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All Australasia worried as Qantas tipped to axe 5000 jobs

February 26, 2014 Aviation, Headline News 2 Comments Email Email

egtmedia59Claims about the staggering magnitude of staff cuts Qantas may announce at its half-year results presentation tomorrow have ballooned from the 3000 suggested a few days ago to 5000.

Even Jetstar staff in New Zealand are worried, let alone their counterparts in Australia.

The Herald Sun in Melbourne tipped yesterday that Qantas is set to axe 5000 jobs and sell its terminal at Melbourne Airport. Other papers mentioned the same figure, which has not been denied by Qantas. TICBanner

The airline may also slash the budget of Jetstar, the paper has suggested.

In New Zealand, Jetstar chief executive for Australia and New Zealand, David Hall, declined to comment on reports of job losses or the financial plight of Qantas, but he told the New Zealand Herald his airline was performing well in New Zealand. Jetstar will today launch B787 Dreamliner services between Auckland and Melbourne, three days a week for a month.

Jetstar New Zealand launched domestic operations in that country in June 2009, flying main trunk routes in competition to Air New Zealand, having begun trans-Tasman services four years earlier.

New Zealand remains an important part of Jetstar’s Australasian operations and New Zealand’s strong economy will further stimulate demand, Hall says.

TransTasman services are said to be a lucrative part of the Qantas network. Jetconnect, a New Zealand-based operation set up with lower labour costs, paid Qantas a NZD 156 million dividend, the NZ Herald reported. Unions in Australia fear Qantas may be about to implement a solution along Jetconnect lines in Australia.

Statements by Prime Minster Tony Abbott and other Government notables were bandied about yesterday, some seeming to favour providing support for Qantas and others suggesting that the airline should be left to stew in its own juice and deal with its own problems.

As the day wore on, Transport Minister Warren Truss said: “We have indicated an interest in being prepared to seek to legislate to take away the legislative and Government-imposed disadvantages that Qantas faces on the domestic market.

“We are working on legislation to achieve that.”

That seems to confirm reports earlier that the Government is drafting changes to the Qantas Sale Act, which currently restricts foreign ownership of the national carrier to 49%. Given the way the Senate is arranged, however, no changes are likely to be enacted before July 2014 at the earliest. One possible outcome is that the Government may provide some sort of interim debt guarantee to help Qantas, while the Qantas Sale Act stays in place.

This possibility has infuriated Virgin Australia, which says it will ask for the same deal “with 24 hours” if it is offered to Qantas.

Virgin’s chief executive John Borghetti has accused Qantas of peddling myths to put pressure on the Government.

“If this wasn’t so serious – not just for aviation but frankly for the free market in Australia – if it wasn’t so serious it would be laughable,” Borghetti told the ABC News AM program.

“It is really quite bizarre that a government would even consider such a move to the largest player in that particular industry – a player that is anything from going under, by the way – and what people think are getting caught up there is the emotion rather than looking at the facts.”

The real extent of staff cuts at Qantas and/or Jetstar won’t be known until the Qantas announcement tomorrow. The airline has booked the Heritage Ballroom at the Heritage Conference Centre in Sydney’s Westin Hotel to deliver the half-yearly result announcement and any other bombshells it plans. The ballroom holds about 300 people.

News Limited reported yesterday the results of a poll suggesting that up to half of Australian voters want the Government to buy back a share in Qantas (something which – barring a miracle – the Government won’t do).

According to the Essential Media polling results News Limited released yesterday, Australia’s sentimental attachment to Qantas is fading, with 44% of voters saying they didn’t care which carrier they booked with.

Just 35% of respondents said they usually tried to fly Qantas and, disturbingly for the airline, 19% said they tried to avoid buying Qantas tickets altogether. For Qantas, the heartening figure is that more than a third of all Australians (35% if the poll is correct) generally try to fly Qantas.

It’s worth remembering that the timing of tomorrow’s announcement by Qantas has no linkage with any decision by Government about whether to support the carrier. No official linkage, anyway.

Written by : Peter Needham

Currently there are "2 comments" on this Article:

  1. Michael Horn says:

    Qantas has become a war zone due to board and a CEO who are incapable to work with their work force rather than against it. Yes, the unions may play a big role but breaking them by breaking the company and its people seems like a weird and stupid strategy. My many friends who work for Qantas all squarely want Alan Joyce to go. Speak to the flight attendants on any flight and they tell you what they think. They are hungry for a leader with a vision who can realize their potential. The more the board stands behind him the more they alienate the work force. You cannot force workers to follow a leader who misleads them. It is dictatorship inits worst form. Unluckily, people have a choice and they vote with their feet. Not just the workers, but also passengers and shareholders!

  2. Mark Cameron says:

    good journalism is not about CONJECTURE but it has become a feature of the industry !!

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