Qantas to Exit Markets, Cut Capacity and Close Pilot Base

Following last week’s announcement of significant changes to its domestic operations, the Qantas Group has now confirmed changes to its international services as it continues to manage the impact of high oil prices.

The changes include market exits, capacity cuts and the replacement of Qantas services with Jetstar services on a number of routes.

The Chief Executive Officer of Qantas, Mr Geoff Dixon, said, “We have to look closely at each individual market, including the number of frequencies we operate and which of our flying businesses is better suited to serve those destinations.”

Japan and South East Asia will be the most affected markets by the schedule changes.

“The Japan-Far North Queensland market has also been particularly difficult for Qantas for a number of years. At current fuel prices, the group would lose more than $100 million operating to Japan under our existing schedule,” Mr Dixon said.

The changes to the Japan schedule include:

- the withdrawal of Qantas’ thrice-weekly Melbourne-Tokyo (Narita) A330 return services from September 2008;

- a reduction in Qantas’ Sydney-Tokyo (Narita) A330 return services from nine to seven return services per week from September 2008; 

- Jetstar’s withdrawal from the Cairns-Osaka-Nagoya route from December 2008;

- the replacement of Qantas’ 14 weekly Boeing 767 Cairns-Tokyo (Narita) services with a daily Jetstar non-stop Airbus A330 two-class service from December 2008; and

- the introduction of new Gold Coast-Tokyo (Narita) services five times per week, operated by Jetstar with two-class A330s from December 2008, in addition to Jetstar’s daily Sydney-Gold Coast-Osaka services.

Under the new schedules, the Qantas Group will still offer more than 11,500 seats per week – between Japan and Queensland.

To support the schedule changes, Jetstar will need to free up Airbus A330 aircraft and, as a result, will:

- withdraw from its Sydney-Kuala Lumpur operation to make available an A330 aircraft; and

- replace its existing three weekly A330 services that operated between Sydney and Ho Chi Minh City with five A320 return services on the new route of Sydney-Darwin-Ho Chi Minh City from September 2008.

Jetstar will also replace Qantas on:

- the Perth-Denpasar route, with up to four Jetstar A320 services taking over from Qantas’ Boeing 737-800 services from December 2008; and

- Perth-Jakarta, with three Jetstar A320 return services per week replacing the existing three Qantas B737-800 services from December 2008.

Qantas will also close its pilot base in Cairns, with around 40 Cairns-based pilots returning to Sydney or other bases.

“Qantas will maintain its existing cabin crew base in Cairns to service domestic operations, and Jetstar will establish a new base for pilots and cabin crew in Perth from October,” Mr Dixon said.

As a result of the international schedule changes, a number of job losses in Cairns and Japan is expected. These were in addition to those flagged in last week's announcement, which were expected to be in the low hundreds, and would also be managed initially on a voluntary basis.

In addition to the Asian flight changes, Qantas will reduce its Boeing 747-400 Sydney-Los Angeles services from 17 to 15 per week, following the commencement of A380 flights on the route at the end of the year.

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