QANTAS to Cut 10% of Executive Jobs, Cut International Flights
SYDNEY, Oct 8 Asia Pulse - Qantas will shed 10 per cent of executive jobs and cut international services as it tries to address a downturn in the global aviation industry.
With no increase in demand for its international services expected for another six months, Australia's largest airline had to act now, Qantas chief executive Geoff Dixon told staff in an internal memo today.
"We are seeing a downturn in our international operations and no increase in forecast demand for the next six months," Mr Dixon said.
"While the impact is not yet as severe for Qantas as for other overseas carriers ... it is prudent we act now!"
The Qantas measures follow massive job cuts at a number of international airlines after the downturn in international travel after the September 11 terrorist attacks in the United States.
Mr Dixon said there would be an overall reduction of Qantas' international services led by the cancellation of two daily flights to the United States.
Qantas would also implement a freeze on all discretionary expenditure and non-operational capital expenditure.
Mr Dixon said the airline would undertake a further review of executive staff members seeking a 10 per cent reduction, in most cases by attrition, and implement a policy of no across the board salary increases for executives.
That was in addition to a manpower review "to ensure any additional capacity acquired meets our labour productivity targets" and a freeze on the appointment or replacement of contractors and consultants and any non-operational staff.
The latest cutbacks come after Qantas slashed 1,500 jobs and suspended some international routes in February this year to combat spiralling fuel costs, a weak currency and increased competition.
Underperforming international routes including China and Canada were axed then and about 220 of the 1,500 jobs cuts were executive and middle management staff.
But Mr Dixon warned today that worse may be to come if the global aviation downturn deteriorated.
"We may have to extend these measures if the current circumstances deteriorate further," he told staff.
A large number of international airlines have cut capacity and staff numbers since the terrorist attacks, with the International Transport Workers Federation putting the total - as of Friday - at almost 135,000 jobs.
Mr Dixon had already warned staff of the world aviation industry crisis with further mass layoffs and the partial collapse of two major national airlines, Swissair and Sabena.
"Almost every airline in the world now finds itself in severe financial difficulties," he said in a memo to staff last Thursday.
"Loads have suffered a severe downturn whilst costs are soaring, particularly for insurance and security.
"Qantas is also under extreme pressure, and the impact on us is substantial. Our most profitable market over the past three years, the United States, has been badly affected and we are seeing considerable uncertainty in other international markets."
Mr Dixon said the escalation in Qantas' costs was "in no way alleviated by the collapse of Ansett".
He told staff Qantas saw no short-term benefits from the collapse of Australia's second largest airline and rejected suggestions that Qantas was profiteering from the situation.
"We have carried at great cost to ourselves about 50,000 Ansett passengers free of charge and another 45,000 at greatly reduced discounts," the Thursday memo said.