Australia’s Qantas Airways yesterday said it was axing first class from all but a handful of routes in a post-financial crisis overhaul, as half-year profit slumped 72 percent to US$52 million.
Chief executive Alan Joyce said passengers would only be able to fly first class between Australia and London, via Singapore, and between Australia and Los Angeles after demand dropped dramatically in the wake of the downturn.
“Our first class product will remain on key routes,” he told reporters. “It’s a re-balance — there are more business class seats and less first class seats.”
The flag-carrier will reconfigure 29 aircraft and upgrade some planes’ in-flight entertainment at a cost of A$400 million (US$360 million), leaving first class on just 12 Airbus A380s.
“The reconfiguration is driven by the longer-term trend of what we believe is happening in demand,” Joyce said.
“The long-term trend in first class has been for a decline. Our seat factor [load] in first class has been below 40 percent, so we have plenty of room to cope with all expected future demand,” he added.
The first-half announcement, and failure to pay an interim dividend, sent shares into a tailspin with Qantas closing down 8.08 percent at A$2.73.
However, Joyce was upbeat despite the steep on-year slump, pointing out that other airlines were booking losses as the world makes a tentative recovery from the downturn.
He added that all sectors of Qantas’ operations, including budget offshoot Jetstar, were in the black, while underlying profit for the full financial year to June was expected to be between A$300 million and A$400 million.
“According to IATA [International Air Transport Association], the world’s airlines will record net losses of US$5.6 billion in 2010,” Joyce said. “While the operating environment has been unprecedented and challenging, this result reflects the strength and diversity of our operations.”
Joyce stressed the company’s strong cash position of A$3.5 billion and said Jetstar, one of Asia’s top low-cost airlines, had enjoyed a record six months.
Qantas partly blamed weaker demand for the fall in profit, which came despite sharply lower fuel costs and an efficiency drive that pared operating expenses by 11 percent.
FOPLP PLANS? The chipmaker said the budget was for fab construction and manufacturing facilities, but did not comment on reports of talks with Innolux Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) board of directors yesterday approved capital appropriations of US$29.62 billion to install and upgrade the firm’s chip manufacturing process technologies, as well as its advanced and mature packaging technology capacity. The capital expenditure budget would also be for fab construction and installation of manufacturing facilities, the world’s biggest contract chipmaker said in a statement. TSMC did not comment on reports that it was in talks with flat-panel display maker Innolux Corp (群創) to acquire an idle plant as it prepares to convert manufacturing equipment into a new chip packaging production line that is to use fan-out
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), yesterday said it has signed an agreement with Innolux Corp (群創) to acquire the flat-panel display maker’s plant in Tainan for NT$17.14 billion (US$530.6 million) amid supply constraints of its advanced packaging capacity constraints. TSMC plans to use the plant, including buildings and manufacturing facilities, for future operations, the world’s biggest foundry service provider said in a filing with the Taiwan Stock Exchange. The chipmaker did not elaborate on whether it would convert the plant into a new panel-level packaging factory, or expand its advanced packaging chip-on-wafer-on-substrate (CoWoS) capacity. The chipmaker "is working whatever it
The world’s biggest steel producer sounded the alarm about a crisis in China that carries the potential to send global shock waves, warning of a deeper industry downturn than major events in 2008 and 2015. Conditions in China are like a “harsh winter” that would be “longer, colder and more difficult to endure than we expected,” China Baowu Steel Group Corp (寶武鋼鐵集團) chairman Hu Wangming (胡望明) told staff at the company’s half-year meeting. For commodities including steel, the warning from Baowu underscores risks to demand and prices, as well as what ArcelorMittal SA, the No. 2 firm in the industry, called an
As monsoon rains were about to break over Pakistan, 14-year-old Shamila and her 13-year-old sister Amina were married off in exchange for money, a decision their parents made to help the family survive the threat of floods. “I was happy to hear I was getting married... I thought my life would become easier,” Shamila said after her wedding to a man twice her age in hope of a more prosperous life. “But I have nothing more, and with the rain, I fear I will have even less, if that is possible.” Pakistan’s high rate of marriages for underage girls had been inching