Home' Asian Aviation : AAV September 2011 Contents 20 AsianAviation | SEPTEMBER 2011
last 747-400ERs. Such a move significantly reduces
capital invested in the International business – by about
A$2.3 billion (US$2.5 billion) based on current list
prices for the aircraft.
Four out of 26 747-400 jetliners will be retired this
financial year, while some 12 A380s will be in ser vice
by the end of this calendar year. Meanwhile, the airline
is refitting nine of its 747s with the A380 interior,
including the same seats and new Panasonic in-flight
entertainment systems, with the first aircraft to be ready
within three months .
“Over the coming decade, our fleet strateg y will deliver
a simplified, highly flexible fleet of next-generation
aircraft capable of meeting our needs while driving down
operating costs,” Joyce said.
Alongside these changes come inevitable
redundancies – this time totalling 1,000 job cuts. These
will include manag ement positions, pilots, cabin crew
and engineers, with Joyce expe cting the majority of the
redundancies to be voluntary.
The airline will also attempt to preser ve links with
some skilled personnel, Joyce said. For example,
some pilots may be offered unpaid leave to take up
opportunities elsewhere in the group. Expansion in Asia
will also offer opportunities, the CEO said.
“This is the way of the future for smart Australian
companies. Like our leading mining , finance and IT
companies, as an Australian company we can take our
unique skills and knowledge to the world and see the
benefits flow back to us,” said Joyce.
He also stresses that despite the moves to Asia, Qantas
will continue to be “an Australian company, owned by
Australians, with the vast majority of our operations
based in Australia”.
The news has not gone down well with unions, which
were already at loggerheads with management over
new deals and conditions, with catering employees,
engineers, ground staff and pilots already considering
or conducting industrial action .
The Australian and International Pilots Association
(AIPA), which represents Qantas pilots, is already
seeking a Qantas flight/Qantas pilot clause in their
ongoing negotiations, under which all Qantas flights
must be operated by Qantas pilots. The pilots fear
that the airline’s manag ement plans to outsource flight
duties by basing operations in Asia . Qantas pilots have
been taking action since July, starting by making public
announcements on their flights in an effort to increase
public awareness of the issue.
In late Aug ust, the Australian Licensed Aircraft
Engineers Association became the latest union to
take action, including work stoppages and overtime
restrictions, following the collapse of talks regarding a
new enterprise agreement.
Unions and MPs met in Canberra following Joyce’s
announcement to protest against the restructuring
plan. Unions have questioned Qantas claims that its
international division is losing A$200 million a year and
warn that the 1,000 job losses could turn into 6,000 jobs
directly and indirectly in the industry.
The unions also fear that the new premium airline
in Asia will be the start of a drive to send jobs oversea s,
questioning whether Qantas can still call itself an
Australian carrier. Unions have called on the government
to investigate whether the plan would put Qantas in
breach of the Qantas Sales Act.
“ The federal government needs to look very
caref ully at the implications of Alan Joyce’s
announcement for the Australian public,” said AIPA
president Captain Barry Jackson.
“Strip away the spin and eye-watering amount spent
on advertising this morning ,” he said, referring to the
reported A$2 million the airline spent on full-page
advertisements in all major Australian newspap ers
on the day of the announcement, “and what’s left
is exactly what Qantas pilots have been warning of
for months – a shift of Australian Qantas operations
into Asia to start employing people working to Asian
conditions and standards.”
The financial market has been largely positive in its
response to Joyce’s plans, acknowledging that something
had to be done. The restructuring plan will allow the
airline to capture Asian growth and position itself
to compete effectively in the future, analysts believe,
although the market is waiting with interest for details
of the new Asian premium airline.
As the Sydney-based consultancy Centre for Asia
Pacific Aviation (CAPA) pointed out: “ There are still
some major areas of detail to work through, but the
foundations have b een set for a new, more focused
international business to emerge.”
“Qantas’s share price has fallen almost 40 percent over
the past 12 months, putting it last in a p eer assessment
with Singapore Airlines (down 30 percent), Cathay
Pacific and Virgin Australia (each down 15 percent).
Qantas’ shares have risen as much as 4.2 percent in early
trade on 16 Aug ust after the announcement – an early
endorsement from the market at least that the airline
can get back on track under Joyce’s plan,” CA PA said.
“ There are still some major areas of detail to work through,
but the foundations have been set for a new, more focused
international business to emerge.” – Centre for Asia Pacific Aviation
Qantas’s plans to offer a simplified, flexible fleet of next-generation aircraft.
2/09/11 5:52 PM
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