Qantas shares plunge over axed flights

QANTAS shares have taken a dramatic plunge after the airline axed its plans to add more flights in the face of weakened demand.

Free images for use in editorial and online only - no sales/no advertising - please credit pictures by james morgan where used or issued SYDNEY INTERNATIONAL AIRPORT, 19 November 2014: The newest addition to the Qantas Airways fleet has touched down on Australian soil, proudly carrying a retro livery and bearing the name of trailblazing former CEO James Strong. The Boeing 737-800, the 75th aircraft of its type The design is a flashback to the livery that adorned Qantas Boeing 747s in the 1970s and is a flying tribute to mark seven decades of the Flying Kangaroo logo, which falls this month. Qantas Airways CEO Alan Joyce joined past and present staff and executives, Boeing executives and other guests to welcome the aircraft after it was given a water cannon salute from Air Services Australia. "Seeing this brand new aircraft in classic livery inspires a real sense of pride in all that Qantas and its people have achieved,Ó said Mr Joyce. ÒFor 70 years this familiar kangaroo on the tail has represented not just our airline but also the best of Australia and a sense of home for those who have seen it at airports around the world. ÒWe are especially proud to name this aircraft after our friend and former CEO, James Strong. James was instrumental in the making of the modern Qantas, including the merger with Australian Airlines. James was an exceptional leader and this aircraft represents his love of innovation and his respect for the past.Ó

QANTAS shares have fallen more than 14 per cent after the airline axed its plans to add more flights, blaming soft demand and confidence.

The airline said Monday that it had revised plans to increase seat capacity in April, May and June because of weak customer demand.

“Some softness in demand, related to the upcoming federal election and recent drop in consumer confidence in Australia, began to emerge over the peak Easter and school holiday period in late March and continued to be seen in forward bookings in April and May,” Qantas said in a statement.

To mitigate the negative impact on the group’s domestic operations, domestic capacity growth in the fourth quarter will now be negative compared to the same period a year earlier.

The airline will boost domestic capacity between 0.5 per cent and 1 per cent during the period, instead of about 2 per cent as originally planned.

Qantas shares fell as much as 14.29 per cent to $3.48 in early morning trade on the Australian stock market.

At 12.54pm Qantas shares were down 44 cents, or 10.84 per cent, at $3.62 in a lower market.