Qantas is set to sack up to 3000 staff, sell planes and terminals and cut routes in the biggest shake-up of the Flying Kangaroo’s 93-year history.
The airline’s boss Alan Joyce is expected to reveal the cuts on Thursday when Qantas announces a record half-year loss of more than $300 million for the six months to December 31.
The Weekend West believes Qantas will cut 10 per cent of its 32,000-strong workforce – more than three times the 1000 job losses flagged in December when the airline warned of an underlying half-year loss of $250-$300 million amid the “toughest market conditions it had ever faced”.
Conditions have deteriorated significantly since, prompting Mr Joyce to push for Federal Gov-ernment assistance last week.
Virgin Australia has accused Qantas of trying to get a “free ride” and warned the Government against coming to the airline’s aid.
It is understood the staff cuts will be across-the-board and will focus on management and backroom staff. Qantas is expected to reveal it will sell, then rent back its terminals in Melbourne and Brisbane.
Sources in Dubai and Britain said Qantas would cut services to London and lease four of its flagship 490-seat super jumbos and their pilots to Turkish Airlines, claims that were denied by Qantas last night.
Turkish Airlines did not deny the report but said its board was yet to make a decision.
A Qantas spokesman refused to deny 3000 jobs would go, saying tough decisions were ahead.
“Qantas has flagged the need to make tough decisions as part of strengthening our business, which we will outline next Thursday,” he said.
“For our customers, this won’t change our focus on being one of the world’s best airlines.”
The airline’s staff costs, which are double those of Emirates and Singapore Airlines and 16 per cent higher than Virgin Australia, are a major factor in Qantas losing international market share to low-cost carriers.
Qantas carries just 17 per cent of international traffic into and out of Australia, down from more than 40 per cent in the early 1990s.
Centre for Asia Pacific Aviation chairman Peter Harbison said there would be “lots of bad news” when Qantas released its half-year results.
He said the airline needed to give its staff and Australians a clear vision for the future.
In December, Mr Joyce promised that Qantas would deliver $2 billion in savings over three years and undertake a strategic review of its business.
By: Arabella-Cox - 20th March 2014 at 06:01
A shame. I have flown Qantas quite a few times and found it to be an excellent airline.
By: mongu - 16th March 2014 at 03:01
– Fleet. Short haul fleet planning has been very good, and the decision in the early 2000s to take on a large number of B738’s at good prices (post 9/11 downturn) was a good one. The B763’s had a part to play as well, and they did it well on short haul, although I question if they needed quite so many for east coast runs. I would have dedicated them to SYD/MEL to PER with only a handful of SYD/MEL/BNE routings.
The B763 was not the best choice for regional or long haul. Put simply it lacked the cargo capacity that competitors could exploit and cost very nearly as much to operate as the A330. It was the best choice only until the improved A333 became available.
The B744 was a tough choice. The airline was much criticized for being “anti 777” but to be fair, the 772 was simply a downgauge too far from the 744. They could have added a few 772ER’s but the majority of the B744 fleet would have needed to stay. Maybe the 77W could have made a big difference, but by that time the A380/787 strategy had been put into place. And it was the right choice, too. Just very unfortunate that both manufacturers mucked up.
– Brand. The split Qantas/Jetstar brand makes a lot of sense. It has also been implemented well. OK we do have ongoing disputes as to the extent of QF cross subsidizing JQ, but ultimately it’s all the same group and I’m not concerned with these internal issues. The group lost its way with the Asian (especially HK and Japan) expansion. That was unnecessary and burnt a fair bit of cash.
– Workforce. Too much of it! Too many clock watchers. Some good people, but really not a lean operation for the 21st century.
By: Arabella-Cox - 1st March 2014 at 21:23
How many aircrew?
By: Pacific flyer - 27th February 2014 at 10:13
Actually it is 5,000 full-time equivalent jobs (so inevitably more than 5,000 people, as quite a few are employed part-time), and 50 aircraft to be retired or deferred (including 15 B767’s and 9 B744’s, plus 8 A380’s deferred indefinitely).
Not good news, but sadly predictable. Failure to adapt to changing trends (the swing to B777’s for example) and customer needs.
Compare that to Air New Zealand who today announced a record profit (retired their B744’s in favour of B777’s) and offer an excellent product.
A sad indictment of Qantas management failings.
By: Matt-100 - 22nd February 2014 at 20:31
It’s a tricky one for Qantas, it would seem everyone’s eating their breakfast, lunch… and dinner. For those looking for impeccable service, they now have an array of Asian carriers to choose from all offering plentiful connections to Eruope and mainland Asia (Singapore, Cathay, and even to a certain extent nowadays Thai and Malaysian) – and for those looking for bargain seats they now have an array of low cost carriers (Scoot, Air-Asia X, JetStar [okay, yes. Owned by Qantas]) but all this growth from SE Asian airlines has really hit the kangaroo hard.
I assume the 20 A380’s were a last ditch attempt to add capacity to their ailing market share, but with no long-term strategy in place stating what to do with them, it was really like “we’ll order 12 now, perhaps in 8 years we’ll know what to do with them?”… An ‘it seemed like a good idea at the time’ event which makes the airline appear shockingly mismanaged. It was only as recently as 2006 that a further 8 options were extended, still no alarm bells flashing Qantas?
The Emirates deal was another example of Qantas’ slapdash approach to coming up with solutions. What did Qantas gain? Links to Europe? Hardly, Emirates are the ones who fly the planes to all the destinations so they’re the ones who get their hands on the passenger’s cash. Feeder traffic to their domestic market? Hardly, Emirates’ metal already fly direct to 5 Australian cities – so unless you’re looking to fly to somewhere a little off the beaten track (Alice Springs, Longreach etc), which is unlikely, there is no feeder traffic.
I hate to say it but it doesn’t look good for Qantas, and I have nothing against the airline’s product itself (I actually greatly admire it), but Australia as a country is just too far out to make it financially viable for Qantas to offer the same breadth of destinations to the west the Middle Eastern carriers can or to mainland Asia and the US that the Asian carriers can.
Because of the airline’s inability to “hub”, it can’t fully exploit its economies of scale and drive prices down. So prices are higher and choices are lower :applause:
Qantas will continue to decline until it reaches a size the country can sustain (it is simply too big), perhaps they should take a look across the Tasman at Air New Zealand – New Zealand is equally as ‘out of the way’, if not more so, and the country has a population of just 4.5 million but the airline is growing from strength to strength.
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February 22, 2014 at 12:13 am