Qantas could last only six months, expert warnsArticle from Daily Telegraph By Andrew Carswell
April 16, 2009 12:00am
QANTAS will no longer exist in its current form if the downturn that is crippling the industry lasts another six months, one of Australia's leading aviation experts has claimed.
Centre for Asia-Pacific Aviation director Peter Harbison said that a currently unprofitable Qantas faces being gutted and reconstructed around a more profitable Jetstar model.
He also told The Daily Telegraph yesterday that the 3300 jobs already axed at the airline would be easily superceded in the coming months if conditions did not improve.
The airline confirmed on Tuesday it was currently losing money and was likely to chalk up a loss of up to $180 million in the first six months of 2009.
To help stem further losses, it also announced a 5 per cent reduction in capacity, the axing of a further 1750 frontline staff and senior managers, grounding of 10 aircraft and multiple delays of new aircraft on order.
Qantas blamed a dramatic fall in international travel for its unglamorous slide into the red. Its bottom line is also being decimated by a cut-throat airfares war that has had ticket prices fall to unprecedented levels.
Those levels simply can't be sustained, Mr Harbison said.
"If this environment continues, we basically have an unprofitable Qantas airline that doesn't have a future.
"Even if we stay at the same level for six months, they really have to look at ripping the airline apart and doing something dramatically different.
"There will definitely be a lot more jobs cuts but, more than that, the whole structure of the company will have to change."
Contrarily, Qantas' budget carrier Jetstar continues to trade positively, largely due to its slim cost base and appeal to budget-conscious travellers.
Mr Harbison said Qantas would not have made it through the current recession if it had not launched Jetstar in 2005 to counter Virgin Blue.
While Qantas management expressed confidence in the airline's future, its boss Alan Joyce seemed to echo those sentiments yesterday
He told Business Spectator it was Qantas' broad portfolio - namely Jetstar and the performing Qantas Frequent Flyer program - that was aiding its survival.