Qantas releases details of $2bn cost reduction program

Qantas will take action to permanently reduce costs in all parts of the Qantas Group through to FY17, including fleet and network changes, productivity improvements, consolidation of business activities, new technology and procurement savings. More than 50 aircraft will be deferred or sold and the Group’s workforce will be reduced by 5,000 full-time equivalent positions by FY17. The Qantas Group’s planned capital expenditure net of operating lease liability will be reduced to $800m in both FY15 and FY16, a total reduction of $1bn. Qantas has reached agreement on the return of its Brisbane Airport terminal lease, together with related assets, to the airport owner at a cash value of $112m. The broader structural review of the Qantas Group portfolio continues and no final decisions have been made on other assets. Qantas reported an underlying PBT loss of $252m and a statutory loss after tax of $235m for the six months ended 31 December 2013.