The Indianpost

New Qantas to slash about 1000 jobs

Qantas will cut about 1000 jobs from its 36,000-strong workforce as part of a five-year strategic plan that includes orders for new Airbus aircraft and closer alliances with other airlines, including British Airways.
Qantas today also unveiled plans to set up two new Asia-focused airlines, presenting it as a do-or-die shake-up of its international business, which also called for a $9 billion fleet upgrade.
Unions mull legal action over Asia plans
List of the changes planned by Qantas

Qantas, which has been reviewing its offshore operations to cut costs and unprofitable routes, said it would launch a new, premium Asian airline as well as a Japanese low-cost carrier, the latter jointly with Japan Airlines and Mitsubishi.
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“To do nothing, or tinker around the edges, would only guarantee the end of Qantas International in our home Australian market,” chief executive Alan Joyce told a news conference, noting that the international operation’s cost base was about 20 per cent higher than its major rivals.

“That would be a tragedy,” Mr Joyce added.
Investors cheered the announcement, sending Qantas shares up as much as 6.5 cents, or 4.3 per cent, to 159.5 cents in early trading.

“They really needed to do something. Globally the airline industry is also struggling and they have gone a long way here to address the issues they’re facing,” CMC Markets chief strategist Michael McCarthy said.

Unions, Senate
Unions are already indicating they will resist the company’s plans. The carrier said the changes would affect about 1000 jobs but it would be “looking to minimise the number of compulsory redundancies wherever possible”.

Australia’s aircraft engineers union will consider taking legal action against Qantas over its plans to launch a premium airline based in Asia and a new budget airline in Japan, the union’s chief said.

Australian Licenced Aircraft Engineers Association Secretary Steve Purvinas said the airline’s move could effectively breach the Qantas Sale Act, which called for the airline to keep the majority of its facilities in Australia when it was privatised.
“The move to open up a new premium airline in Asia is clearly a step by the airline to avoid its obligations under the Qantas Sale Act,” Purvinas told Reuters.

The union’s response may get some assistance in the Senate, with independent South Australian Senator Nick Xenophon announcing he would seek support for a bill to force the carrier to pay foreign-based crews at the same level and conditions as those based in Australia.

“If you are employed by an Australian airline, flying on an Australian registered plane, you should be employed under Australian standards,” Senator Xenophon said.
Regional gateways
Qantas placed large advertisements in metropolitan newspapers today about a “new Qantas [which] will take on our global competitors” with a “state-of-the-art fleet”.
The advertisements also trumpet that the airline will offer passengers “more choices through new gateways to more destinations around the world”.

Qantas has previously unveiled a four-pronged strategy aimed at turning around its loss-making international operations, including boosting its presence in Asia and forming closer ties with other airlines.

Macquarie Equities analysts have emphasised that management will need to demonstrate the airline can “compete effectively” against rivals such as Singapore Airlines for passengers in Asia.
Mr Joyce said the airline had to make fundamental changes now to ensure the international business was profitable.

“We have established a five-year plan that has the objective, first, of returning Qantas International to profitability in the short term,” he said.

At the end of the process, Qantas would participate in regional Asian opportunities and in the world, rather than being an Australian-based international airline, he said.

Mr Joyce confirmed to reporters that the airline is considering Kuala Lumpur and Singapore as a hub for a new premium airline.
The airline is due to announce the finer details of the strategic review of its premium international business on August 24.
Fleet changes

The fleet changes call for the acquisition of between 106 and 110 Airbus A320 aircraft, including planes for Jetstar Japan and the new premium Asia-based airline. Between 28 and 32 of these would be current-generation A320s and the rest the fuel-efficient, next-generation A320neo aircraft.

Qantas also delayed the delivery of its final six A380s for up to six years in a move aimed at conserving capital and bolstering its balance sheet.

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