Tuesday July 29, 2014

Qantas – 5,000 jobs and 50 aircraft to go

Qantas will further defer the remaining eight Airbus A380s it has on order. (Qantas)

Qantas will further defer the remaining eight Airbus A380s it has on order. (Qantas)

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.”

The 767-300ER fleet will be retired by early 2015.(John Absolon)

The 767-300ER fleet will be retired by early 2015.(John Absolon)

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.

5,000 full time equivalent jobs will go from management, line maintenance, Avalon heavy maintenance and Adelaide catering, and as a result of the fleet restructure. (Seth Jaworski)

5,000 full time equivalent jobs will go from management, line maintenance, Avalon heavy maintenance and Adelaide catering, and as a result of the fleet restructure. (Seth Jaworski)

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.”

Comments

20 Responses to “Qantas – 5,000 jobs and 50 aircraft to go”
  1. Brett M says:

    What a bloodbath! How is it fair that Alan Joyce and the board retain their jobs when their mismanagement has been the foundation for the demise of Qantas.

  2. Chris Grealy says:

    Without a doubt Joyce has made a terrible mess of managing Qantas, and one can only assume that his management style is more tuned to antagonising and sacking workers and safeguarding executive bonuses than looking after the good of the company.
    It is long past time for Qantas management to be sacked en mass; only when this has been done will it be possible for the company to be turned around.

  3. Graeme Hooper says:

    Can the aviation commentators do a simple table to compare AIRNZ and QANTAS that reflects KPI’s which show where QANTAS is non competitive. Is it fleet utisation, is it Revenue per seat, is it engineering staff and baggage handlers employed per aircraft turnaround, is it number of head office staff per aircraft hours flown etc Why can such a remote but innovative airline make a profit if we are lead to believe that economic conditions are so bad for QANTAS. AIRNZ has the same competition on Asian routes as QANTAS. Would be great to see some informed figures than than the political debate which is a lot of rheteoric.

  4. NJP says:

    Do Qantas board look at what their competitors are doing or just complain about them…..? Air NZ is the perfect example – read today’s report

  5. Ron T says:

    It’s about time Qantas (and Virgin for that matter) started running its businesses to make a profit and create value for shareholders. It seems strange to me that a CEO can have a strategy to make a loss for the sake of retaining market share. Alan, in a full service airline you retain market share by providing quality of service, having modern comfortable aircraft and paying attention to detail. At the same time manage your costs and make sure you make a profit. Part of all this is to maintain staff moral by making them proud and motivated to work for the airline, not “we will look after you as you lose your job”. Alan, your glass is half empty. It should be half full!
    What ever happened to the Asian strategy that was announced when the Emirate deal was consummated? Perth will lose it’s ONLY Qantas international service, to Singapore (Adelaide has already lost it’s). Singapore Air has 3-4 flights a day to Perth and Qantas can’t fill one? Hello, anyone see a problem here?

  6. australianaviation.com.au says:

    If only it were so easy Ron, then we’d all be doing it!
    Cheers
    Andrew

  7. AW Perth says:

    There are no easy answers for QANTAS and full size multinational airlines must be about the toughest business to run at the moment. Having said that ignoring some fundamental shifts in customer business does not help. The fact that the fleet configuration and operating costs make it unprofitable to have a single QANTAS international aircraft operate from Perth is staggering. The vast majority of WA business is focussed directly to Asia so how can there be not a single flight to an asian hub. For those of us that have stuck it out this long will desperately want to continue to support the airline but they are making it harder after each announcement. QANTAS please don’t become the Spirit of Sydney you can be so much better if you really want it!

  8. Adrian says:

    I agree with Ron.

    The way to save QANTAS is to bring in managers from Emirate and let Emirate do the the staff training.

    In December I flew Heathrow to Dubai, Dubai to Perth, Perth to Melbourne, Melbourne to Dubai and Dubai to Heathrow.
    All sectors were with QANTAS except Dubai to Perth (Emirates). The most pleasant passenger experience was the Emirates sector.
    Perth to Melbourne was an hour late leaving (Technical fault).
    Melbourne to Dubai was half an hour late pushing back due to “loading some very expensive fuel” this is not a reason but an excuse because refueling an A380 to Dubai is something they do every day and as for the expense they had mine and others passengers money to pay for it weeks before hand.
    The QANTAS cabin crew have this odd way of asking which meal a passenger would like by flicking their eye contact between me and the passenger next to me. (So neither passenger new who the crew members wanted an answer from first).

  9. Greg says:

    Why is Alan Joyce still in charge of this company. His actions need to be investigated. The fact he doesn’t look like he’s going anywhere astounds me

  10. Takayuki Yamada says:

    Alan Joyce is criminal. Once he was with Jetstar, he cut almost all flight to Japan. I had lot of chance to fly but since so, it makes Australia so far from Japan.
    He looks he never think about expand and try to increase income to Qantas. Just cut and cut and cut!
    There should be much more efficient way to manage the company.
    Is just cutting to be evaluated as good?

  11. john says:

    No doubt running an Airline is no easy business anywere , but it is clear if you compare the performance of Qantas and Air New Zealand over the past five years,two airlines that operate in the same region, Air New Zealands management team has done a better job than Qantas!

  12. PeterL says:

    Alan Joyce is dealing with the legacy of the old management regime, the A380 and no 777s. I am going to point out the obvious as it seems very few are seeing it! Qantas has large institutional investors who would have got rid of Alan Joyce ages ago if they thought he was not doing a good job!!!

    These institutional investors have been backing Joyce for a few years now while he takes a dinosaur of an airline and transforms it into a modern airline that can compete on the world stage. Qantas could go down the AirNZ route and go broke, then reform with competitive worker agreements etc to reduce the cost base.

    Alan Joyce is trying to avoid the AirNZ route to restructure but it needs to be given time as it will not happen overnight, and remember the institutional investors are backing Joyce in this strategy. These institutional investors know way more about this than we do and they are backing this up by putting their money where their mouth is so to speak, are you?

    Just to show what Qantas is up against, Virgin sends its E190s to Portugal for heavy maintenance, that is how bad the costs are here in Australia. Why shouldn’t Qantas be able to do the same if it makes them competitive?

    The Qantas sale act is crippling them and it needs to go now!

  13. bob says:

    Well john is going to get you alan and your board members and run over the top of you with virgin australia pay back is such a bitch aint it!!!

  14. bob says:

    Has anyine stopped asked the staff if alan joyce and Clifford and friends should go?

  15. Freightbusdriver says:

    Why is Alan Joyce still in charge of this company. His actions need to be investigated. The fact he doesn’t look like he’s going anywhere astounds me

    Guys, everyone is bitching about AJ, but to be fair, who ´layed the groundwork´ for the mess QF is in today?
    Should we not rather talk to ´Geoff & Margeret´ about serious strategic mistakes made 10 years ago? Where are the 777´s that could well have been ordred years ago when enjoying the ´fat times´ after Ansett went bust? Where was the Forward looking fleet strategy , covering the next 20 years? They were cashed up to the brim back then, but I guess, Return on Investment & Shareholder value were more important back then (securing the Bonunes of the `aforementioned´` ! Dont get me wrong, I am no AJ fan AT all, but are we all being ´objective´in this discussion????

  16. Nigel says:

    PeterL is close to the mark in ‘pointing to ‘sins of the fathers’, problems that all large legacy carriers around the world are struggling with. The extra dimension that Qantas are faced with is a Maginot Line of trade union power, which won’t let management tackle the issues of staff productivity and cost without pulling their members out on strike. A Qantas A330 captain earns 90% more per flying hour than a Jetstar captain, ie far more than the market rate. Until these cost premiums can be faced, Qantas will continue to slide to failure.

  17. George says:

    Firstly, I’m not an Aussie but an interested onlooking Kiwi aviation lover. Freightbusdriver, from a totally neutral viewpoint your comments look to have hit things on head perfectly.

    Qantas missed the boat years ago and are now paying the price for very poor forward planning by the then respective management boards. Sad to see, but it doesn’t seem to be totally the fault of the present board, though without doubt, some of their decision making has been questionable and has exacerbated the situation Qantas finds itself in at present. All over the world airlines are having to institute new operating practices to remain competitive and no doubt have met with resistance from employees, some justified, some not, but to remain solvent pragmatism on both sides has needed to be exercised by management and unions. Could this also be the case with Qantas?

    It is interesting reading the comments comparing Air NZ’s management to Qantas. I do agree that Air NZ’s success has probably been brought about by a more “switched on” management team with better management skills and practices, but don’t forget, it also takes an open minded, pragmatic staff across the entire workforce to buy in to the plans that were put forward to them at the time for it to succeed. Before you start thinking it, no, I’m not an employee of Air NZ lol!!

  18. ian says:

    ok Qantas is to shrink. Get on with it. But how are you going to get rid of all those extremely overpaid workers ?

    PS. get out of the media spotlight. 1/2 the punters in OZ think you’re going to close down completely & so won’t book you.

    Qantas forward bookings must be awful. Normally people are booking their Xmas flights overseas right now, or at least the price conscious ones.

  19. Allan says:

    The commentators are missing this point made by Allan Joyce “5,000 jobs full-time equivalent job positions will be cut from the company by FY17″. 5,000 jobs full-time equivalent job positions (5000 FTE) could mean 5000 full time staff positions this equivalent to 5000 staff will be made redundant.

    Now depending on how many staff are full time and part time are employed.for the 5000 FTE there could be in excess of 5000 staff maybe 5500 or 6000 or more.

  20. Peter says:

    Face the reality, all the good people followed Borghetti to VA and this has showed just how poor QANTAS is these days. I fly for work to Asia all the time and QF is simply not a solution out of QLD vs CX/VA/SQ et al. They should have left Joyce to run Jetstar which is probably his forte (cheap airlines) and put the smart people at the top. Shame. Shame on Joyce, Clifford and cronies.