Qantas today announced a major restructuring of its airline business, including the separation of its domestic and international units.
As part of its controversial five-year transformation plan, which it launched in August 2011, Qantas International and Qantas Domestic – which are currently combined as ‘Qantas Airlines’ – will be formally separated and managed as two businesses. From 1 July 2012, each will have its own CEO and its own operational and commercial functions. The units’ financial results will also be reported separately.
Alan Joyce will continue to lead the Qantas Group as its CEO, while Simon Hickey, the current head of Qantas Frequent Flyer, will become CEO of Qantas International, and the existing Group Executive of Operations, Lyell Strambi, will become CEO of Qantas Domestic.
Jetstar’s Group CEO Bruce Buchanan will leave the group, but will stay on with the airline in a consulting capacity for 18 months following his departure. Qantas also revealed that Simon Hickey, the current Group Executive Commercial & Freight, has “decided that it is appropriate to leave the group” as a result of the restructuring.
“We have begun the process of restoring Qantas International to a sustainable position,” said Joyce. “The restructure I announce today advances this essential programme of change. It recognises that the Qantas group is a true portfolio business.
“Qantas Domestic and Qantas International face very different situations. Qantas Domestic is strong and profitable. We are seeing the most sustained levels of high customer satisfaction on domestic services since 2004, and we are the airline of choice for corporate Australia.
“Qantas International… is loss-making and does not deliver sustainable returns. However, we are committed to turning it around through the five-year strategy we announced last year, based on flying to global gateways, deeper alliances, smart investment in product and disciplined capital management.
“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,” Joyce added.
Qantas said that operationally, it will continue to be “business as usual for Qantas customers and employees”.
The unveiling of the Qantas transformation strategy last year caused an outcry from unions and led to a series of strikes that culminated in the grounding of the airline’s entire fleet for two days.
The latest round of restructuring follows yesterday’s announcement that Qantas will consolidate its heavy maintenance operations in Melbourne and Brisbane, in a move that will cost 500 jobs.
Qantas was also recently forced to shelve a major part of its international strategy – the creation of a Southeast Asian full-service carrier – following the breakdown of talks with Malaysia Airlines.