Qantas is reportedly planning to slash nearly $1 billion from its struggling international business over the next three years, sparking fears of more job cuts at the airline.
According to the Australian Financial Review, the airline will cut its international cost base by nearly one-third as part of its target to save $2 billion in costs over the next three years.
In a speech earlier this month, the airline’s Chief financial Officer Gareth Evans revealed that “$1 billion or thereabouts” worth of savings would come from its international division.
Of the total $2 billion cost savings target, Qantas plans to cut $800 million by June next year, and the remaining $1.2 billion over the following two financial years.
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The AFR reports that Qantas, including Jetstar, has a total controllable annual cost base of $11.6 billion. Hence, the planned cuts will hit the international division harder than the rest of the business.
The airline, that will deliver its full-year results on August 28, is widely expected to announce an underlying loss of more than $700 million.
There is also speculation that it may offer a partial float of its frequent flyer plan.
Nearly 2200 staff had left Qantas by June 30 as part of its massive restructure that aims to cut 5000 jobs over three years.
Qantas to remain Australian-owned
Last month, the Government abandoned plans for unlimited foreign ownership of the airline and decided that Qantas would remain a majority Australian-owned company.
Opposition Leader Bill Shorten welcomed news that the government adopted a Labor proposal that foreign interests not hold more than a 49 per cent stake in the national carrier.
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The coalition moved legislation to open investment after complaints from the airline about the unfair Qantas Sale Act which limits at 35 per cent a combined holding by foreign airlines and 25 per cent by any single foreign investor.
The Labor proposal removes the lower caps, thus allowing greater but not majority foreign investment.
"Qantas should remain majority Australian-owned and I'm pleased the Abbott government has given in and accepted Labor's proposal," Mr Shorten said.