Qantas Airways to cut number of first-class, business-class seats after income and profits dip; to raise fares in 2010

Qantas Airways, the he national airline of Australia, has said it will cut the number of first-class and business-class seats on all except a few routes. This follows the airline’s profits nosediving by as much as 72%.

The carrier’s net income for the 6 months ended December 31, 2009, was Australian $58 million (US $52 million; £33 million) – down from Australian $210 million year ago.

The company has attributed this fall in profits and net income to a decline in demand for air travel and said it will not be paying dividends.

According to Alan Joyce, chief executive of Qantas Airways, the carrier’s first-class seats will stay on key routes, and there will be more business-class seats and less first-class seats.

Alan Joyce also announced that the airline will increase fares in 2010, after lower rates were offered in 2009.

According to him, the aviation industry is bound to continue suffering losses and diminishing profits unless ticket prices are raised.

Alan Joyce disclosed that the long-term trend for the first-class has been one of decline and that 6 out of 10 luxury seats of Qantas Airways are typically empty. Hence the need to “readjust” the balance between the first-class, the business-class and the premium-economy-class, he added.

In a statement, Alan Joyce said he is happy that Qantas could remain in profit unlike many other airlines. Qantas achieved this despite the challenging operating environment – demonstrating the “strength and diversity” of the carrier’s operations.

After reducing the number of the first-class and business-class seats, the passengers of Qantas can fly in the first-class only between Australia and London (via Singapore); and between Australia and Los Angeles.

Qantas Airways said it will “reconfigure” 29 of its planes, upgrade the in-flight entertainment of some other planes, as well as provide more seats on its Airbus A380 Superjumbo aircraft.

The airline said it plans to will ‘reconfigure’ 20 of its double-decker Airbus 380 planes and 9 of its new Boeing 747 Jumbo aircraft, by adding about 100 seats to the Airbus A380s, and 50 seats to the Boeing 747s.

Only 12 out of the 20 Airbus A380 aircraft will retain their first-class cabins. Besides, the Airbus A380 will have lesser number of business-class seats, but will have more economy-class and premium-economy-class seats. The rest 8 Airbus A380 planes will have no first-class seats at all, but will have 400 economy-class seats downstairs, plus a mix of business-class, economy-class  and premium-economy-class upstairs (in all, around 550 seats).

Qantas will, on 9 of its Boeing 747 planes, replace the first-class seats with 58 business-class sleeper seats, 36 premium-economy-class seats, and 265 economy-class seats – an increase of a total of 52 seats.

The airline is set to abolish first-class seats on its flight to Johannesburg, and is likely to do away with first-class on the Hong Kong route.

Qantas Airways has already scrapped the first-class seats on services to San Francisco and Buenos Aires.