Millennium Post

Qantas delays A380 deliveries

Embattled carrier Qantas said on Friday it will delay the delivery of two A380 superjumbos as part of a further $410 million in spending cuts as it works to turn its business around.

The Australian airline had already announced Aus$500 million in cuts in February, which included job losses for cabin crew and pilots as well as in catering,
engineering and ground operations.

Qantas has also been reviewing its maintenance operations to identify how to keep costs down, which could see more jobs go.

Chief executive Alan Joyce said the latest savings would come from delaying the delivery of two Airbus A380s. Qantas was to receive two of the superjumbos in early 2013, but will now get them in the 2016-17 financial year. Another six A380s will be delivered to Qantas from 2018-19.

The changes will cut Qantas’s capital expenditure by Aus$400 million in 2012/13 to Aus$1.9 billion.

Joyce said the decision was consistent with the group’s commitment to financial discipline. ‘Our priorities remain to build on our strong domestic business, enhance Qantas Frequent Flyer, turn around Qantas International and grow Jetstar in Asia,’ he said.

Joyce added that the group’s balanced portfolio left it well-placed amid ongoing high fuel prices and the changing global economy, while taking advantage of growth opportunities in Australia, Asia and elsewhere.

‘We are acting decisively now to position ourselves for strong, sustainable growth over the long term,' he said.

The latest cuts come after the carrier posted an 83 per cent slump in first-half net profit in the six months to December to Aus$42 million.

High fuel costs played a part, as did Joyce pulling all Qantas planes out of the skies for 48 hours last October as part of a row with staff over plans to shift the focus of its ailing international arm to Asia. The airline said progress continued on shaking up its international operation with benefits of Aus$280-$365 million to be realised across financial years 2012-14, from cost savings and halting loss-making routes. It announced a significant boost to domestic flights in an effort to combat Virgin Australia’s assault on its business flyers.

‘This will ensure that the group retains 65 per cent domestic market share while delivering the best customer experience in the market,’ said Joyce.
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