Carbon tax also hurting Qantas: Abbott

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Principle Activity	The operation of international and domestic air transportation services, the sale of worldwide and domestic holiday tours and associated support activities including catering, information technology, ground handling and engineering and maintenance.
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Federal Opposition Leader Tony Abbott says the situation at Qantas will only get worse under the government’s carbon tax.

Qantas chief Alan Joyce on Thursday announced 500 jobs would go as part of changes to the airline’s engineering and catering services, as it tries to adjust to tough market conditions.

He also warned there could be further impacts on jobs as Qantas works through reviews of other parts of the business, saying there were more troubled times ahead for the airline.

"Qantas are impacted by the carbon tax, which is going to add a $110-million-a-year hit on the company, which is obviously going to make it harder to keep employing people in this country," he told reporters in Canberra.

Mr Abbott also said ongoing speculation of a Labor leadership change was eroding business confidence.

"While the workers of Australia are increasingly finding their jobs in jeopardy there is paralysis from the government in Canberra," he said.

"This is a divided and directionless government paralysed while the faceless men try to work out who the prime minister should be."

Qantas on Thursday said its first half net profit fell 83 per cent to $42 million, from the previous corresponding period.

During the six months, its fuel costs rose by $444 million to $2.2 billion and it booked a $194 million charge related to industrial action that led to Qantas grounding its aircraft.

Later, a spokeswoman for Climate Change Minister Greg Combet said the carbon price would not affect airlines’ international operations in Australia, only domestic operations.

Qantas and Virgin estimate the carbon price will add around $3 to $3.50 per seat per domestic sector to the cost of a ticket.

The price effects have been modelled into the Treasury’s estimate of a 0.7 per cent rise in the consumer price index and would be compensated through tax cuts, family payment increases and pension rises.

The $23 per tonne carbon emissions tax on the nation’s top 500 big polluters will come into effect on July 1.

AAP