Qantas Group CEO Alan Joyce has announced that 5,000 jobs full-time equivalent job positions will be cut from the company by FY17 as part of a restructure of the airline designed to save up to $2 billion over three years.
Joyce told a media conference on Thursday morning that the job cuts would be drawn from a reduction of management and non-operational roles by 1,500, a restructure of line maintenance operations, the previously announced closure of the Avalon maintenance base and Adelaide catering, and other operational positions affected by fleet and network changes.
“I regret the need for these wide-ranging job losses, but we will do everything we can to make the process easier for employees who leave the business,” he said. “At the end of this transformation, Qantas will remain an employer of more than 27,000 people, the vast majority based in Australia – and we will be a better and more competitive company.”
Joyce also announced the retirement or deferral of 50 aircraft. Retirements will include all non-reconfigured 747-400s by the end of FY16, and all 767-300ERs by the third quarter of FY2015. Further changes will come from a greater utilisation of narrow-body 737-800s on domestic services, domestic A330s to be used exclusively on peak Sydney-Perth and Sydney-Brisbane-Melbourne triangle services, and A330-200s to be freed up to replace 747s on international services.
“To reach $2 billion in cost cuts over three years, we have to work our assets harder, become more productive, retire older aircraft, and make sure that our fleet and network are the right size,” Joyce said. “We must defer growth and cut back where we can, so that we can invest where we need to.”
Aircraft on order that are to be deferred include the eight remaining Airbus A380s and the final three of Jetstar’s 14 787-8s, while Jetstar’s A320 order book has been “restructured.” The airline says it will have an “ongoing review of delivery dates to meet potential future requirements” of the deferrals.
The Group will also make changes to some of its services in order to realise savings or efficiencies. To this end, Qantas International will withdraw from the Perth-Singapore route in mid-2015, leaving Perth with no Qantas international services aside from Emirates codeshares, while Sydney-Singapore and Brisbane-Singapore services currently operated by 747s will be down-gauged to A330s.
While the airline says it will not reduce capacity on its services to London, it will re-time its Melbourne to London service from November this year to reduce the time the A380 spends on the ground at Heathrow, and to free up an A380 for additional flying, opportunities for which the airline “will evaluate.”