Qantas must re-examine its business model

SLASHING 5,000 jobs, reducing fleet size, freezing plane orders, pulling out of some routes, unloading assets and downsizing other operations, including terminating its Brisbane Airport lease. These are some of the drastic steps Australian carrier Qantas is taking after posting a pre-tax loss of A$252 million (S$285 million) for the first half of its financial year.

All these are part of a broader A$2 billion cost-cutting plan drawn up by the carrier which is struggling with its international operations and seeing its domestic market coming under pressure from arch-rival Virgin Australia.

Qantas' decision to tie up with Emirates, and reposition its international hub at Dubai has not really helped, it seems. Some observers in Australia, including former Qantas senior officials, have wondered aloud whether this arrangement benefits Qantas or its erstwhile rival.