SYDNEY – On Monday, Qantas, the Australian flag carrier said it will cut 500 jobs in its engineering operations, and heavy maintenance departments, as part of its plans to restructure the company to cut down on costs.
This move comes after am 83% slump in the companies first-half net profit up to December, and its announcement that it will postpone, the delivery of two A380 super-jumbos for three years as part of its spending cuts.
The 55 jobs to be discontinued are equivalent to 10% of its maintenance staff – at Tullamarine, 422 jobs will be cut, and 113 at Avalon.
Alan Joyce, the struggling carrier’s chief executive, says that there wasn’t enough work to maintain three different facilities and when you take into account new technology, it equates to a 60% reduction in the companies’ maintenance requirements over the following seven years.
He also said that similar to the manufacturing industry, aircraft maintenance is a labour and capital-intensive division, and Qantas’ cost base in its heavy maintenance sector is 30% more than its competitors. So the company has to close the gap to secure its future success and vitality.
By consolidating, Qantas will save up to Aus$100 million or US$99 million yearly, with one-off costs from closing Tullamarine. Cutting out the redundancies will amount to around Aus$50 million.
Joyce tried to soften the blow by insinuating that there is a lot of work at other companies for experienced engineers, especially with the boom in Australia’s mining industry.
Even with the job cuts, Qantas employs close to 30,000 workers in Australia.