Qantas raises profits but to cut staff for big fuel bills

| August 18, 2005 | 0 Comments
Qantas raises profits but to cut staff for big fuel bills

Even though Qantas announced Thursday that it had an unexpectedly high 18 percent rise in profits in the first half of 2005, it also said that it will cut jobs and raise fuel levies on tickets next year to compensate for the rise in fuel prices.

There was no announcement of how many of its 38,000 workers mightlose their jobs, but it was estimated that fuel levies would rise by A$10 to A$20 per journey leg.

Qantas said that 30 percent of their operating costs next year would go to buying fuel, while last year that was only 19 percent of costs.

The airline reported an after-tax profit to June 30 of A$763.6 million, A$155.2 million higher than the same period last year, but it expects to pay A$1.2 billion for fuel alone next year.

Chief financial officer Peter Gregg justified the job cuts and higher fuel levies by saying that the airline couldn’t be expected to absorb the higher fuel prices.

Meanwhile, Virgin Blue announced Thursday that it was reducing its profit estimate for 2004-2005 to between A$90 million and A$100 million, down from A$159 million last year. It also blamed the reduction on climbing fuel prices, saying that its fuel bill next year will be A$150 million higher than it was this year.

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