New Zealand services under scrutiny in Qantas operations review

[S V Choong 4]

New Zealand services under scrutiny in Qantas operations review[/size]

5:00AM Friday May 30, 2008

By Grant Bradley

 

Transtasman and New Zealand domestic services are part of a Qantas review of operations which has already seen sweeping cuts to help offset the extra $2 billion in fuel costs it faces this year.

 

In announcing plans to ground planes, axe jobs and freeze executive salaries, Qantas chief executive Geoff Dixon said the airline was "finalising details of its international network restructure, including capacity adjustments and market exits", and would announce these within the next week.

 

An airline spokeswoman yesterday said transtasman flights and New Zealand domestic flights fell within the international network now under review.

 

On Wednesday night Qantas said it would cut capacity by 5 per cent - the equivalent of grounding six planes.

 

The move comes as international jet fuel this week topped US$173 ($220) a barrel and is despite two recent fare increases that pushed up international ticket prices by about 7 per cent and domestic fares by about 6.5 per cent. The carrier's Gold Coast to Sydney and Uluru to Melbourne routes will be the first to go, followed by Jetstar's exit from the Sydney to Whitsunday coast, Adelaide to Sunshine Coast and Brisbane to Hobart routes in July.

 

Capacity will be reduced on Qantas' Uluru to Sydney services and Jetstar will scale back services on some Adelaide, Avalon and Cairns routes by August.

 

"We don't like to do this but no one could anticipate this sort of fuel increase," Qantas chief executive Geoff Dixon said in the Australian.

 

"There's no business that can sustain this and say let's keep going - we just can't do that. People say 'You're just about to announce record profit, why don't you just hang in?' You just can't. We've got shareholders to think of, we've got dividends to pay and we've got commitments with A$35 billion ($42.86 billion) worth of aircraft."

 

Dixon said there would be voluntary redundancies in the "low hundreds" out of a workforce of more than 35,000.

Workers cool on executive pay freeze

Qantas executives facing a pay freeze are not getting sympathy from workers.

 

The airline has announced a pay freeze for its senior executive group and will defer a July pay review for the remaining 1000 executives.

 

"They've had massive increases year-in and year-out, and it's going to be frozen," said Australian Services Union assistant national secretary Linda White in the Australian.

 

"Gee, the smallest violin in the world is about to play." Last year's annual report showed chief executive Geoff Dixon's total remuneration was A$6.7 million ($8.2 million), up A$1.5 million on the previous year.

 

Qantas said it would do what it could to minimise redundancies by implementing a major programme of voluntary part-time work and an accelerated leave programme.

 

But union officials said forced redundancies were almost certain in some areas.

 

http://www.nzherald.co.nz/section/3/story....jectid=10513323

 

Edited May 29, 2008 by S V Choong