Australia’s biggest airline, Qantas, has responded to soaring fuel prices by saying it will cut 4% of its workforce, with 1,500 of its 36,000 workers losing their jobs. It has also scrapped plans to hire another 1,200 people and slashed its growth forecast for the current financial year from 8% to nil.
Qantas Chief Executive Geoff Dixon said that to survive airlines will have to merge and become stronger: “The more the circumstances of the industry changes, or they change in particularly with oil the more the idea of consolidation will become a reality. The airline industry has to consolidate and it’s a distorted industry, too much government ownership, too much subsidisation and not enough of what I’d call mergers.”
In the last three months Qantas has twice raised its fares and also reduced the number of its flights on two occasions.
The world’s airlines will lose as much as four billion euros this year if oil prices remain at current levels, according to a recent estimate by the International Air Transport Association.