Is this the end for the Flying Kangaroo?

TRAVEL editor Brian Crisp looks at the issues facing Australia's flagship carrier following today's dramatic announcements.

Qantas planes

IS this the beginning of the end for the flying Kangaroo?

That is the question everyone will be asking after today's dramatic announcements by Qantas chief Alan Joyce.

I think the answer is no, it's not the end of Qantas. But it is the end of the Qantas we know and love. Welcome to the new lean, mean machine that is fighting for its life.

Well it's not lean and mean yet. But it will be soon.

Hard, and very unpopular decisions need to be made in order to keep the airline flying. What we are seeing now is a company being surgically dismantled to create a new culture.

Every decision that is being made is aimed at improving efficiency, ultimately cutting costs.

We are told that the new planes Qantas has bought require less maintenance - and sadly that equals job losses.
But no jobs will be sent offshore. The 500 positions (Qantas has 35,000 staff - 92 per cent of those Australian based) that are being made redundant will happen through voluntary redundancies, leave without pay or redeployment.

We should not forget that Qantas is the only Australian airline that does the majority of its heavy maintenance here in Australia (about 90 per cent). Its competitors don't. So it costs Qantas more to be an Australian-based airline and that is the challenge the company faces every day and with every decision it makes.

Mr Joyce surprised no one when he said that Qantas profits had crashed and that jobs would be lost. We were all expecting bad news.

But exactly what is to blame?

The fact that the outbound travel business is meeting expectations simply means that Qantas is not making enough money out of tourists travelling to Australia.

We know that all levels of tourism are struggling because Australia is no longer a "value for money'' holiday destination. Qantas is feeling the pain because fewer tourists from Great Britain and Europe are coming here.

And that's because our soaring dollar is turning tourists away. It has no chance of reversing that trend because price matters when people choose holidays.

Stay tuned. Today's announcements are just the beginning.