Qantas Airways Ltd. said it plans to slash 500 jobs after posting an 83% drop in first-half profit on Thursday. The Australian airline blamed rising fuel costs and a series of strikes that temporarily grounded its fleet for the loss.
Qantas said net profit for the six months to December 31 was 42 million Australian dollars ($45 million), down from AU$239 million a year earlier.
A bitter labor dispute last year resulted in months of rolling worker strikes and prompted the airline to temporarily ground its entire fleet. The strikes cost the airline $194 million, Qantas said.
CEO Alan Joyce also said the high Australian dollar had made it difficult for the airline to do business, and said fuel costs for the six-month period were AU$2.2 billion, up AU$444 million, or 26%, from the year before.
The airline said it would cut 500 jobs, withdraw some international flights and revamp its catering and engineering businesses to cope with the financial challenges. None of the positions that are being cut will be moved offshore, Joyce said.
The airline also plans to cut AU$700 million in capital expenditure over two years.
"The highly competitive markets and tough global economy in which we operate mean that we must change," Joyce said. "We need to be ready to take tough decisions, and we must become more flexible and productive."
Qantas shares rose 4.6% to AU$1.63 in Sydney as investors welcomed the airline's plan to reduce costs.