Qantas – Finding $2B worth of savings

The International Air Transport Association (IATA) is the trade association of Airlines, representing some 240 across the world. Recently IATA published an overview of the 2013 world wide business.

“We saw healthy demand growth in 2013 despite the very difficult economic environment. There was a clear improvement trend over the course of the year which bodes well for 2014. Last year’s demand performance demonstrates the essential and growing role that aviation-enabled connectivity plays in our world. And with system-wide load factors at 79.5% it is also clear that airlines are continuing to drive efficiencies to an ever-higher level,” said Tony Tyler, IATA’s Director General and CEO.

2013 was a good year for most airlines, how good it was for Qantas we will soon find out. Company results are announced in late February. Locally, growth in capacity has been evident as both Qantas and Virgin compete. Qantas is well known for drawing its line in the stand when it comes to market share it wants to defend, but at what cost?

For the past couple of months, its been made clear that Qantas seeks to find two Billion dollars of savings over the next three years, or close to $3M per day. One of our members has heard significant changes will soon be announced in an attempt to start that savings drive:

 ..talking to several of the staff on 2 recent Qantas International flight’s including the Customer Service Managers, they all suggested to me that the 27th February was going to see a big announcement. No one could provide any further information, there was however lots of rumours amongst the staff as to likely news

As many of our members have a vested interest in the future of Qantas, through their accumulation of points, shares or just being their airline of choice, its an interesting topic guessing what will happen. What routes will be cut? How many staff face an uncertain future? Will the Frequent Flyer Scheme be sold off? Will Qantas be sold to Emirates or Jetstar take over?

Sadly, everything is not always possible, thanks to the Qantas Sale Act limiting what can be done. Emirates have also said they are not interested in an equity injection if they could. Clearly big changes are ahead that will effect all who fly in Australia with Qantas and even their competition.

For some of our members who are used to Qantas and its full service niche, the thought of Jetstar taking over more routes is a painful one. The announcement last week of Emirates and Jetstar codesharing and having a frequent flyer partnership strengthens that possibility.

Others lament the possibility that Manila, Jakarta and Noumea may well cease to be destinations for the Red Roo. Some feel there are more aircraft order changes, after all there are more A380s on order. In the meantime Qantas needs to give back the jet base soon, and is exploring the possibility of selling their terminal leases.

What do you think will happen, and how will it affect you fly the Spirit of Australia in the Future? Share your opinion HERE.

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