Australia's Qantas axes another 400 staff

SYDNEY: Australian flag carrier Qantas on Thursday announced the slashing of 400 maintenance jobs as part of a restructure aimed at cutting costs and shifting focus to Asia.

Qantas said the cuts would involve 150 staff and 250 contractors, as the "Flying Kangaroo" consolidates its maintenance operations to achieve savings under heavy competition, fuel costs and the strong Australian dollar.

Lyell Strambi, chief of Qantas's domestic arm, said the modernisation of the airline's fleet had significantly reduced the need for engineering staff, with newer-generation aircraft needing less maintenance, less often.

"The Qantas group fleet age is at its lowest level in 20 years, with 122 new aircraft joining the fleet in the past four-and-a-half years," Strambi said.

"I believe we have some of the most highly skilled and capable engineers in the world," he added.

"Unfortunately we just have too many for the work we have right now and the work we expect to have in future."

The contractors and a small number of Qantas staff had been working on the refurbishment of nine Boeing 747s and the carrier said most of the rest of those being sacked were from "overstaffed" facilities in Sydney.

"Aviation is an extraordinarily competitive industry and we have the added pressures of the high Australian dollar and high costs relative to the rest of the world," said Strambi.

Qantas estimates that its cost base in heavy maintenance is more than 30 per cent higher than its competitors, who Strambi said "do the vast majority of their maintenance overseas".

"We must close this gap to secure Qantas' future viability, and this restructure will assist in making Qantas maintenance facilities in Australia more competitive."

Qantas posted its first loss since privatisation in 1995 back in August, plunging A$244 million (US$254 million) into the red, a massive reverse from a net profit of A$250 million in the previous 12 months.

Standard & Poor's downgraded the airline's credit rating from BBB to BBB- on the figures.

Qantas announced 500 maintenance job cuts back in May, closing down its Tullamarine operations in Melbourne and axing staff at nearby Avalon to consolidate engineering into two facilities in a bid to cut costs.

Also in May, Qantas split its loss-making international arm from its domestic business in a bid to reverse its fortunes, also forging a mammoth tie-up with Emirates it hopes will stem losses and help its push into Asia.