Qantas separates business units

Time of article published May 22, 2012

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Sydney - Embattled Australian flag carrier Qantas said on Tuesday that it will split its international and domestic arms into separate businesses as part of its plan to transform the airline.

Each of the two entities, currently combined as Qantas Airways, will have its own chief executive and report its financial results separately, effective from July.

The move follows an 83 percent slump in first-half net profit in the six months to December and an announcement Qantas would delay the delivery of two A380 superjumbos by three years as part of spending cuts.

The airline said the restructure would “enable a greater focus on the priorities of turning around the Qantas international business and enhancing the strong Qantas domestic business”.

Group chief Alan Joyce remains in overall charge and said the transformation would strengthen the airline and help it deliver its strategic goals.

“Formally separating the management of Qantas international and Qantas domestic will ensure that we can independently run each business according to its specific priorities and market conditions,” he said.

“These measures give us the right structure to address the challenges and opportunities we face - and the right people.”

A series of executive changes were also announced with Bruce Buchanan, the head of Qantas's budget offshoot Jetstar, seen by many as a potential successor to Joyce, leaving after a six-month transition period.

Simon Hickey, who is currently in charge of the Qantas Frequent Flyer programme, was appointed chief executive of the international business while Qantas operations boss Lyell Strambi will run the domestic arm.

The latest development in Joyce's plan to turn around Qantas' fortunes comes a day after he announced 500 jobs will be axed in its heavy maintenance and engineering operations, sparking an angry backlash from unions.

In the re-organisation, Qantas will cease heavy maintenance at Tullamarine airport in Melbourne by August, with work being consolidated in Avalon, another facility near the Victorian state capital, and the eastern city of Brisbane.

Qantas has been forced to act after its disastrous profit figures, caused by high fuel costs and a bitter battle with unions over wages and conditions that saw Joyce ground the entire fleet for 48 hours last October. - Sapa-AFP

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