Struggling Australian carrier Qantas said it will axe 5,000 jobs, defer aircraft deliveries and suspend growth at Asian offshoot Jetstar in a major shake-up after deep first-half losses, warning of more pain to come.
The airline, battling record fuel costs and fierce competition from subsidised rivals, posted an interim net loss of $210m in the six months to December 31 as it faces some of its toughest conditions ever.
Underlying loss before tax came in at $225m, a figure chief executive Alan Joyce called "unacceptable and unsustainable".
Qantas management has today outlined a demolition job, but failed to follow through with a strategy for how it will grow the business and serve the national interest.
"Hard decisions will be necessary to overcome the challenges we face and build a stronger business," said Joyce, who will take a 36 percent wage cut as the company works to slash costs by $1,78bn over three years.
Part of the restructure will see 5,000 full-time positions lost from the carrier's 32,000-strong workforce by 2017 with a wage freeze across the network until the airline returns to profit.
"I regret the need for these wide-ranging job losses, but we will do everything we can to make the process easier for employees who leave the business," Joyce said.
"At the end of this transformation, Qantas will remain an employer of more than 27,000 people, the vast majority based in Australia - and we will be a better and more competitive company."
'Worst day for aviation people'
Australia's Labor opposition called it "the worst day for aviation people since the collapse of Ansett", referring to the former Australian airline that went under in 2001, while unions said workers were being punished for poor management.
"Qantas management has today outlined a demolition job, but failed to follow through with a strategy for how it will grow the business and serve the national interest," said Nathan Safe, president of the influential Australian and International Pilots Association.
The carrier flagged "significant changes" to its fleet plans and network and a reduction in capital expenditure of $894m across the next two financial years.
This will see the selling or deferred delivery of 50 aircraft, including the eight remaining Airbus A380s it has on order.
Qantas will also axe its Perth to Singapore route and suspend new growth plans for Jetstar.
"When it comes to Jetstar in Asia, we need to take the right decisions in accord with current market circumstances and our balance sheet," said Joyce.