Australia’s airline troubles

The Flying Kangaroo has, for years, been an Australian icon. Qantas has always been renowned for its big-budget international marketing campaigns, and is arguably best-known as the brand that co-oped ‘I Still Call Australia Home’ with a choir of youngsters and some sweeping landscape shots. It’s Australia’s national carrier, and can be fairly described as a ‘pretty big deal’ in Oz.

qantas-joyceThe airline’s reputation – and its financial state – has taken a turn for the worse domestically, though, with an announcement this week that the brand will cut 5000 jobs as part of a $2 billion cost reduction program.  Qantas registered a $252 million half-year loss, though Jetstar remains profitable. Qantas’ share price plummeted following CEO Alan Joyce’s announcement.

The Federal Government has also made clear that it is looking at altering the Qantas Sale Act, which prevents the airline from being majority-owned by foreign investors. It is hoped that this measure may aid the fortunes of Qantas, though Joyce does not believe it will be enough to save the brand.

Virgin founder Richard Branson has described Qantas as being in “deep shit” – a label that’s probably fairly accurate. While Qantas’ news is bad enough, though, the state of Australia’s airline sector was further damaged by Virgin Australia’s announcement today that it experienced an $83.7 million loss for the half-year ending December 31, 2013.

It is unknown how (if at all) these figures will impact travelers. The program announced by Qantas makes no mention of altering ticket prices, though certain particularly-unprofitable routes will be cut. Obviously Qantas and Virgin Australia aren’t the only airlines patrons can use. They are two of the most high-profile, though, and it is thought that their financial declarations could be indicative of a general turn for the worse in the industry.

At the end of the day, travelers will still be able to get from A to B. Just don’t be too surprised if your flight attendant appears a little more stressed than usual. They could be in serious danger of losing their job.

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