Qantas slashes 500 jobs as part of restructuring

May 21, 2012
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Qantas has been struggling with high fuel costs which have eroded profits/AFP-File
SYDNEY, May 21 – Australian flag carrier Qantas said on Monday it will axe 500 jobs in its heavy maintenance and engineering operations as part of a restructuring to cut costs, sparking an angry backlash from unions.

The move follows an 83 percent slump in first-half net profit in the six months to December and an announcement it would delay the delivery of two A380 superjumbos by three years as part of spending reductions.

In the reorganisation, Qantas will cease heavy maintenance at Tullamarine airport in Melbourne by August, with work being consolidated in Avalon, another facility near the Victorian state capital, and the eastern city of Brisbane.

Of the 500 jobs cut, which were signalled in the profit announcement in February and amount to 10 percent of the maintenance staff, 422 will be lost at Tullamarine, while 113 will go at Avalon.

A total of 35 new positions will also be created.

The embattled carrier’s chief executive Alan Joyce said there was not enough work for three separate facilities, with new technology meaning a 60 percent reduction in maintenance requirements over the next seven years.

“Like the manufacturing industry, aviation maintenance is a labour and capital-intensive sector. Our cost base in heavy maintenance is 30 percent higher than that of our competitors,” he said.

“We must close this gap to secure Qantas’ future viability and success.”

The consolidation will save up to Aus$100 million (US$99 million) a year, the airline said, with one-off costs from the closure of Tullamarine and the redundancies amounting to about Aus$50 million.

“Qantas has invested heavily over the past 10 years in new aircraft that are more advanced, more efficient, attractive to our customers and require less maintenance, less often,” added Joyce.

“But we cannot take advantage of this new generation of aircraft if we continue to do heavy maintenance in the same way we did 10 years ago.”

The Qantas Engineers Alliance, made up of members from three unions, said Australia’s capacity to maintain aircraft was at risk and urged the government to intervene.

“We are calling on government to immediately intervene and call an urgent aviation industry round table before any jobs and critical skills are lost,” said the alliance’s Cesar Melham.

“This should be done in the interests of our nation’s capability and future security.”

Qantas has been struggling with high fuel costs which have eroded profits, as well as Joyce pulling all its planes out of the skies for 48 hours last October as part of a dispute with staff.

That row, over plans to shift the focus of its ailing international arm to Asia, was ultimately ended by an order from the country’s industrial relations umpire, but it cost Qantas Aus$194 million.

Joyce attempted to soften the jobs blow by implying there was plenty of work elsewhere for skilled engineers, particularly in Australia’s booming mining industry.

“Qantas maintenance engineers are highly skilled and have translatable skills that are sought after by other businesses,” he said.

Despite the cuts, Qantas still employs around 30,000 people in Australia.

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