Qantas chair backs cost-cutting

National carrier's chairman says global economic condition likely to remain uncertain.

Qantas Airways (QAN) chairman Leigh Clifford says the national carrier will have to persist with its cost-cutting push, with the global economy and aviation market set to remain challenging in the year ahead.

Addressing shareholders at Qantas' annual general meeting, Mr Clifford said he expected uncertainty in global economic conditions to persist.

"Against this background, Australia’s economic position has been relatively strong – but there are elements of weakness," he said.

"A lower dollar will be a long term benefit, but in the short term it means higher fuel costs for the group.

"We have not yet seen the rise in business confidence following the election translate into any discernible increase in demand for domestic or international travel."

He added consumer confidence remained low at the leisure end of the market.

"The tough domestic market conditions that we faced in financial year 2013 are unlikely to ease in the short term, with growth coming into the market at the same time as weak underlying demand," he said.

As a result, Mr Clifford said Qantas needed to remain focused on reducing costs in order to maintain its competitive advantages.

"There is much hard work ahead," he said.

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