Qantas cuts growth forecast with more flights harmed by ash

by William ASTON on June 15, 2011

Qantas airlines has been forced into cutting its domestic growth forecast as it faces several problems - including an ongoing and continuing disruption because of volcanic ash in Chile.

Australia’s national carrier says that it expects domestic capacity to increase by only 5.5% this year when compared with previous estimates of 8% growth. The airline had to cancel all of its flights to and from Western Australia’s main city Perth because of ash that has come directly from Puyehue-Cordon Caulle’s volcano range in Chile and has spread further than expected. Already, flights to and from the island state of Tasmania and neighbouring New Zealand have had to be suspended too.

Flooding and cyclones earlier on in the year hit travel demand across Australia and this bleak situation worsened through current travel disruption. Qantas says that it was reducing capital expenditure by at least 400m Australian dollars, roughly £260, with growth slower than expected.

The company says that it is also cancelling or deferring an order of 12 narrow-bodied aircraft. Alan Joyce, Qantas’ chief executive, told how Qantas Group has long been famous for taking decisive action that matches capacity to demand, explaining that his organisation continues to lead the way in the premium market while Jetstar offers consistently low fares across the leisure market. Unfortunately, Mr Joyce is still unable to clarify when services will return back to normal amidst ongoing disruptions brought on by the ash cloud.

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