Australian airline Qantas said today it will cut 4 per cent of its workforce and scrap its growth plan for the coming year, saying the business would be at risk if it fails to offset soaring fuel prices.
The plan to cut 1,500 of its 36,000 workers and scrap plans to hire another 1,200 was Qantas's fifth belt-tightening in three months. It had already raised fares twice and cut capacity twice.
The global airline industry faces what it calls a "perfect storm" of skyrocketing oil prices, with carriers worldwide shedding thousands of jobs and closing down routes as losses mount, threatening some of them with insolvency.
"This is one of the toughest industries out there," Qantas chief executive Geoff Dixon told reporters.
As part of the latest measures, Qantas also cut its forecast capacity growth for 2008/09 to nil, from 8 per cent before, and said it would shut call-centres in Tucson, Arizona and London.
Mr Dixon said the job cuts were within the airline's budgeting process for 2008/09, but "obviously there will be a cost". More than 20 per cent of Qantas' management and head office support jobs will be cut under the proposed restructuring.
Analysts said it was difficult to tell if this would be the end of the belt-tightening.
"Jet-fuel prices are extravagantly high around the world and the unknown is how much people are going to cut back on their air travel in this weaker climate," said Angus Gluskie, portfolio manager at White Funds Management.
Mr Dixon voiced confidence in the airline's ability to weather the storm - it had reported a doubling of half-year profits in February - but reacted tersely when asked if trade unions should take the job cuts lying down, given his confidence in the future.
"Our costs have gone up over A$2 billion from year to year and if we do not act, there won't be any unions because there won't be any Qantas," he shot back.
The world's airlines stand to lose more than $6 billion this year if fuel costs remain at current levels, the International Air Transport Association estimated recently.