along with a new low-fare venture with Japan Airlines and Mitsubishi called Jetstar Japan.