Qantas shares fell sharply on Monday after the airline announced it was cutting back on domestic and international flights to counter a fall in demand.
The airline noted that along with a fall in demand for flights over the recent Easter and school holiday breaks, it was now facing turbulence ahead of the federal election and as a result of weak consumer confidence.
As a result, Qantas said it and wholly-owned subsidiary Jetstar were reducing their number of domestic flights over the last quarter of this financial year.
In addition, Qantas said it would be removing three Sydney-Los Angeles services and redirecting capacity to Singapore and Hong Kong to meet the demand from those markets.
Domestic capacity growth across the group over the second half of the financial year had now been revised to between 0.5 and 1 per cent, down from a prior estimate of 2 per cent.
“Some softness in demand, related to the upcoming federal election and recent drop in consumer confidence in Australia, began to emerge over the peak Easter and school holiday period in late March and continued to be seen in forward bookings in April and May,” Qantas said in a statement.
Qantas said its domestic capacity growth over the past three months of the 2016 financial year would now be negative compared to the same time last year.
Qantas shares fell more than 11 per cent to $3.61, their lowest level on five months.