QANTAS Axes 1500 Jobs

[Kee Hooi Yen 0]

 

From The Sydney Morning Herald

 

 

Qantas axes 1500 jobs

Jonathan Dart

July 18, 2008 - 11:03AM

 

Qantas will shed 1500 staff and has shelved plans to hire a further 1200 staff, citing tough economic conditions and high fuel prices.

 

The airline's chief executive, Geoff Dixon, said in a press conference in Sydney that 20 per cent of management and head office jobs in Australia would be cut, a redundancy program introduced and 99 call centre workers in the US and London would be cut.

 

"The jobs to be cut will be principally concentrated in non-operational areas, although operational positions will also go,'' he said in Sydney.

 

"Over 20 per cent of our management and head office support jobs will be cut.''

 

Mr Dixon said there will be compulsory redundancies, as well as voluntary redundancies, early retirements, leave without pay, an accelerated leave program and full time jobs moved to part-time.

 

"Some compulsory redundancies will be necessary, which we regret,'' he said. "The redundancy program will be completed by December.''

 

To reduce costs even more, Qantas will maintain an executive pay freeze for the foreseeable future.

 

Its long-running call centres in Tucson, Arizona and in London will be shut, with the loss of 99 jobs.

 

Call centre operations will be concentrated at its centres in Australia and New Zealand.

 

Qantas will also abandon plans to increase its capacity by eight per cent in 2008/09, with no growth at all expected.

 

Up 22 older aircraft from its fleet of 228 will be retired.

 

Its low-cost offshoot Jetstar will suspend its staff hiring program, including pilot recruitment and the Jetstar cabin crew and pilot base in Adelaide will be shut by the end of August.

 

Mr Dixon warned the government today that a future emissions trading scheme may result in even deeper job cuts, saying that the aviation industry has been unfairly singled out.

 

He said financial modelling conducted by the company had shown that the scheme would cost about $100 million a year to implement.

 

"We can't absorb $100 million in costs,'' he said.

 

"We will have to put those costs back on direct domestic operations.

 

"It could have a bigger effect than what we are doing here.''

 

Qantas is preparing a submission to be put to Climate Change Minister Penny Wong outlining the company's concerns.

 

The jobs cuts announced today follow weeks of speculation that Qantas would have to take drastic action to face the fuel and economic headwinds being battled by airlines across the world.

 

"Acting now, on top of the measures already taken, will protect our competitive position, protect the great majority of over 36,000 jobs and enable us to grow profitably when conditions improve,'' Mr Dixon said.

 

He also said the rising cost of oil is one of the biggest problems facing the industry. A few years ago oil prices accounted for 20 per cent of the mainline airline's costs while they now accounted for 35 per cent of the mainline and 45 per cent of Jetstar's costs.

 

Crude oil, from which jet fuel is derived, has been trading about $US140 a barrel recently but overnight it subsided to around $US130, amid concerns about a slowing US economy.

 

Mr Dixon said Qantas was confident of being able to survive the current crisis, as it had in the past.

 

"We are confident of doing the same again,'' he said.

 

The airline will go ahead with a major fleet re-equipment program of new and more fuel-efficient aircraft such as the A380 and B787.

 

Meanwhile, Qantas reached an 11th-hour in-principle agreement with its engineers union, which has been waging a 10-week long industrial dispute over pay.

 

Mr Dixon said the deal was only signed at 8.30pm yesterday, but would not comment on the details of the agreement.

 

The union had been arguing for a five per cent wage increase per annum whereas Qantas was offering three per cent.

 

"The agreement is hugely important to our future,'' he said.

 

"The industrial situation of the last 10 weeks has been very difficult, costs have risen by over $2 billion year to year and if we don't act there won't be any unions, because there will be no Qantas.''

 

Mr Dixon said Qantas was very conscious of the important role it played in business and tourism in Australia.

 

"This was uppermost in our mind when reviewing all aspects of our operations in recent weeks,'' he said.

 

"And, as a result, the latest schedule changes mostly involve a reduction of capacity on some routes and not the wholesale elimination of routes.''

 

Mr Dixon said Qantas would proceed with already announced new direct services between Sydney and Buenos Aires in November.

 

 

[Victor Ralk 0]

Bad news indeed for the 80 Jetstar Crew based in Adelaide