Desperate calls by the Transport Workers’ Union (TWU) are unlikely to soften a dramatic decision by Qantas to slash its workforce by 6000 people and continue to stand down 15,000 employees in an emergency bid to save $15 billion over three years in the face of the Covid-19 coronavirus bookings collapse.
The Qantas plan, announced by chief executive Alan Joyce yesterday, aims to save $15 billion over three years, in line with reduced flying activity including fuel consumption savings, and delivering $1 billion per year in ongoing cost savings from FY23 through productivity improvements across the Group.
Airline analysts say some large overseas airlines are making even bigger cuts.
Key elements of the Qantas plan include:
- Reducing the Qantas pre-crisis workforce by at least 6000 roles across all parts of the business.
- Continuing the stand down for 15,000 employees, particularly those associated with international operations, until flying returns.
- Retiring Qantas’ six remaining 747s immediately, six months ahead of schedule.
- Grounding up to 100 aircraft for up to 12 months (some for longer), including most of the international fleet. The majority are expected to ultimately go back in to service but some leased aircraft may be returned as they fall due.
- A321neo and 787-9 fleet deliveries have been deferred to meet the Group’s requirements.
The TWU slammed the plans, saying the airline should hold off until the coming federal government review of extending JobKeeper.
The union cited a survey it said showed 70% of aviation workers had been stood down from their jobs with almost 40% stating they had been left with no income.
“Over 1000 cabin crew, airline caterers, cleaners, baggage handlers, ramp workers, security officials, refuellers and drivers responded to the survey with almost 30% stating they have had to access their superannuation to get by. Almost half of respondents are worried they won’t be able to support their families throughout the crisis while 20% say they are worried they will lose their house.”
TWU national secretary Michael Kaine blamed both Qantas and the federal government for the job losses.
“Before Qantas slashes thousands of workers’ jobs and takes more of its planes down to the pawn shop it should be lobbying the Federal Government for an extension to Jobkeeper and financial support to allow the airline to weather the crisis,” Kaine said.
“The Qantas CEO is very good at walking the halls of Canberra when it suits his agenda yet he is quick to cut jobs and hang workers out to dry. We are demanding that he halt these redundancies until the Federal Government makes an announcement on JobKeeper.
“We have been calling on the Government for months to step in with a national plan for aviation and they have refused. It is because of Government restrictions that aviation was grounded to a halt, yet the assistance and assurances have been paltry.
“Qantas is now making hasty decisions to slash jobs which will affect thousands of families while Virgin is still limping along. Today the IMF is warning Australia’s plans for a good recovery must be accompanied by a careful withdrawal of support. Because the Government is refusing to provide any certainty past September, we are seeing the aviation industry go into free-fall.”
The TWU has called for “aviation keeper” for all aviation workers to be extended beyond September to give workers and companies assurances while planes effectively remained grounded.
Qantas announced:
- Three-year strategy to guide recovery and return to growth in changed market.
- Costs reduced by $15 billion during three year period of lower activity; $1 billion in ongoing cost savings per annum from FY23.
- Around 100 aircraft to be grounded for up to 12 months; some for longer.
- Job losses and extended stand downs to manage long period of reduced flying (especially internationally).
- Equity raising of up to $1.9 billion to accelerate recovery and position for new opportunities. The Qantas Group has announced a three year plan to accelerate its recovery from the COVID crisis and create a stronger platform for future profitability, long-term shareholder value and to preserve as many jobs as possible.
The airline said the immediate focus of the plan was to:
- Rightsize the Group’s workforce, fleet and other costs according to demand projections, with the ability to scale up as flying returns.
- Restructure to deliver ongoing cost savings and efficiencies across the Group’s operations in a changed market.
- Recapitalise through an equity raising to strengthen the Group’s financial resilience for recovery and the opportunities it presents.
Qantas continued:
“Subsequent phases of the plan focus on the increasing ramp up of flying and pursuing new opportunities – including the airline’s ambition for more non-stop international flights.
“The plan is designed to account for the uncertainty associated with the crisis, preserving as many key assets and skills as the Group can reasonably carry to support the eventual recovery. COVID represents the biggest challenge ever faced by global aviation and the Group’s response to the crisis is scaled accordingly. This unfortunately means a large number of job losses across Qantas and Jetstar.
“The plan targets benefits of $15 billion over three years, in line with reduced flying activity including fuel consumption savings, and delivering $1 billion per annum in ongoing cost savings from FY23 through productivity improvements across the Group.”
The cost of implementing the plan is estimated at $1 billion, with most of this realised during FY21.
Announcing the plan Qantas Group chief executive Alan Joyce said: “The Qantas Group entered this crisis in a better position than most airlines and we have some of the best prospects for recovery, especially in the domestic market, but it will take years before international flying returns to what it was.
“We have to position ourselves for several years where revenue will be much lower. And that means becoming a smaller airline in the short term.
“Most airlines will have to restructure in order to survive, which also means they’ll come through this leaner and more competitive. For all these reasons, we have to take action now.
“Adapting to this new reality means some very painful decisions. The job losses we’re announcing today are confronting. So is the fact thousands more of our people on stand down will face a long interruption to their airline careers until this work returns.
“What makes this even harder is that right before this crisis hit, we were actively recruiting pilots, cabin crew and ground staff. We’re now facing a sudden reversal of fortune that is no one’s fault, but is very hard to accept.
“This crisis has left us no choice but we’re committed to providing those affected with as much support as we can. That includes preserving as many jobs as possible through stand downs, offering voluntary rather than compulsory redundancies where possible, and providing large severance payouts for long serving employees in particular.
“As we’ve done throughout this crisis, our decisions are based on the facts we have now and the road we see in front of us. Our plan gives us flexibility under a range of scenarios, including a faster rebound or a slower recovery.
“Despite the hard choices we’re making today, we’re fundamentally optimistic about the future. Almost two-thirds of our pre-crisis earnings came from the domestic market, which is likely to recover fastest – particularly as state borders prepare to open. We have the leading full service and low fares airlines in Australia, where distance makes air travel essential, and diversified earnings through Qantas Loyalty.
“We still have big ambitions for long haul international flights, which will have even more potential on the other side of this.
Edited by Peter Needham
.jpg){kind=tracking}
