Australian Airline Turns to Asia For Recovery

Posted August 16th, 2011 at 8:15 pm (UTC-5)
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Australian carrier Qantas Airways has unveiled plans to launch two Asia-focused airlines, buy more than 100 new aircraft and cut some 1,000 jobs in an effort to spur growth.

Officials announced Tuesday that under the five-year plan, Qantas will team up with Japan Airlines and Mitsubishi Corporation to launch a new, low-budget domestic airline by the end of next year.

The company's chief executive, Alan Joyce, says Qantas also plans to launch a new premium Asian airline next year. The joint enterprise will be based in an Asian country still to be determined and will initially use 11 aircraft.

The new airlines will fly Airbus 320 jets. Qantas said it will buy up to 110 new Airbus planes, worth more than $9 billion. To cut costs, it has deferred delivery of six Airbus 380 super jumbo jets for up to six years.

But the plan to cut about 1,000 jobs in Australia sparked threats by unions and politicians to block the move.

Joyce told reporters that to do nothing or do too little would ruin Qantas.

Australia's national carrier has been losing money from international flights. A series of technical disasters in the past year has exacerbated its financial losses.