Qantas will abandon all Qantas brand services to Townsville from Sydney and replace them with Jetstar, the latest in a long line of substitutions in which Qantas has dropped out of several holiday destinations in Queensland and elsewhere in favour of its discount subsidiary.
The economics are simple in Qantas' view: Jetstar saves it about 40 per cent in costs. So the more routes it can take over without jeopardising the lucrative Qantas inter-capital business-class traffic, the better.
But Jetstar has achieved the easy savings in the domestic market and Qantas is still faced with pruning $1 billion from expenses this year, only $750 million of which it claims to have identified.
So now it is focusing on a tougher nut - pilot salaries......
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