Reuters - Video

Edition: US | UK | IN | CN | JP

Most Popular

Another flagship carrier in crisis

Thursday, February 27, 2014 - 01:40

Feb 27 - Australian carrier Qantas Airways is cutting 15 percent of its workforce after reporting a first-half loss amid growing competition in both international and domestic operations. As Sonia Legg reports a price war with Virgin has been part of the problem.

▲ Hide Transcript

View Transcript

It's known as the Flying Kangaroo but business at Qantas has lost its bounce. The Australian carrier has just reported half year losses of $226 million. As a result it's slashing costs by $1.8 billion over the next three years. Older jets will be sold off and the workforce reduced by 15%. Alan Joyce is CEO. (SOUNDBITE) (English) QANTAS CHIEF EXECUTIVE ALAN JOYCE SAYING: "We will be reducing our employee numbers by the equivalent of 5,000 full-time staff over the next three years. This number includes the one thousand we announced last December. This will be managed through reductions right across the group, including a reduction of management and non-operational roles by 1,500." Qantas has been battered by high fuel costs and a strong Australian dollar. A price war with arch-rival Virgin Australia hasn't helped. And last year its credit rating was relegated to junk status. It's now seeking a government debt guarantee to give it access to cheaper capital. (SOUNDBITE) (English) QANTAS CHIEF EXECUTIVE ALAN JOYCE SAYING: "We will cut where we can in order to invest where we must. We'll be a far leaner Qantas Group and it should be clearly understood that we are taking these actions, we must take these actions irrespective of any decision which the government may or may not take in relation to levelling the playing field." Qantas says Virgin enjoys a funding advantage thanks to major foreign shareholders. The Australian government is looking at easing restrictions on ownership of the airline from abroad. And says it wants to see Qantas to 'survive and flourish'. But for that to happen, it must first go through a period of pain many other flagship carriers have already experienced.

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

Another flagship carrier in crisis

Thursday, February 27, 2014 - 01:40