Qantas to Split Operations

A day after Qantas Airways announced that it is cutting 400 jobs, the airline company also issued a statement, saying it is splitting the domestic and international operations into two different businesses. 

According to Qantas, these businesses would have separate chief executives and the companies’ financial standing would also be reported separately. The move will take effect in July this year. 

The split is part of the company’s five-year turnaround plan and a move to help its international division. 

Jetstar head Bruce Buchanan also announced that he is leaving the company to seek other opportunities. Jayne Hrdlicka succeeds Buchanan as chief executive although the latter will stay in Jetstar for the next six months to help with the transition. 

Buchanan will also serve as consultant for Jetstar for the next 18 months. 

Hrdlicka is Jetstar’s strategy and technology head. 

According to chief executive Alan Joyce, splitting the operations would allow a more efficient management of the two businesses. He said each business can plan according to market conditions and priorities. 

Simon Hickey will now head Qantas International while Lyell Strambi heads Qantas Domestic. Joyce will continue to head the entire Qantas business. 

Although the domestic operations of Qantas remain profitable, its international operations are struggling. In 2010-2011, Qantas Domestic posted a profit before tax of $552 million. Qantas International, however, lost $216 million. 

Qantas International’s toughest competitors include Emirates, Etihad, and Singapore Airlines. 

According to Joyce, management is working to ensure efficient separation of the two businesses in the next few months. He added that stakeholders will be informed and consulted for updates.