Qantas announces cost saving measures; 1,000 jobs lost, CEO and board take pay cuts

Qantas has issued a surprise profit warning, sending shares skydiving.

Qantas has issued a profit warning and announced 1,000 job cuts due to a deterioration in the marketplace.

The airline said in a statement that a "marked deterioration" in operations was caused by tough competition, a strong Australian dollar and sluggish demand by consumers. As a result, the Australian airline predicts it will suffer losses of up to AUD$300 million between July and December.

Fuel costs are expected to rise by AUD$88 million, and as the economic situation is "volatile," Quantas cannot offer any further guidance at the moment.

Following the news, shares in the airline dropped by over 15 percent.

Chief executive Alan Joyce said the situation demanded "urgent action," and Quantas faces "immense challenges" in the future. Joyce said the airline will do "whatever we need to do to secure the Qantas Group's future."

The airline plans to make cost savings of AUD$2 billion over three years, including the loss of 1,000 employees, a CEO and board pay cut, a pay freeze, restriction of bonuses and the optimization of the fleet.

Qantas says that the Australian international market is currently the toughest in the world, and competitions abroad have changed the economic situation due to "ownership or generous support" by governments.

Via: BBC

Image credit: Qantas

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