Qantas to cancel 3000 jobs
John Durie | July 17, 2008
QANTAS is set to bring forward a planned statement unveiling job cuts that are now tipped to run as high as 3000, but of course not all of those will be redundancies.
The job cuts, to be announced as early as tomorrow and first flagged in The Australian last Friday, will be the biggest since an equal number of staff positions were cut after the SARS outbreak of 2002.
High fuel costs are the direct cause and company boss Geoff Dixon has gone out of his way to try to explain to his workforce that the world has truly changed when oil prices rise by 45 per cent in seven months.
Just how the striking engineers react is another question, when you consider they have imposed an overtime ban, seeking 5 per cent pay increases.
The union adopted a clever strategy of limiting the impact of the ban to overtime so the troops got their normal pay, but the airline was forced to cancel flights, thereby testing the loyalty of its business-customer base.
Now is not the time to upset a customer base that is paying top dollar for seats and at the same time facing massive dislocation due to flight cancellations.
Dixon is taking a hard line refusing to accommodate the wage claims, noting they would add at least $360 million to the company’s wage bill if applied across the board.
The job cuts follow capacity cuts by an airline that has already chopped 10 per cent of its capacity and so doesn’t need as many people to service fewer flights.
While economies outside the US are holding up, higher fuel prices will hit demand at some point, putting more pressure on the airline.
From a business perspective the plan is to cut operations to a bare minimum, which sets it up perfectly for a takeoff when the economy picks up and fuel prices inevitably fall.
Based on a fuel price of $US130 a barrel, Qantas’ fuel bill in the 2009 financial year will be $5.7 billion, three times
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Note the heading
the key word being CANCEL
I hear Newport Aviation is recruiting maybe some of you might need to line up.