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Australia's Qantas delaying A380 deliveries

A ground crew member cleans the windshield of a Qantas passenger plane at Adelaide airport in this February 13, 2012 file photo. REUTERS/Tim
A ground crew member cleans the windshield of a Qantas passenger plane at Adelaide airport in this February 13, 2012 file photo. REUTERS/Tim

SYDNEY (Reuters) - Australian carrier Qantas is delaying delivery of two new Airbus A380s to help cut capital spending by A$400 million ($410.7 million) while it increases capacity on its more profitable domestic operations.

Delivery of the two Airbus A380s, originally intended for early 2013, will be put back to 2016/17, with a final six A380s delivered from 2018/19.

Qantas said in February it would cut capital spending by A$500 million over two years and announced plans to cut 500 jobs after its first-half profit halved. A bitter industrial dispute and higher fuel bills took their toll on profits.

The additional A$400 million announced on Friday will take capital expenditure cuts to A$900 million. Capital expenditure will now total A$1.9 billion, the company said.

Qantas also said it will increase capacity on its domestic routes during 2012 and 2013 for its Qantas, Jetstar and Qantaslink services.

As part of that plan, Qantas will add additional services during peak times on core east-coast business routes and reintroduce Boeing 747 and Airbus A330 services on the east-west route. Jetstar will increase capacity in key leisure markets.

"We know that network and frequency are key to customer satisfaction and the changes we are announcing today mean we will offer even better service in both areas," Qantas Chief Executive Officer Alan Joyce said in a statement.

Joyce said Qantas' goal in the domestic market was to retain market share at around 65 percent and maximize profit.

Earlier this month, media reported Qantas' heavy maintenance bases were under review and said Qantas would cut 400 jobs at its base near Melbourne airport, with 660 workers at another base also at risk.

Qantas said the consultation process had concluded and a decision will be announced by mid-May. ($1= 0.9739 Australian dollars)

(Reporting by Amy Pyett; Editing by Lincoln Feast and Paul Tait)

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