Qantas slashes routes and warns staff of tough times
By Darren Goodsir
Despite benefiting massively from Ansett's collapse, Qantas last night joined the ranks of international airlines affected by the September 11 terrorist fallout by announcing flight cancellations to the United States, a 10 per cent cut to its executive ranks and an immediate jobs freeze.
With overseas flight bookings plummeting and grim forecasts for the next six months, Qantas has also ordered no salary rises for its top bosses.
It has also stopped the appointment or replacement of its contractors, consultants and non-operational staff.
After initiating a productivity review and an October 22 summit with the 11 unions representing the 30,000-strong workforce, Qantas's chief executive, Geoff Dixon, said: "We may have to extend these measures if the current circumstances deteriorate further.
"We are not immune from the global problems."
Qantas has taken 90 per cent market share in the past three weeks, but this is likely to settle at 70 per cent of domestic passengers in the long term.
Just after Ansett's grounding, it speculated that as many as 6,000 displaced workers could find jobs through the added domestic routes and the launch of the low-cost international carrier, Australian Airlines.
But even with this growth, Qantas argues the global aviation downturn - and the prospect of huge price rises for insurance and security - means it must tighten costs or cut jobs.
It is arguing that, given the birth of Ansett Mark II - where the ACTU has agreed to inferior "temporary conditions" for workers to save costs - Qantas has to "achieve a level playing field with our competitors".
In a note to staff, Mr Dixon said he estimated Virgin Blue flight and cabin crew rates were 30-35 per cent lower than at Qantas and ground handling and airport check-in rates were 14-18 per cent lower.
"We cannot have a situation where the unions hold firm on one set of conditions for Qantas, while agreeing preferential terms with our competitors," he said. "We will just have to make changes."
Across the Tasman, Air New Zealand announced a 10 per cent loss in routes and its acting chairman, Dr Jim Farmer, said
there would be job losses. These were "likely to be lower than the predictions of between 1,000 and 1,500" and he hoped the cuts could be attained by the taking of accumulated leave, and attrition rather than retrenchments.
In a separate statement, Air New Zealand - soon to be government-controlled - said it would halve directors' fees to $NZ45,000 ($37,000) a year, and cut the chairman's fee by $NZ70,000 to $NZ90,000.