Qantas Ramps Up Cost-Saving Measures, Pushes Back Plane Procurements
No new planes will be added to Qantas Airways' existing fleet as the company embarked on saving measures that will push back the scheduled deliveries of eight Airbus A380s to 2019 at the latest.
In a statement issued on Friday, Qantas Chief Executive Alan Joyce admitted "we are acting decisively now to position ourselves for strong, sustainable growth over the long-term."
"With 12 A380s now in service and our Boeing 747 reconfiguration program well underway, we have made the financially prudent decision to reschedule a further two A380 deliveries - enabling significant capital expenditure savings," Mr Joyce was quoted by Business Day as saying.
The adjustments will see Qantas postponing the delivery of two A380s next year, which instead will be received by the company on 2016-2017.
Another batch of six additional aircraft, also A380s, will not be rolled into Qantas' plane hangar until 2019, the company said.
The rescheduling will enable Qantas to keep another $400 million as savings, on top of the projected $500 million that the national carrier said it will take away from its expenditures list.
Bringing all the cuts together, Qantas is poised to realise total savings of about $1.9 billion, which Mr Joyce said will be reflected by the company's financial result for the next financial year.
"We are in a good position to reduce capital expenditure, targeting investment at business areas that deliver sustainable returns while maintaining flexibility in forward fleet commitments," the Qantas chief said.
He added that the move was in line with Qantas' disciplined capital management but with increased commitment "to build on our strong domestic business, enhance Qantas Frequent Flyer, turn around Qantas International and grow Jetstar in Asia."
Qantas is also on-track to rationalise its overall operations - its domestic and international flights plus its budget subsidiary and alliance agreements with other airlines - that hopefully would properly set up the firm with the ongoing global economic developments and the upward spiralling jet fuel costs, Mr Joyce said.
The company is also geared to take advantage of opportunities that its global presence has so far presented, specifically its Australian and Asian operations, the Qantas CEO said.
Mr Joyce is bent on keeping Qantas' 65 per cent dominance in the domestic market by luring more business travellers with its offerings of spacious planes - Airbus' A330s and Boeing's 747-400s - for corporate passengers frequently flying within Australia.
Also, planned renovations on Qantas' passenger lounges in Melbourne and Sydney should be underway soon to provide more comfort to travellers opting to avail of the company's services, which Mr Joyce said will be coupled with exclusive promos such as Qantas Chairman's Lounge.
All these efforts were aimed to thwart efforts by Qantas' chief local rival, Virgin Australia, to chip away considerable shares from the company's existing customer base, Mr Joyce said.