QANTAS Airways says Cheap flights not sustainable

The industry's cut price airfares are not sustainable as airlines are increasingly being troubled by tough economic times, QANTAS Airways Ltd said.
Chairman Leigh Clifford indicated that the carrier did not rule out a further cut to its international capacity and noted a drop in premium and overseas travellers.Mr Clifford said cut price airfares could not continue in the long term.Grab them while they last.Mr Clifford said Qantas had reacted quickly to the aviation sector downturn, reducing some domestic and also international capacity.Qantas in April slashed its annual pre tax profit forecast by more than half, flagged it would cut up to 1,750 jobs.It has also cancelled and deferred orders for Boeing and Airbus aircraft.

Mr Clifford said the airline was working hard to match costs to lower revenues.
There is capacity growing in a number of key international routes which we fly and you have to say ‘is there a growth in demand? Mr Clifford told a Committee for Economic Development of Australia function in Perth. And I'm saying the growth in demand doesn't reflect the increase in capacity.
Reflecting on Qantas' aborted proposed tie up with British Airways, Mr Clifford said industry consolidation was challenging to say the least.Any industry can see some benefits of reducing overheads and better utilisation of capital, and we look at what's possible but it is not a straightforward exercise.It's much more difficult than other industries because of the bilateral agreements, etcetera.

Mr Clifford defended Qantas' decision to conduct some aircraft maintenance offshore, saying about 80 per cent was undertaken in Australia.He said high corporate tax rates had hampered the aviation sector's competitiveness, backing the Business Council of Australia's big call for the rate to be halved to 15 per cent.

Singapore Airlines pays 18 per cent corporate tax, Cathay pays 17.5 per cent, and Emirates and Etihad pay none at all.We are at a considerable disadvantage.We are no longer competitive and I think its got to be looked at seriously.Qantas made international headlines after pleading guilty to price fixing charges on air cargo shipped from Canada, according to that nation's Competition Bureau.