A message from Samantha Taranto - Building a Stronger Qantas
Today Alan Joyce announced the Qantas Group’s 5 year plan to transform our International business. I am writing to you to highlight the changes that will have an impact on our department.
Our aim is to be one of the world’s best premium airlines, setting global standards for long haul travel, while delivering attractive financial returns.
As I am sure you know, the economic sustainability of Qantas International is critical to the whole Qantas Group, however, it has suffered significant financial losses and a substantial decline in market share. These financial losses have occurred due to the significant deregulation of the Australian market, Australia’s geographical location, an influx of competition and a cost base that is higher than our competitors.
Qantas International lost around $200 million in Financial Year 10/11. If we stand still and do nothing about the problems we face with this part of our business, the ultimate outcome will be the closure of our division.
Our five year plan has the objective, first, of returning Qantas International to profitability in the short term. In five years, the Qantas flying businesses, both domestic and international combined, will exceed the cost of capital on a sustainable basis.
The plan
Opening gateways to the world.
From April 2012, we will expand our partnership with British Airways. This will see the consolidation of our Qantas flights to London through Singapore on our A380s. We will also partner with British Airways to fly onwards from Bangkok and Hong Kong to London. This is part of our strategy to reduce loss-making, asset intensive flying, while continuing to provide great connections to Europe.
For Australian based International Cabin Crew flying on either our A380 or B747 fleet from April next year the only Qantas flights operating to London will be on the A380 via Singapore. As a result Australian based cabin crew will no longer be slipping in London on a planned basis.
In addition to the changes, in April we also will commence operating the Singapore-Frankfurt-Singapore sector by both Cabin Crew UK (CCUK) and Australian based crew. This will be determined on a bid period basis dependant upon resources and will assist in improving the profitability of this route.
For our crew based in London employed by Cabin Crew UK (CCUK) this plan will see the destinations you fly change. You will now be flying to Singapore (twice daily A380 services) and also Frankfurt, which may fluctuate on a bid period basis dependant upon resources. Crew will no longer slip in Bangkok or Hong Kong as these services will now be operated by our code share partner British Airways.
In April our Sydney to Buenos Aires route will be replaced with Sydney Santiago. Santiago is a hub city for booming South America, as well as an important destination for Australian business.
As a result of these flying reductions, we require 240 fewer International Cabin Crew than we currently have. Due to the voluntary redundancy package offered earlier this year, where 337 crew submitted a final expression of interest, we are not currently in a position where any crew member will lose their employment as a result of these changes.
Some of the other group strategies that do not directly impact you include:
Growing with Asia.
The opening of a new premium branded airline based in Asia and also creating a Jetstar Japan Franchise.
Being best for global travellers.
We’re spending nearly $400 million on benefits for our Qantas International customers including new lounges, A380 standard product and improving our loyalty proposition.
Building a strong, viable business.
This includes ordering 110 A320s, deferring six A380s to Financial year 2019 (this will reduce the capital invested), nine reconfiguring B744s and retiring four B744s.
As you can see there are many changes needed to transform our international division and many of you will be unaffected by these. However, some of you may be affected. What I can confirm is that while we are seeing reductions on our London services, we still have considerable destinations in order for you to build your roster.
I know many of you bid for trips to London and Frankfurt in order to visit family and friends. The changes to London and Frankfurt flying are eight months away and this will give you time to consider how these changes are going to affect your access to friends and family in the UK. For the next six months we will open opportunities for all Australian based crew to take Special Leave without pay and join our London base on a two year secondment.
We have two A380s arriving later this year and will open opportunities for all International Cabin Crew to transfer to the A380 in both our Melbourne and Sydney bases on the original transfer terms outlined in EBA8.
We closed the Final Expressions of Interest for Voluntary Redundancy earlier this month and while we do not require any more crew to leave our department, I understand that some people’s decision not to submit an Expression of Interest may have changed as a result of these announcements. For this reason, from tomorrow until 1 September 2011, we will open the opportunity for crew to submit a Final EOI to take redundancy.
I fully support this strategic direction. It will absolutely transform our business. These changes will help us become a sustainable, profitable business, which in turn provides job security.
If you would like to understand the finer details of our plan, your management team will be holding information sessions in all of our International crew bases as well as Los Angeles, Hong Kong, Bangkok and Singapore. Please try and attend one of these sessions or contact anyone in the management team with your questions.
The strategic changes that we’re embarking on are just the beginning of a lengthy process that will see us as a profitable division of the Qantas Group.
Cabin Crew have always been critical to the success of Qantas with the automation of our booking processes and airport experience, this is even more the case. As a group, you are resilient, flexible and have tremendous pride in working for Qantas.
As we move through our plan, I really need your support. You are the key to customer loyalty and without loyal customers our plan will not succeed. While some of you may have only worked with us for a short time we have some crew who have dedicated 46 years to our department. During these years there have been significant changes from fleet types to destinations and not to mention product innovation.
I have worked in the Cabin Crew Department for seven years and during this time I have seen that through business change you always put your own concerns aside and care for our customers first. I have complete confidence that you will continue to do this, as we embark on our plan to transform our business.
I hope you can join me for a dedicated crew voice call at 3pm AEST today, or a special London call tomorrow at 1500 London time. An email will follow with the call and upline information session details.
Kind regards
Samantha Taranto
Executive Manager Cabin Crew