Australian-based carrier Qantas Airways has been in competition with its market rival Virgin Australia for a while, and now the 'Flying Kangaroo' is cutting 5,000 jobs in a $2 billion cost-cutting move.
Qantas CEO Alan Joyce announced Wednesday the airline will be cutting 5,000 positions over the next three years. Joyce called their recent financial losses "an unacceptable and unsustainable result."
He added the airline would put up for sale or suspend the order of 50 planes they are trying to cope with $2 billion in savings by 2017.
In his statement, Joyce said the airline is facing "some of the toughest conditions...it has ever seen" right now and, as a result, they needed to take actions to cope with changes in the Australian aviation industry.
The cuts were announced together with their pre-tax loss announcement of $252m for the six months to the end of December.
The cut will be with 1,500 from management and nonoperational roles. Joyce gave in a statement, "We have already made tough decisions and nobody should doubt that there are more ahead."
In line with the reduction, Joyce put some blame on Virgin Australia, the airline having increased its flights since 2011. He says that this placed that carrier on the advantage of an "uneven playing field."
Joyce added, "The Australian domestic market has been distorted by current Australian aviation policy."
Over the years, Qantas has been trying to get financial support from the Australian government. He feels rules of limiting foreign ownership of the airline to 49% should be more flexible to encourage overseas investment.
The CEO told investors that Qantas already lost $252 million Australian in six months. According to their company website, Qantas currently has 33,000 people employed, 93% of which are based in Australia.
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