Alan JOyce reveals huge QANTAS  loss. Photo: www.new.com.au

Alan JOyce reveals huge QANTAS loss. Photo: www.new.com.au

QANTAS is set to announce plans to cut 5000 jobs over the next three years as it seeks to restructure its business. QANTAS profits have been nosediving for the last five years with nothing the beleaguered management trying able to pull it out.

On Thursday the company will release its full-year results. Analysts are forecasting a loss exceeding $750 million, with a bottom-line loss of more than $1 billion.

Analysts like David Fraser, of Shaw Stockbroking, believe QANTAS will have to axe closer to 7000 jobs if they have any hopes of stemming the flow of profits.. “Until we see the details of the result it’s pretty hard to work out what they’re going to do going forward, but I suggest that the international operations are going to continue to be impacted,” said Mr Fraser.

Neil Hansford, formerly an executive with Ansett, believes QANTAS is accumulating debt to the tune of $800 million a year. He also believes that without the domestic arm of the business this would be much worse.

Because of this he questions the need for such heavy job cuts; instead placing blame for the losses on ‘poor fleet management’ and unprofitable sales routes. QANTAS, like Ansett, has too many different types of aircraft. So many different types of aircraft require the sourcing, storing and maintenance of different equipment, the expense of training pilots and mechanics for different aircraft, and the logistical problems attendant upon which craft can do which routes. “Ansett’s biggest failing was it had to many aircraft types,” he said. “There’s only one place for a 747, and that’s in the desert being broken up.”

Mr Hanford went on to say it would be in the financial interests of QANTAS to cut back on its international flights and concentrate on domestic business. QANTAS already enjoys a 60% of the domestic market.

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