Qantas cuts routes, jobs as profits tumble

Qantas has cut routes, announced a review of its maintenance bases and restructured engineering operations as it continues to strip costs out of the business.

Around 500 jobs will be axed in the immediate overhaul of ground operations with more roles likely to go following a two-month “consultative review” of heavy maintenance. But chief executive Alan Joyce stressed that “not one” job will be going off-shore.

The carrier is targeting savings of $700 million over 2011/12 and 2012/13.

Among the route changes announced this morning by Joyce were the withdrawal of its Singapore-Mumbai and Auckland to Los Angeles routes from May 6. A number of capacity changes will take place on other routes with Sydney to Bangkok 747 aircraft replaced with smaller A330s on certain services while the 747 will replace A330 flights between LA and New York.

Between Sydney and Auckland, A330s will be replaced with B737-800 aircraft.

The fresh shake-up came as Qantas unveiled an underlying pre-tax profit of $202 million in the six months to December 31, a fall of 52% on the previous corresponding period.

Qantas’ underlying earnings before profit and tax (EBIT) fell from $165m to $66m, while Jetstar reported an EBIT of $147m, a rise of $4m on last year.

The carrier took a $194m hit due to industrial action while the fuel bill increased 26% to $2.2 billion.

Joyce said the financial performance was a good one in challenging circumstances.

He added that management is continuing to “evaluate the options for establishing a premium airline in Asia”.