Qantas Airways aims to save A$1.5 billion ($1.24 billion) over the next five years as part of a new cost reduction programme.
The programme, Q Future, will build on an existing plan that saved A$550 million over the last year, says the Oneworld carrier. Qantas says it plans to save $500 million in the year to 30 June 2010 in the first phase of the new programme.
"Q Future will focus on Qantas' operations and improving efficiencies across a range of areas, including sales and distribution, fuel conservation, aircraft utilisation and schedule, and procurement," says Qantas CEO Alan Joyce.
"We are also keeping a close watch on oil and fuel prices. While well below the record levels seen in 2008, they remain volatile and are trending upwards."
"For 2010, the Qantas group has hedged 80% of fuel costs at a worst case price of $89 per barrel."
The plan comes after Qantas reported that its pre-tax profits for the year to 30 June fell 87% to A$181 million amid a "volatile and challenging time for the aviation industry".
It added that while there were signs of an improvement in passenger volumes, high levels of volatility in the economic outlook, industry capacity, passenger demand, fuel prices and exchange rates continue.