Qantas accelerates cost cuts due to looming $1.5 billion loss

Qantas accelerates cost reductions due to an impending loss of $ 1.5 billion

Qantas has announced new cost-cutting measures to deal with the effects of the coronavirus pandemic. The Australian airline also announced it would report an annual pre-tax loss of more than $ 1.5 billion (A $ 2 billion, £ 1.1 billion).

Qantas said its international division was losing about $ 2.3 million a week, compared to $ 3.9 million last month. Recent cost-cutting plans include a two-year wage freeze, a reduction in travel agent commissions for international flights and voluntary layoffs for cabin crew in its international business.

Regardless, the parent company of rival Singapore Airlines posted a record annual loss of S $ 4.27 billion (S $ 3.2 billion) on Wednesday – worse than the average forecast of S $ 3.27 billion forecast by eight analysts According to a Reuters report.

“The fact that we are entering into the debt we needed to overcome this crisis shows that the business is now on more sustainable foundations,” said Alan Joyce, chief executive of Qantas, in a statement.

“The main driver is the upturn in domestic travel, which will now be greater than before COVID, at least until international borders are reopened.” Qantas added that the international division lost about $ 2.3 million per week, compared to $ 3.9 million last month, due to the opening of a travel bubble with New Zealand and robust demand for freight services.

Separately on Wednesday, the owner of Singapore’s national airline announced the largest loss in its 74-year history. The $ 3.2 billion loss was far greater than the $ 159 million loss last year, the first time the company went into the red.

The company also announced a $ 4.65 billion bond sale to bolster its finances in the face of the Covid-19 crisis. Singapore Airlines, which has no domestic market, was one of the hardest hit airlines in the world during the pandemic, alongside Hong Kong-based rivals Cathay Pacific. On Monday, a planned travel bubble between Hong Kong and Singapore was postponed for a second time after a surge in cases in Singapore.

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