Qantas Airways Australia’s largest carrier, forecast its biggest second-half loss in at least a decade and will cut 1,750 jobs as demand for business and first-class travel falls.
Shares dropped as much as 11 per cent, the most in two months in Sydney. The carrier may have a pretax loss of as much as $A188 million ($137 million), according to figures derived from the airline’s full-year forecast today.
The job cuts, equivalent to about 5 per cent of the workforce, are the deepest since chief executive Officer Alan Joyce took over five months ago.
The Sydney-based airline also became the latest carrier to defer delivery of the Airbus SAS A380 in response to a global drop in premium travel since the collapse of Lehman Brothers Holdings last year.
“Qantas is stuck at the end of the world and there’s not a lot of traffic because of their location,” said Jim Eckes, managing director of industry adviser Indoswiss Aviation.
“So when there’s a downturn and everyone catches a cold, Qantas get pneumonia. They have to take serious steps to get their house in order.”
The carrier will post full-year pretax profit of between A$100 million and A$200 million, down from a previous estimate of A$500 million, it said in a statement to the Australian stock exchange today. In the six months ended December, it had a pretax profit of $A288 million.
Joyce confirmed the airline will have a loss.
The carrier will ground the equivalent of 10 aircraft, reducing flying capacity 5 per cent, Qantas said.
The company will also defer orders for four A380s, the world’s largest commercial aircraft, and twelve Boeing 737-800 aircraft, it said.
Air France-KLM and Kingfisher Airlines have already deferred deliveries of the A380.