Qantas Airways Ltd. said Thursday it plans to slash services to Japan, shift other Asian routes to low-cost unit Jetstar and cut jobs in response to surging fuel costs.
Australia's largest airline said it will stop its Melbourne-Tokyo service in September, and trim Sydney-Tokyo flights. Jetstar will take over operations between Cairns and Tokyo. The changes will lead to a "small number" of job losses in Cairns and Japan, the carrier said.
Qantas also plans to cut a few hundred workers as a result of reductions to domestic services announced last month. American Airlines Inc., Delta Air Lines Inc., Korean Air Lines Co. and other carriers worldwide are also axing routes or cutting jobs as they struggle to cope with jet-fuel prices that have almost doubled in a year.
"This is the action that's needed," Angus Gluskie of White Funds Management in Sydney said before the statement. "We are going to see more of it going forward from other airlines as well."
Airlines worldwide may report combined losses of as much as $6.1 billion in 2008, according to the International Air Transport Association, whose members account for 93 percent of international traffic. That would be the biggest loss since 2003 and compares with an April forecast for a $4.5 billion profit.