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Qantas (ASX:QAN) announces flight cuts, Jetstar CEO Gareth Evans to depart

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Qantas chief executive Alan Joyce insists the airline’s move to cut the number of domestic flights it offers until March next year will not worsen chaos at airports, as the carrier brings on thousands of workers for the upcoming winter school holidays.

In an update to the stockmarket on Friday, Qantas announced it would cut ‘capacity’ on high -frequency routes between Sydney, Melbourne and Brisbane by at least 10 per cent until March next year. The move was made in response to surging oil prices, but comes after weeks of problems at airports, where Qantas passengers have been hit by cancelled flights, long queues and lost baggage.

Qantas will cut domestic capacity by a further 5 per cent until the end of September.

Qantas will cut domestic capacity by a further 5 per cent until the end of September. Credit:James Brickwood

Asked at a press conference whether the capacity cuts would worsen the situation, Joyce said: “I think actually, it will help.”

“The reality is we’re taking capacity out because of oil prices. We buy over $4 billion in fuel every year. Our fuel bill has gone through the roof. So that has to come through in terms of the economics of the business.”

But passengers should not expect to avoid lining up altogether during the peak July school holiday period, Joyce indicated. “There were queues at airports before COVID. The queues are not new,” he said. “They were terrible at Easter, and they’re a lot better now.

“We think it will get smoother and smoother over the next weeks and months ahead. And absolutely [our] performance at the moment, it’s not where we need it to be, but it will improve over the next few weeks.”

Barrenjoey analyst Matt Ryan said the moves to cut domestic flights would help Qantas mitigate the impact of surging oil prices, which have added over $1 billion to its fuel bill, and could also help the airline improve its customer service.

“Bringing down capacity also provides some benefits to the workforce, which could result in an improvement to operational and customer service issues being encountered at the moment,” he said in a note to clients.

Qantas has been under fire from travellers for weeks over issues with delayed or cancelled flights and customer service, including long waits for calls at its contact centre. The company, which shed thousands of jobs at the start of the COVID-19 pandemic when flights were grounded, has been battling to re-staff its workforce.

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