Qantas Airways to slash 1,000 jobs as it forecasts steep half-year loss
In this Sept. 6, 2012 file photo, a Qantas A-380 takes off in Sydney, Australia. (AP Photo/Rob Griffith)
Published Thursday, December 5, 2013 8:36AM EST
SYDNEY, Australia -- Qantas Airways said Thursday it will slash 1,000 jobs and suffer half-year losses of at least 250 million Australian dollars ($225 million), increasing the likelihood that regulators will throw the flag carrier a lifeline by easing restrictions on foreign ownership.
Lower demand, a strong Australian dollar and steep fuel costs have put pressure on the airline, which warned that conditions are expected to remain volatile next year.
"The challenges we now face are immense, but we will overcome them," CEO Alan Joyce said in a statement. "The Australian international market is the toughest anywhere in the world."
Qantas said it expects to post pre-tax losses of between AU$250 million and AU$300 million for the six months ending Dec. 31.
In a bid to save AU$2 billion over three years, the airline plans to axe at least 1,000 jobs within 12 months, freeze pay for all employees and cut the salaries of Joyce and other executives.
The news sent Qantas stock plummeting, with the price dropping as much as 17 per cent.
A range of measures to help the airline have been considered.
Last month, Australia's Treasurer Joe Hockey suggested the government may need to change rules that currently limit foreign ownership in the airline to 49 per cent.
Earlier this year, Qantas attempted to boost its struggling international division by signing a 10-year partnership with Dubai-based rival Emirates.