Qantas to further cut capacity, profit forecast

SYDNEY – Qantas said today it would further cut capacity as the global financial crisis continues to affect passenger demand.

Qantas’ chief executive officer, Geoff Dixon, said that in addition to capacity cuts announced earlier this year, Qantas would reduce capacity equivalent to grounding 10 aircraft.

Dixon said that as a result of slower demand, Qantas now expects its profit before tax for the 2008/09 financial year to be around A$500 million (around US$322 million).

The CEO said the current economic downturn had principally affected Qantas' mainline international operations.

Dixon said Qantas would manage the capacity cuts by not taking up the planned lease of two A330-200 aircraft; changing the flying patterns of existing aircraft to free up the equivalent of six B747-400s, three B767-300s and one A320-200 aircraft between now and mid-2010; and halting all planned domestic market growth for Qantas and Jetstar.

He also said Qantas would not be increasing its previously announced reduction of 1,500 jobs.

Qantas’ chief executive officer designate, Alan Joyce, said Qantas will continue to maintain a strong liquidity position in terms of cash and stand-by facilities; seek further profitable flying opportunities, such as the non-stop Sydney-Buenos Aires services which commenced yesterday; and take delivery of a further two A380 aircraft in December and commence A380 services to London via Singapore in January.