Qantas to axe 500 jobs, pool maintenance to cut costs
SYDNEY: Qantas Airways Ltd, Australia’s largest carrier, will cut 500 jobs and consolidate heavy maintenance in two bases to pare costs as it contends with rising fuel prices and losses on international routes.
The carrier would centralise heavy maintenance work at Melbourne’s Avalon airport and in Brisbane, it said in a statement yesterday. A third base, at Melbourne’s Tullamarine airport, would be reduced to only doing line maintenance, such as preflight checks, starting in August, it said.
Qantas would save A$70mil to A$100mil a year from the changes, as chief executive officer Alan Joyce tackles maintenance operations costing 30% more than competitors’, according to the carrier. The airline also expects a 60% reduction in heavy maintenance requirements over seven years as it adds new planes.
“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,” Joyce said in the statement.
Heavy maintenance would eventually be reduced to a single base, probably Brisbane, he told a media conference after the announcement without giving a timetable.
The carrier closed unchanged at A$1.43 in Sydney trading, while the benchmark S&P/ASX 200 index rose 0.7%. Qantas has fallen 32% in the past year, compared with a 12% drop in the index.
Unit costs at Sydney-based Qantas’ mainline unit had risen 1.6% over the past 10 years, compared with declines at Emirates and Singapore Airlines Ltd, Russell Shaw, an analyst at Macquarie Group Ltd in Sydney, said in a May 11 note to clients.
Joyce’s decision was criticised by political and union leaders.
The shutdown of the Tullamarine base would affect the “long-term skills capacity” of Australia’s aviation industry, Workplace Relations Minister Bill Shorten said in a emailed statement yesterday. — Bloomberg