Qantas heads for losses, Air NZ revives
April 23rd, 2009
Are Qantas and Air NZ competing in the same air space? The Australian airline is cutting 1,750 jobs and capacity and deferring aircraft deliveries as it heads for a record second-half loss. Its NZ rival reckons its second-half financial performance will improve, albeit from a low base in the first half. Qantas is immediately grounding up to 10 aircraft and has negotiated to delay delivery of four Airbus A380s by up to 12 months and 12 Boeing 737-800s by an average 14 months. Air NZ, with only two aircraft on order through FY 2009, has been trimming capacity more modestly.
The International Air Transport Association estimates carriers in the Asia-Pacific region will post combined losses of US$1.7bn this year as the economic downturn cuts passenger and freight demand at Qantas, Hong Kong’s Cathay Pacific and Singapore Airlines.
Air NZ claims a strategic advantage in being smaller and nimbler than its rivals on long-haul routes and across the Tasman. Air NZ is this week taking the battle to rival Qantas with a $2.5m campaign to encourage Australians to visit. Air NZ’s relatively more comfortable position is largely about timing. It embarked on its $2bn fleet upgrade in 2004, with expenditure peaking in 2006, before the credit crisis began. CEO Rob Fyfe says the carrier “is in one of the strongest positions to weather the current economic climate.”
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