Fuel pricing pressure continues to hurt Qantas

Friday, 03 May, 2006 0

Qantas has stated that it will need to ramp up it’s cost saving endeavours to cope with the increasing pressure from escalating world oil proces.

While initially targeting $3 billion in savings by 2008, analysts now estimate the carrier will need to shave at least another $250 million from the bottom line.

Chief financial officer Peter Gregg admitted the “Sustainable Future” program target was inadequate and refused to rule out fare rises in addition to recently announced fuel surcharge increases of up to $23 per sector that take effect from Friday.

Mr Gregg said labour and fuel now accounted for 60 per cent of Qantas’s expenses and the higher fuel bill meant responses other than cost-cutting were limited. “We’re in new territory now,” he said.

“Inflation’s moved a little bit. Clearly, at these fuel prices – fuel is $1 billion higher in 2007 than it was in 2006 – you have to make changes.

“The targets we set ourselves for Sustainable Future won’t be large enough.”

Mr Gregg said that the new round of cost cuts should not be seen as an attack on workers.

“This is an attack on a cost base that makes the business inefficient, and we have to make it efficient if we are to survive,” he said. “And the great bulk of Qantas workers have got jobs because (we) have pursued an efficiency drive over a period time.”

He said there was a combination of events – potentially rising interest rates, increasing fuel prices and higher living costs – that had to be watched closely.

Qantas could reduce capacity if demand fell but that “would be pretty extreme at this stage”.

Graham Muldoon

We work with reliable data providers with global coverage, that guarantee data representativeness as well as compliance with International Personal...

Located in the heart of the Northeast and within easy driving distance of a third of the population of the...

The State of Michigan is blessed with the riches of unspoiled nature: the nation’s longest freshwater coastline, lakes that feel like...

From the beginning, ATI’s philosophy has been “innovation, not duplication.“ Developing specialized technology solutions to connect over 30,000 accommodation, attracti...

Central Florida’s Polk County is conveniently located between Orlando and Tampa, and an easy drive to Central Florida attractions and...

ECOMMPAY is an international payment service provider and direct bank card acquirer, engineering bespoke payment solutions for clients worldwide. Our...

Since 1932, P&O Cruises has offered Aussies and Kiwis the opportunity to take to the seas and have the holiday...

Princess Hotels & Resorts is a hotel chain specialising in holiday and urban hotels located in first class tourist destinations,...

Queensland – where it’s rude not to stare Here in Queensland, there’s plenty to do. But there’s even more to...

In 2019, Buffalo Tours and Olympus Tours joined the Flight Centre Travel Group (FCTG) family and formed Discova. With the...

Atout France guides and supports the French regions with their development strategy and helps set up investment projects in order...

Blue Diamond Resorts consistently goes above and beyond guest expectations by delivering groundbreaking vacation experiences through our exceptional collection of...

Our Mission Ecommerce has transformative powers, and we believe everyone should be able to take part. But outdated solutions and...

MGM Resorts International (NYSE: MGM) is an S&P 500® global entertainment company with national and international locations featuring best-in-class hotels...