Qantas blame supply chain disruptions for job and service cuts

Qantas has said recent natural disasters including Queensland's floods and cyclones and the Christchurch and Japan earthquakes and tsunami, would have a $140 million impact on its annual results.

After announcing plans to cut management jobs, reduce international and domestic capacity and retire aircraft early, Qantas chief executive Alan Joyce said yesterday that further fuel levies were a possibility. He said the fuel bill for the second half of the financial year would be $2 billion.

It is also reviewing its staff costs by reducing management headcount and annual and long-service leave balances.

Mr Joyce refused to nominate how many managers would be made redundant, saying details of the "first phase" of cuts would be announced in coming weeks.

"Unfortunately, if fuel prices remain high for a long period of time, and economies go back into recession, we could be into a more difficult period than we have ever been in our history," Joyce said.

"During the global financial crisis, while we had economies that were thrown into negative territory in terms of recession, we had a very low fuel price. It came down to $30.

"We are seeing fuel prices of over $100, $130 a barrel as a result of supply issues, not demand issues,” he said.

Its budget offshoot Jetstar was also affected, with load factors falling 4.9 percentage points to 77.8 per cent in the domestic business and 4.6 points to 75.1 per cent in the international business.

RBS analysts yesterday maintained their buy recommendation on Qantas, pointing to its strong hedging position protecting it from further potential spikes in the oil price.

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See Blog: #252 - QANTAS woes illustrate cost has to be a strategy sometimes