It had expected to receive 17 of the long range, fuel efficient, aircraft by June 2016 before the order was restructured. “They could have downsized from the 747-400s, had more range than the gas guzzling A330s and still been able to service US destinations with a better load factor and yield on the 787s while cutting fuel costs by about 22 per cent on each 787 revenue flight,” Mr Ahmad said.
The target of cutting $1 billion in costs from the international division has led to speculation that the airline is planning further route changes and the possibility of offering more redundancies for pilots, flight attendants and engineers - even though those workforces have already shrunk in recent months.
CAPA Centre for Aviation executive chairman Peter Harbison said he would expect Qantas to cut international routes where the net revenue is lowest or negative. “You’d have to think Singapore is rocky at best, with so much capacity still in there, and [Perth-Singapore] has already come off,” he said. “South Africa, without the South African Airways partnership [which dissolved this year] is also questionable.
In February, Qantas deferred aircraft orders, speeded up its aircraft retirement plans and announced some major changes to routes, including that it would no longer offer year-round international services from Perth.
CBA analyst Matt Crowe said only about one-quarter of Qantas’s total $2 billion cost savings program had been detailed to date. “International seems to be where they have the biggest cost disadvantage to their competitors,” he said.
Announcements could include a decision on the partial sale of its $2. 5 billion frequent flyer division, and news on whether the airline could split its domestic and international businesses to attract more foreign investment.
Qantas’ plans for drastic cost cutting in its ailing international division are not expected to include job losses over and above the 5000 positions it has already earmarked to go.
Read more here: SMH