Qantas chief executive Alan Joyce has launched a spirited defence of his management team's performance, saying they're doing a "great job in tough circumstances".
Qantas shares plunged almost 15 per cent in trading on the ASX today as investors responded to the latest profit warning by dumping the stock.
Qantas said that it will slash 1000 jobs and issued a grim profit warning following a "marked deterioration" in trading conditions in November.
The airline says it expects to report an underlying loss of between A$250 million and $300 million for the six months to the end of the year.
Speaking this afternoon, Qantas chief executive Alan Joyce J said he'd be taking at least a 38 per cent pay cut in 2013 due to the the airline's poor performance.
But he defended the work of Qantas' board and management.
"I believe the management of Qantas are doing a great job in tough circumstances," Joyce told Sky News.
"The Qantas board and management are operating in tough environments and I believe are continuing to do a good job in tough circumstances."
He said there were a lot of airlines around the world that "would love to be reporting a profit nine of the last 10 years".
He said Qantas had a strong domestic franchise, a strong Jetstar business and a strong frequent flyer business.
"We will do whatever we need to do to secure the Qantas Group's future," he said.
Earlier he took a swipe at Air New Zealand and the other airline stakeholders in Virgin Australia saying there had been an unprecedented distortion of the Australian domestic market.
Air New Zealand, Etihad and Singapore Airlines now have a 73 per cent in Virgin - a fierce competitor for Qantas on its domestic routes in particular - and this stake will increase following a A$350 million capital raising.
"This foreign government capital has been used to finance dramatic increases in domestic capacity, with profound implications for the future of Australia's aviation industry," Joyce said.
He said the Virgin rights issue was designed "was designed to weaken Qantas" in the domestic market.
"The uneven playing field in Australian aviation is being tilted further. We cannot and we will not stand still in these extraordinary circumstances," he said.
Qantas has appealed to the Australian government to review foreign airlines' investment in Qantas and said it was taking steps to make savings of $2 billion over the next three years.
Staff numbers will be cut by at least 1000 positions within the next year, Joyce's own A$5.1 million salary will be cut and there would be a pay freeze and no bonuses for executives over the next 12 months.
Its network would be "optimised" and spending on 100 top suppliers would be reviewed.
"Given the deterioration in earnings, the Group no longer expects to generate positive net free cash flow in the current financial year," he said.
Qantas would conduct a review of all planned capital spending to achieve further substantial reductions to ensure that the business generates positive net free cash flow from the 2015 financial year.
"As we work through our cost reductions, capital expenditure and structural review, no options will be off the table," Mr Joyce said.
He said that since the global financial crisis, Qantas had confronted a "fiercely difficult" operating environment - including
the strong Australian dollar and record jet fuel costs, which have exacerbated Qantas' high cost base.
"The Australian international market is the toughest anywhere in the world. Our competitors in the international market, almost all owned or generously supported by their governments, have increased capacity to pursue Australian dollar profits, changing the shape of the market permanently."
Joyce said the outlook for the second half of the current financial year remained volatile and, given the uncertainty in global economic conditions, fuel prices and foreign exchange rates, Qantas was not able to provide further guidance at this time.
The shares had bounced this afternoon to be trading 11.5 per cent down by 4.45 (NZT).