Sydney's pain is Avalon's gain
Fri "Melbourne Age"
Sydney's pain is Avalon's gain as more work flies in
By Jane Holroyd
March 10, 2006
LINDSAY Fox has described the Qantas decision to shift its major Boeing 747 maintenance operations to Avalon Airport as a coup for Victoria and the Geelong community.
Speaking to The Age from Vietnam, the trucking magnate played down the benefits to his company Linfox, which bought the Avalon site in 1997.
"Forget about Linfox. The impact for Victoria and for Geelong is fantastic," Mr Fox said, pointing to job gains at the airport near Geelong.
Qantas chief executive Geoff Dixon said yesterday that while the Sydney closure would cut 480 jobs from its maintenance workforce, redeployment could reduce the number to about 340 if workers transferred.
"However, workplace efficiencies recently negotiated with the workforce and Avalon will enable us to start immediately to achieve the productive scale necessary to compete with offshore options," he said.
Qantas has had a maintenance base at Avalon for seven years, with most work concentrated on the airline's fleet of six Boeing 747-300 aircraft. But the Sydney base is larger, catering for a fleet of 30 newer 747-400 class aircraft.
"Historically speaking we have always been long-term planners," Mr Fox said.
"For years Avalon was a sleeping giant and now it is the 10th-largest passenger terminal in Australia."
Mr Fox's son David, who is managing director of Linfox's airport division, said the company had been talking to Qantas for months about expanding its Avalon operations.
He said he learnt of the decision yesterday.
Avalon general manager Tim Anderson said it was a brilliant outcome resulting from hard work.
"We are very aware of the enormous cost pressures airlines are facing and we have worked very hard to provide them with high quality services at a competitive arrangement," Mr Anderson said, pointing to the airport's partnership with Qantas offshoot Jetstar.
Jetstar, which now has about 13 per cent of the domestic air passenger market, has been running flights from Avalon since mid-2004 and made a before-tax profit of $27.7 million in the half-year to December 2005. Experts have estimated Avalon is now worth 10 times what Linfox paid for it, believed to be about $10 million.
The Geelong business community yesterday was excited about the Qantas announcement. Chamber of Commerce executive director Lawrie Miller said 450 skilled maintenance workers had lost their jobs when Avalon's former operator, AeroSpace Technologies of Australia Aircraft Services, closed in 1996.
Despite Geoff Dixon emphasising a preference to trans- fer Sydney staff to Avalon, Mr Miller expressed hope that jobs would be created in Geelong.
But a redeployment of Sydney workers would also benefit the area, he said. "They could make a lot of money by selling their houses (in Sydney) and I think they would find the lifestyle compares more than favourably," he said.
====================================================
Fri "Melbourne Age"
Threat to Qantas Melbourne jobs
By Stephen Moynihan
March 10, 2006
CLOUD hangs over the future of hundreds of Qantas employees at Tullamarine after the airline yesterday launched a six-month review into its local maintenance operation.
The Tullamarine announcement came on the same day that Qantas confirmed it would axe 480 jobs from its 747 heavy maintenance plant in Sydney, as part of a massive reorganisation and cost-cutting operation.
But the airline has backed away from the threat of immediately transferring up to 2500 jobs offshore, and has moved to allay union concerns by expanding maintenance operations at Avalon, near Geelong, and Brisbane.
As a result of the Sydney plant cuts at the end of May, about 70 new jobs will be created at the Avalon 747 maintenance operation — but 60 of these will be engaged through a labour hire firm and will not be employed as Qantas staff.
The airline says it hopes to reduce redundancies in Sydney through transfers to Avalon and Brisbane.
Unions described Qantas' decision as "bittersweet" and have said there will be no immediate industrial action to interfere with the Commonwealth Games.
The review at Tullamarine is part of a plan to slash $100 million a year in costs across its engineering operations. The heavy maintenance facility of the airline's narrow-body fleet at Tullamarine will be reviewed.
More than 1100 workers are employed by Qantas at Tullamarine, with 450 of them working in the heavy maintenance on the narrow-body plane fleet. The airline has hinted that maintenance on the airline's 737 fleet could be shifted to New Zealand.
Australian Workers Union secretary Bill Shorten said the situation at Tullamarine would be monitored closely. He said the "jury is still out" on whether job cuts were likely. "I think that Qantas has flagged a review with no guarantees at the end of the review about what the outcome is," Mr Shorten said.
"We're trying to do a wages agreement and Qantas want concessions and by the same token they then say there's no certainty you'll have your job anyway, so I suspect there's as much mood to negotiate good redundancies packages."
Conditions for workers at Tullamarine were "superior" to those at Avalon, Mr Shorten said.
Engineers at Avalon build up their overtime pay in a "bank" from which they are paid when they are stood down during quiet periods.
Overtime pay has become a crucial battleground between maintenance unions and Qantas in current enterprise bargaining negotiations.
Unions claim the cut in overtime provisions Qantas is seeking will result in a 30 per cent pay cut.
Mr Shorten said the union wanted to know what benchmarks the airline was trying to reach as it aimed to reduce costs and increase profits.
"When it comes to the senior executive wages and conditions, they benchmark themselves against New York and London," Mr Shorten said.
Although 480 jobs will be cut, about 2900 engineering staff will be retained at Sydney and all current apprentices will be kept on.
Qantas chief executive Geoff Dixon said the airline had to be competitive in every area and ensure profitable operations at a time when oil prices were expected to rise above US$60 a barrel.
Mr Dixon said the airline had received no inducements from any governments to keep maintenance works in Australia. While he said it was a regrettable decision, there was very little room to expand at Sydney Airport, which has been home to the facility for 55 years.
Qantas executive general manager of engineering David Cox told The Age the transfer of heavy maintenance work was a boon for Victoria. "This is a major opportunity for Avalon and obviously it will be up around the 800 people. That's a big engineering business in Australia," Mr Cox said. "It's got good facilities, it's got room to expand if we need to and that's why it's been chosen to do this work for us."
Avalon has already been used for heavy maintenance work, as well as for projects to refit the Qantas fleet.
"We could pretty well move in and get on well with life and that's one of the things that made it attractive," Mr Cox said.
The airline is striving to meet costs savings of between 15 and 20 per cent with an in-depth review set to begin in June next year and be finalised in June 2008.
If savings are not made, the airline may reconsider a move to send maintenance to Asia.
No decision has been made on the heavy maintenance works for the new 787 Dreamliner and the giant Airbus A380, but it looks likely that these will undergo major services off shore.
Heavy maintenance for the airline's fleet of A330s is done overseas but the airline has hinted at the possibility of it being transferred to Australia if cost savings are made.
Mr Cox said productivity and on-time performance at Avalon was "very good" and the enterprise agreement with workers was one of the positive factors for its selection.
With MATHEW MURPHY, SCOTT ROCHFORD
============================================================ ==