Qantas, the Australian national flag carrier has recently reported a fall in annual net profits of nearly 4.5 percent for the period June 2009 to June 2010. It made 112 million Australian dollars (£64m) during the year, compared to A$ 117 million in the previous period. Sales revenue fell by A$ 13.8 billion in the year. Citing increased competition and lower ticket prices on both domestic and international routes, the disruption caused by the Icelandic volcano and on going caution by travellers due to the recession, the airline has said it remains cautiously optimistic about future growth prospects.
Commenting on the results, Alan Joyce, Qantas CEO said:
‘There is evidence of some recovery in the demand for leisure and premium class airline seats and forecasts for the next 6 month period look materially better.’
Meanwhile, Japan Airlines (JAL), a member of the ‘One World Alliance’ consortium, which includes Cathay Pacific, Qantas, BA and American Airlines, and which was baled out by the Japanese government earlier in the year when it filed for bankruptcy protection, has announced details of a major restructuring programme.
As part of its response to the current situation, JAL is to cut up to 16 thousand jobs, reducing its workforce from 48 to 32 thousand by the end of the current financial year. The restructuring plan also proposes to slash it fleet by 40 percent (103 aircraft) and rationalise its route structure by closing a number of low density international and domestic routes.
Whilst some of the staff reductions will be brought about by early retirements and the sale of subsidiary operations, it seems clear that troubled JAL is not going to have an easy time over the next year or so. A company spokesman said that the proposed actions were intended to allow the airline to ‘rehabilitate quickly and these measures will allow the JAL Group to become profitable from the first fiscal year of the plan.’
When JAL filed for protection on January 19, 2010, it represented one of Japan’s biggest ever corporate failures to date, with debts of $25 billion.
