Qantas Airways splits in two

Wednesday, 23 May 2012 00:05 - - {{hitsCtrl.values.hits}}

Qantas Airways is splitting its international and domestic operations into two separate businesses from July.

Each of the two businesses will have its own chief executive, and will report its financial results separately, Qantas said on Tuesday.

The restructure will bring about several changes to the airline’s executive team, including the departure of Jetstar boss Bruce Buchanan.

“Formally separating the management of Qantas International and Qantas Domestic will ensure that we can independently run each business according to its specific priorities and market conditions,” Chief Executive Alan Joyce said in a statement.

“These measures give us the right structure to address the challenges and opportunities we face, and the right people.”

Qantas’ domestic airline made an underlying profit before tax of $ 552 million in the 2010/11 financial year, while the international business lost $ 216 million.

Joyce said the company was committed to turning around the international business through its five-year strategy announced in 2011.

Simon Hickey, the current Qantas Frequent Flyer Chief Executive, will head Qantas International.

Lyell Strambi, currently Qantas’ Executive of Operations, will be Chief Executive of Qantas Domestic.

“Operationally, it will continue to be business as usual for Qantas customers and employees,” Joyce said. “We will be carefully working through the details of the separation of Qantas International and Qantas Domestic over the next few months. Relevant stakeholders will be kept informed and consulted as required and further announcements made at the appropriate time.”

Meanwhile, Buchanan had decided to leave the company for other opportunities, which likely is to help other Australian companies expand into Asia.

He will remain with Jetstar for the next six months to help with the transition to new Chief Executive Jayne Hrdlicka, who is currently Qantas’ Head of Strategy and Technology. Buchanan will also provide consultancy services to Jetstar for an additional 18 months.