Qantas slashes capacity

Australia - To combat the slowing global demand, Qantas will slash capacity in the next year, equivalent to grounding 10 aircraft.

"By taking this action now we will have the flexibility to switch growth back on as soon as market conditions improve," CEO Geoff Dixon said in a statement. "We are in unpredictable times and the international business market, in particular has slowed."

In addition reducing capacity, Dixon said "actual flying" in the next six months would be 4% less than the same period in 2007.

As a result of slower demand, the company now expects profit before tax for the 2008/2009 financial year to be around A$500 million, a figure that Dixon believes is within the current range of analysts forecasts.

Dixon however stressed that Qantas would not be increasing its previously announced reduction of 1,500 jobs.

"We will, however, be seeking further efficiencies by implementing an accelerated leave programme."