AS Airways, Australia’s national carrier, said yesterday it would axe first class seats on all but a handful of its routes after a sharp fall in demand for premium flights in the downturn.
The news came as Qantas yesterday reported a 72 per cent plunge in first half net profit to just Au$58m (£33.4m), hit by the airline’s policy of slashing fares to fill its planes.
The group said underlying pre-tax profit – which rose to Au$267m over the first half due to a boost from an accounting change – was expected to come in the region of Au$300m-Au$400m for the full year, assuming no more major changes in market conditions and fuel prices.
The airline added that it had seen some signs of improvement by the end of the second quarter, but that increased fuel and depreciation costs would be felt in the second half.
First class seats will now only be available on Qantas flights from Australia to London or Los Angeles, while the group will make up the shortfall with additional business class seats.
Chief executive Alan Joyce said the firm’s planes could easily cope with an upturn in demand in the future as its first class cabin had on average been less than 40 per cent full.