When AJ came out to talk about the 1750 slashings, he said something very important:
he says that this is contingent on the fact that the next 6 months would see the world economy improves from what it is right now.
Well. since AJ made that announcement, The prime minister and Reserve bank have both stated the country is yes, in recession.
And the International Monetary Fund ( financial gurus not to be underestimated) have also reported that world debt is now over 5 trillion dollars Aus.
The obama administration had also came out to say that those toxic assets and bank debts still won't go away and will not go away for quite some time. This means credit flow will be clogged. With the imminent collapse of the American motor industry, more bad news to come. United Airlines is also bleeding bad and have cut fares, even on the pacific route.
So there you go, the bright economic outlook in the next 6 months.
I do think the next 6 months will be far worse for traveling, tourism, recreational industry as more firms sack people and output shrinks.
Japan would contract 6% in output, Britain and most of Europe will sink even deeper into recession mud.
The IMF also said that it is a watch and see thing, meaning the Obama admin. bailing out all these failed firms may not work at all, and in that case, it would be far worse then not bailing them out at all because tax payers are now burdened with such high debts.
According to IMF,
Economies will shrink accordingly:
US 2.8%
UK 4.1%
Japan over 6%
Aus unemployment to go over 7.8%
This is all very very scary news for Qantas.
Qantas does need to cut costs at all; cost or it will simply go bust.
This has nothing to do with media scare, it is a fact what IMF reports.
And IMF has revised their forecast further down than what it did last.
All the important markets on Qantas routes (Asia USA UK )are all showing no signs of any improvement whatsoever.
Corporate travel has decreased significantly and will continue to go further down as every country have rising unemployment. Private travel is confined to a weekedn drive to the blue mountains only.
It does not matter if air fares have fallen, travelling is a very expensive exercise, especially overseas, currency Xchange rates, accomodations, food, shopping, all unneccessary spendings that can be cut completely from any household.
Supermarkets and landlords are the only business making lotsa monsy at the moment. Peeps are even cutting their consumption of lattes from cafes.
not good.
Dun and Bradstreet Australia had also come out to say that 150,000 businesses in Australia will fail because they cannot pay their bills. And banks not willing to lend to businesses. All these cannot be good for Qantas despite their little 2 point something billion in the piggy bank, constantly using that as an ammunition.