Qantas lowers targets, cuts plane orders

Australian carrier has lowered its growth targets and cancelled orders.

Travel Insurance News - 16/06/2011

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Qantas has announced that it is scaling back growth targets and cutting back on aircraft orders. The Australian airline announced the news on Wednesday as it responds to sluggish domestic demand amidst high fuel prices and natural calamity.

Alan Joyce, Qantas CEO, said the carrier was now aiming to achieve a domestic capacity growth rate of 5.5 per cent. The airline had previously been targeting growth of 8 per cent.

Mr Joyce also announced that the airline was scaling back its spending programme. Overall this year, Qantas is going to spend Aus$400 million less than it had planned.

Qantas is cutting Aus$100 million off its spending in the latter half of the present financial year, which will end this month. The other Aus$300 million saving is coming out of the previously-planned budget for 2011-12.

Qantas had been planning to take delivery of 43 new planes in 2011-12. This number is dropping by nine, to only 34.

Mr Joyce also said Qantas has scrapped or deferred orders for three narrow-body jets due to be delivered later this year. Another nine jets that were on order are also being cancelled or put off until later.

The airline had previous warned that it planned to cut both capacity and staffing. Most of the jobs lost will be in management.

Qantas says it has been forced to take ‘decisive action’ in the face of record high prices of jet fuel and a series of natural disasters that have been challenging global aviation just as it appeared to be recovering from the pain of the economic slump.

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