Qantas fans flying the kangaroo route to London can rest easy for now.
The carrier today announced no major changes to its A380 European operation, despite mounting speculation that either one or both routes would be dropped in a bid to reduce losses.
Today’s budget announcement in Sydney revealed that only one route will be axed, that linking Perth with Singapore.
While two other Singapore services, those operating out of Sydney and Brisbane, will be downgraded from B747s to smaller and more fuel-efficient A330s.
Faced with heavy losses (in the first half year, the airline was AU$252 million in the red), Qantas is being forced to make savings of AU$2 billion over the next three years.
The other changes include:
- 5,000 job cuts (including 1,500 from senior management)
- Early retirement of six B747s starting next year. This would leave Qantas with a fleet of nine B747s with updated interiors
- Retire all B767s by 2015
- Defer delivery of eight A380s. Make maximum use of existing 12 A380s
- Defer delivery of three Jetstar B787 Dreamliners
- Retime the Melbourne-Dubai-London flight so that the A380 spends less time on the ground at Heathrow
- Suspend growth of Jetstar Asia in Singapore amid fierce competition from other budget carriers.
The problem that Qantas finds itself in is an overly high cost base (Qantas’ staff costs are reckoned to be twice as high as those at Emirates and SIA) and ever greater competition in its home market.
CEO Alan Joyce said: “Qantas’ competitors have increased capacity to Australia by 46 per cent since 2009, more than double the world average at a time of record fuel costs and economic volatility.”
What will be surprising to regular travellers and the many readers is that Qantas has spared its two A380 London routes from Sydney and Melbourne.
All that will happen is that the Melbourne flight will be retimed from this November to achieve better utilisation. No schedule details are currently available.
So one wonders how long either, or both, London routes will be spared from cuts judging by passenger and reader feedback suggesting poor loads on the Dubai-London-Dubai sectors.
For more details of Qantas’ London operation, see this news piece from last week.