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Qantas confirms 5000 job cuts, loss of $A252m UPDATED

Qantas has confirmed it’s axing 5000 jobs in a bid to cut costs after posting a $A252 million loss in the six months to December 31.

Over the next three years, Qantas will shed 1500 management and non-operational positions, with the remainder of the job cuts to come from changes to the fleet and network and the restructure of maintenance operations and catering facilities.

Meanwhile, wages for all employees will be frozen and the company's executives have already taken a pay cut.

The airline is attempting to save $A2 billion by the 2016/17 financial year as it tries to return to profitability.

The shares fell 10c, or almost 8%, to $A1.17 on the ASX following the announcement.

Chief executive Alan Joyce says the loss is “unacceptable” and tough decisions have to be made.

"There are many Australian companies that have failed because they were not prepared to make the hard decisions. Qantas is not one of them," he says.

"We will cut where we can in order to invest where we must... we will be a far leaner Qantas group."
It has been reported each job in Qantas costs $A100,000 a year – far more than any airline it competes with.

However, Mr Joyce also blames Qantas’ plight on its competitor, Virgin Australia, which has the backing of Air New Zealand, Etihad Airways and Singapore Airlines, which he says creates an “unlevel playing field.”

"The Australian domestic market has been distorted by current Australian aviation policy," he said. "Late last year, these three foreign airline shareholders invested more than $A300 million in Virgin Australia...that capital injection has supported continued domestic capacity growth by Virgin Australia despite its growing losses."

As part of its bid to save costs, Qantas will cut capital expenditure by $A1 billion over the next three years. It will also hand back its Brisbane Airport lease for $A112 million, though it will retain exclusive use of most of northern end of terminal until 2018.

Meanwhile, the airline says more than 50 aircraft will be deferred or sold, with older planes like Boeing 747 jumbos to be retired early and orders of new superjumbo A380s and Dreamliner B787-8s to be delayed.

It will also axe underperforming routes including its Perth to Singapore service, while timing and aircraft changes will be made to other routes.

Mr Joyce also announced Qantas would suspend the expansion of the Jetstar Asia business in Singapore, which continues to face tough conditions, though he indicates the airline remains committed to finding opportunities in Asia.

"Jetstar has been a pioneer Australian brand across Asia and we continue to see major opportunities for it in the world's fastest growing aviation region," he said.

No immediate effect will felt on the New Zealand operations of either Qantas or Jetstar.

Despite company no comments, Qantas is expected to slash thousands of jobs for baggage handlers, engineers and security guards as it slashes $A2 billion of its costs.

Qantas chief executive Alan Joyce will announce the details when the company reports an anticipated $A300 million six-month loss to the Australian Stock Exchange for the six months to December 2013.

Some reports say up to 5000 of the airline’s heavily unionised 33,000 jobs are set to go – a figure the company has preveiously denied –and the airline is also expected to sell its long-term lease at Brisbane airport.

In its biggest ever operational shakeup, major changes will be made to international routes, including the Dubai-London leg of the “kangaroo route” now run in an alliance with Emirates.

The reports also say Qantas will retire its Boeing 747 planes earlier than expected, with the last to take off early next year. Other aircraft will also be taken out of service this year, ahead of schedule.

Senior pilots will be offered redundancies or retrained and redeployed on smaller aircraft on less pay.

Other moves expected today are a proposed to lift legal restrictions on overseas ownership, a government-guarantee for debt borrowings and a pushback in new aircraft orders.

More Queenstown flights
Meanwhile, in a piece of good news, Qantas has announced it will boost its Sydney-Queenstown service during the coming winter months. The existing three times weekly service will increase to five from April 7 to May 2; four times from June 6 to July 2; and daily from July 4 to October 24

Comments and questions

Holden, Ford, Toyota, SPC, Qantas....... Australia is no longer the lucky country, NZ is. Lucky their unions are not here.

Have your 1 million Kiwis back and then see how lucky you are

Ouch baby, ouch!

Arguably, though, they're there because the strength of unions (so not just the Aussie economy) made it attractive.

Not a problem. Mostly they're the ones with drive anyway.

QANTAS has a legacy of over reaching - it's desire to be counted in the top 10 airlines was a monumantal display of delusion.

It is an airline riddled with arrogance such as that displayed by senior executives who when a couple of years back had their attention directed to Air NZ's various product innovations (skycouch's Premium Economy developments etc) sniffed to the media that they pay no atention to smaller airlines.

Yes, promoted and supported by an equally arrogant government quick to interfere politically to grease the slipway for its flagship airline. The ultimate hubris.
As Maggie said - eventually socialists do indeed run out of everyone else's money :-)

The best single improvement this company could make is to get rid of Mr Joyce.

Ford, Holden, Toyota.. now Qantas. One word.. Unions

Pete, Could'nt agree more. How long will it take for the Union movement to pickup that sucking the life blood out of any organisation is eventually suicidal.

There are many companies that ran quite successfully for a very long time with unions, when unions were much stronger than they are now.

Given that unions seem to be about the weakest they've been in the last century, it's absolutely ridiculous to claim that the sole cause of these companies struggling is the unions.

Of course, it could never be management's fault for running the companies poorly could it?


Unions have historically had a profound impact on the lives of workers who would otherwise be on the arse end of a hiding from employers (I am talking of the days of old of course).

Unions still undertake important work in the bargaining for their members as do employer unions/associations. They need to exist.

I work in a very large company and see the employment related cock ups coming out of HR regularly which without union reps being onto would usually see the worker (s) impacted shafted royally.

Oz's problems are of their own making and yes in that case their unions have vastly overreached and now OZ is an economic banana republic once again - with industries simply uncompetitiive as labour has priced itself out of the marketplace - yes Union there have alot to answer for.

when you are paying a mechanic over $200K and the average wage in a business is A$105000 surely the Unions have to sit back and say - gee, thats probably a bit OTT, make it hard to compete - but no - they ask for more payrises. Qantas will go the way of Ford and Holden, make no mistake and the Qantas guys didn't support Holden or Ford, so I expect little support for Qantas staff.
Ultimately though, the product is substandard and people don't like frlying Qantas, thats the real problem - no use having a business if no one wants to use it....

It is the Oz Qantas Union/s that is/are too unrealistic. I have a friend who flies for Jet Connect-the Kiwi arm of Qantas who are not party to the HIGH wages of the legacy of the past. The Kiwi pilots are well paid and the Oz based Qantas staff are overpaid to a degree that is pulling the company down. Ask the Oz pilots if they'd work on Jet Connect wages. The allowances etc., they ( Ozzies ) demand via their greedy unions are totally unrealistic. The earlier days of airlines and glamour and prestige have long faded. The egos have not.

Everyone is bagging the unions.
The unions are only one side of the bargaining table. It seems to me that the mangement is soft or scared of them.
Strong unions do not destroy well run companies. Air New Zealand and Fonterra are cases in point.
Strong unions however do work on behalf of their members and get reasonable living wages and salaries.
There is fault on both sides. The QANTAS management could all take a 50% salary cut and they could still send their kids to private schools and have a good lifestyle. Will they do it - will they hell!

Nony Mouse - I agree with you. There area number of folks who categorically write off unions as if they have a philosophical hatred of them yet on the whole unions represent workers as a bargaining agent as does emplyer unions/associations bargain for their members - yet who bags them?

Employer groups argue for anything from relaxed and favourable legislation for their members through to outright protectionism so they may maximise their profits much as a union will try to maximise its members incomes - where is the fundamental difference?