Australia's Qantas Airways plans to axe capacity and management jobs and retire some aircraft early under cost-cutting measures aimed at offsetting soaring fuel prices and the impact of natural disasters in Japan, New Zealand and Australia.
Qantas shares rose almost 2 percent after the airline announced a string of cost cuts, including the suspension of some services from Australia to Japan and New Zealand.
Chief executive Alan Joyce said he was reviewing the airline's manpower costs with the aim of cutting management headcount and annual and long-service leave balances.
We want to limit redundancies wherever possible and will be using a range of initiatives to manage the reduction in capacity including annual and long service leave. At this stage only management positions will be made redundant, Joyce said in a statement.
Qantas shares were trading 1.9 percent firmer at A$2.19 shortly after the market opened. Some investors had been expecting an earnings downgrade after rival Virgin Blue cut its forecasts a week earlier.
Qantas did not give full-year earnings guidance but said a string of recent natural disasters would impact its underlying pretax earnings by about A$140 million ($144 million)in the second-half of the financial year ending June 30, 2011.
This included a A$45 million impact from the Japan earthquake and tsunami, A$60 million from flooding in Australia's Queensland state, A$20 million from cyclones in Queensland and A$15 million from last month's earthquake in New Zealand.
Qantas said it planned to cut domestic capacity growth in the second-half of the current financial year from 14 percent to 8 percent and international capacity growth from 10 percent to 7 percent.
Qantas and other airlines globally have been raising fares and introducing fuel surcharges to try and offset rising oil prices.
($1 = 0.972 Australian Dollars)
(Reporting by Michael Smith; Editing by Ed Davies)