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Qantas cuts likely to affect tourism industry.

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Steven Ciobo MP Shadow Minister for Small Business, the Service Economy & Tourism

The decision by Qantas to cut its flight capacity due to rising fuel prices will have a major impact on the tourism sector, Shadow Tourism Minister Steven Ciobo said.

''This is a major blow for the tourism sector, in particular key destinations such as the Gold Coast, Sunshine Coast, Adelaide, Cairns and Ayers Rock, who will lose some, if not all, Qantas or Jetstar services,'' Mr Ciobo said.

''However, the decision to introduce cost saving measures including the cancellation of five per cent of flights is understandable in the current climate of high oil prices.

''If anything, it reinforces the need for the Rudd Labor Government to prioritise tourism, and overturn its latest tax grab on the industry in the Budget.

''The industry has been hit hard since Rudd Labor took over Australia's economy, slashing Tourism Australia funding by $6 million in real terms, plus introducing $940 million in new tourism taxes.

''The tourism sector is sick of being ignored by wall-to-wall Labor, and the decision by Qantas to cut back flights and introduce cost saving measures is an example of the stress the industry is under.

''This would have been a big decision for Qantas to make, with some services being cut completely; however, it obviously needed to be done in the face of industry pressures.

''I do however applaud Qantas' decision to freeze the pay for senior executives, plus hold off on a pay review for other executives. It is a commendable decision in tough circumstances.''