Qantas dropping first-class seats?

No more first class

Airlines have been one of the industries hit hardest by the global recession with knock-on effects being the cancellation of plane orders, staff pay rows and a massive fall in profits. Coupled with the rising price of jet fuel and it is not surprising that many airlines are taking severe measures to cut costs.

Qantas, for example, has announced that it will be cutting first class seats on all but a few routes due to lack of demand and a staggering 72 percent drop in profits.

Hit hard

The company, over the past six months, has seen its net income fall by $52 million compared to the year before. Qantas stated that the fall was due to a "drop in customer demand and said it was scrapping dividend payments".

However, a silver lining for the Australian carrier is that unlike many other airlines, it has managed to stay in profit.

In a statement, CEO Alan Joyce said, "While the operating environment has been unprecedented and challenging, this result reflects the strength and diversity of our operations."

While Qantas have said that their passengers will only be able to fly first class between Australia and London, via Singapore, and between Australia and Los Angeles, the drop in demand for first class seats is believed to be something that is happening throughout all airlines.

As service gets better in the likes of Business Class, premium classes are seeing less and less interest from consumers, especially those trying save money.

Qantas' shares unsurprisingly dropped 8.1 percent after the announcement.

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