Qantas shares plunge after shock profit warning as company signals 'immense' challenges ahead
Qantas has set out drastic plans to axe 1,000 jobs, freeze pay, stop bonuses, and cut the salaries of its boss and board members, after the Australian airline issued a profit warning and warned that it faces “immense” challenges.
The flag-carrier also criticised what it claims is unfair competition from Sir Richard Branson’s Virgin Australia.
As Qantas warned it will post half-year losses of up to A$300m (£166m) for the second half of this year, chief executive Alan Joyce complained: “Since early 2012, there has been an unprecedented distortion of the Australian domestic market, with Virgin Australia’s strategy to seek majority ownership and massive financial backing from foreign government-owned airlines.”
Virgin Australia’s three major shareholders include Air New Zealand (53 per cent-owned by the New Zealand government), Singapore Airlines (also majority-owned by a state investment company) and Etihad (fully owned by the government of the United Arab Emirates).
They injected A$300m into the airline last month to accelerate growth, which Joyce said was “designed to weaken Qantas”.
He added: “This foreign government capital has been used to finance dramatic increases in domestic capacity, with profound implications for the future of Australia’s aviation industry. ”
Current Australian ownership rules limit total foreign holding of Qantas to 49 per cent, with foreign airlines allowed to own just 35 per cent. Qantas claims those rules have damaged its growth.
Just this week, however, Branson claimed: “If Qantas were better managed and offered the public a decent service it would not now be in the financial mess it claims it is. It seems strange to me that a Liberal government would even consider tilting the playing field once again in Qantas’s favour.”
- 1 Mario Balotelli: Staff at arson-hit Manchester Dogs' Home convinced Liverpool striker is behind five-figure donation
- 2 Friends 20th anniversary: Alison Jackson photographs reunited cast
- 3 There is literally not a single woman in this iPhone 6 queue
- 4 Hitler’s former food taster reveals the horrors of the Wolf’s Lair
- 5 Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
Scottish independence referendum: Frankie Boyle reacts to nation's 'No' vote - 'To be fair, I've always hated Scotland'
Scottish independence live: Scotland gives a clear 'No' in historic referendum - as it happened
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...