Qantas to reduce work force by 1,500 worldwide

Australian airline Qantas has just announced plans to let go 1,500 employees worldwide by December of this year. As a part of the work force reduction, the airline's call centers in Tucson, AZ, and London will be closed. The Jetstar crew base at Adelaide also will be shut down. (Jetstar is the low-fare subsidiary of Qantas.)

In a statement to the press, Chief Executive Officer of Qantas Airways Ltd, Geoff Dixon, said that in addition to the job cuts, Qantas would not implement its budgeted growth in flying in the 2008/09 financial year and would cancel plans to hire a further 1,200 people for that growth. Citing sustained high oil prices and changing economic conditions, Qantas also announced plans to retire 22 aircraft.

Mr Dixon said every effort would be made to achieve the job cuts through voluntary redundancy, early retirements, leave without pay, an accelerated leave program and converting positions from full-time to part time.

"However, some compulsory redundancies will be necessary, which we regret.

"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," he said.

Mr. Dixon maintained the job cuts and capacity reduction are necessary to "protect our competitive position, protect the great majority of over 36,000 jobs and enable us to grow profitably when conditions improve."

According to today's announcement, Qantas plans to:

• maintain a recruitment and executive pay freeze for the foreseeable future
• reduce forecast capacity growth in 2008/09 from eight per cent to nil growth
• retire up to 22 older aircraft from its fleet of 228 (including announcements previously made)
• close its long-running call centres in Tucson, Arizona and London at a cost of 99 jobs, and concentrate all its call centre activity in Australia and New Zealand
• suspend Jetstar's recruitment program until the end of the year, including its recruitment of pilots under the 457 visa program
• close Jetstar's cabin crew and pilot base in Adelaide by the end of August, with Jetstar's 37 return weekly Adelaide flights to remain and be serviced by aircraft and staff based in Darwin and Sydney
• proceed with its major fleet re-equipment program of new and more fuel efficient aircraft such as the A380 and B787
• proceed with its customer-focused product and service initiatives such as domestic Business class lounges, terminal facilities and opening the new Qantas Customer Service Centre of Excellence

Mr. Dixon noted that agreements reached earlier this week with the unions representing the airline's engineers and pilots "provided greater flexibility for Qantas and its pilots and its engineers, certainty at a volatile and difficult time and maintenance of a sustainable wages policy."

Qantas already had undertaken several moves to restructure in the past few months, including cutting unprofitable routes, and raising fares, and closing a Jetstar crew base in Cairns.