19 Jul 2008

Tough times force Qantas to slash 1,500 jobs

1:12 pm on 19 July 2008

Qantas has announced it will shed 1,500 staff across the world because of rising fuel costs and tough conditions in the aviation industry.

The national carrier has also scrapped plans to hire another 1,200 workers in the new financial year and will retire 22 older aircraft from its fleet of 228.

Qantas's Jetstar cabin crew and pilot base in Adelaide will also be shut by the end of August.

Its call centres in Tucson, Arizona and in London will also close, with the loss of 99 jobs. Call centre operations will be concentrated at the carrier's centres in Australia and New Zealand.

The Engineering Printing and Manufacturing Union says it does not know yet if any Qantas jobs in New Zealand will be cut.

The union represents 46 Qantas workers who operate the ticketing functions at the international airports in Auckland, Wellington and Christchurch.

EPMU organiser Strachan Crang says the Australian airline has not been in contact following the announcement. He says Qantas knows it has an obligation to notify the union about any job losses in New Zealand.

The Transport Workers Union in Australia say their members were not consulted before the announcement, while the Australian Manufacturing Union has written to Qantas chief executive Geoff Dixon asking for an urgent meeting.

Future must be ensured - Qantas boss

Mr Dixon said on Friday that the aviation industry was facing a major crisis and Qantas needed to ensure its future.

"The jobs to be cut will be principally concentrated in non-operational areas, although operational positions will also go. Over 20 per cent of our management and head office support jobs will be cut."

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

To reduce costs further, Qantas will maintain an executive pay freeze for the foreseeable future. It will also abandon plans to increase its capacity by 8% in 2008/09, with no growth at all expected.

The jobs cuts announced on Friday follow weeks of speculation that Qantas would have to take drastic action to face the fuel price 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.

Fuel accounts for about 35% of the airline's expenses - a cost set to increase by more than $A2 billion in 2008-09.

Crude oil, from which jet fuel is derived, had been trading as high as $US140 a barrel recently.