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Qantas job cuts add to woes
By Geoff Hiscock, CNN Asia Business Editor
SYDNEY, Australia (CNN) -- Australian carrier Qantas Airways said Wednesday it is cutting 1,400 jobs as passenger numbers tumble in response to the war in Iraq and the SARS disease. It said it will make 1,000 employees redundant by June 30, and will also eliminate another 400 jobs by not filling vacancies. A further 300 jobs will be converted from part-time to full-time. Qantas CEO Geoff Dixon said he regretted the need for the action, but claimed it was vital for the airline to move quickly to protect its position in a "very competitive and difficult industry". The drastic cutbacks by Qantas follows Tuesday's revelation by Hong Kong-based Cathay Pacific that it is facing "its most dangerous time" commercially in a quarter-century, and a decision by Singapore Airlines to defer looking at possible aircraft orders. Qantas, Cathay Pacific and Singapore Airlines are among the most profitable carriers in the Asia Pacific and are regarded as being better placed than most to withstand the passenger downturn. Cathay Pacific announced a record 2002 net profit of $511 million in early March, while on February 19 Qantas reported a better than expected profit of $208 million for the half-year to December. Last October, Singapore Airlines said its first-half profit to September 2002 was $434 million. Airlines across the region have been hit hard by the twin impacts of the Iraq conflict and the pneumonia epidemic known as Severe Acute Respiratory Syndrome (SARS), which has caused more than 100 deaths worldwide. ( SARS latest) Because of its exposure to SARS -- thought to have originated in the neighboring south China province of Guangdong -- Hong Kong has seen massive declines for its transport and tourism industries. Many flights to and from Hong Kong have been canceled in the past month, and passenger traffic has been cut in half. Cathay Pacific CEO David Turnbull said in a newsletter to staff that the airline planned to cut services by a quarter from next week, but that this was likely to rise to a third. Singapore Airlines said Tuesday it had told Boeing and Airbus it was deferring looking at new aircraft orders. It has already cut services by 14 percent because of weak passenger demand. On March 28 Qantas said it would reduce international flights by around 20 percent between April and mid-July. Japan Airline System (JAL), All Nippon Airways, Korean Air, China Air, EVA Airways, Thai Airways, Malaysian Airlines, Air New Zealand and Indonesia's Garuda are among other Asia Pacific carriers to cut services because of SARS, the war in Iraq and the general decline in economic conditions. Carriers from Europe and North America have also cut services to Asia because of SARS, with airline industry analysts now saying the disease will have a bigger impact than Iraq. Qantas' Dixon said Wednesday that the global aviation industry was under "severe strain", noting that 400,000 jobs had been shed between September 2001 and the start of the war in Iraq. He said thousands more jobs were being cut worldwide, following the outbreak of the war and the SARS disease. Shares in Qantas are 3.75 percent lower at midday in Australia Wednesday, trading at A$3.08. The broader market is down 0.44 percent.
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