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Qantas to axe Auckland-Los Angeles route

Thursday 16 Feb 2012 2:15 p.m.

Qantas ware pulling out of the Auckland-Los Angeles route (AAP)

Qantas ware pulling out of the Auckland-Los Angeles route (AAP)

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Qantas will pull out of the Auckland-Los Angeles route as a cost-cutting measure, while its Jetstar subsidiary increases its share of the NZ market.

Qantas is pulling out of the Auckland-Los Angeles route as part of new cost-cutting measures that include slashing 500 jobs.

The cuts come as Qantas on Thursday reported an 83 per cent fall in its first-half net profit to $A42 million ($NZ54.3 million) to December 31.

Chief executive Alan Joyce said the jobs would be lost from engineering and catering services to deal with uncertain times in the aviation industry.

The airline plans to slash capital expenditure by $A200 million ($NZ258.8 million) this financial year, and cut $A500 million ($NZ647 million) from spending next year.

It said it would withdraw from the Auckland-Los Angeles and Singapore-Mumbai routes from May 6 - in addition to previously announced withdrawals from the Hong Kong-London and Bangkok-London routes, effective in March.

Meanwhile, Qantas' discount brand subsidiary Jetstar boosted its share of New Zealand's domestic market to 19.9 per cent as at December 31 from 14.9 per cent a year earlier.

That follows Virgin Airline's Pacific Blue quitting New Zealand's domestic routes in October 2010. Air New Zealand controls about 80 per cent of the market.

Jetstar was the biggest contributor to Qantas' underlying pre-tax earnings with $A147 million ($NZ190.2 million for the half year, some 53 per cent of the $A277 million ($NZ358.5 million).


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