Interpac Business and Migration Solutions Melbourne Australia

(Aug.16)

Unions are gearing up for a fight against Qantas, following the airline's announcement it plans to cut up to 1000 jobs and launch a premium airline based in Asia and a new budget airline in Japan.

"This announcement flies in the face of all that makes Qantas great, that is its staff," Australian Services Union (ASU) Assistant National Secretary Linda White said.

The ASU - the largest union operating at Qantas - believes a "significant number" of its members will be affected, including those who work in "safety-sensitive areas" of the airline's operation. The union also covers airport check-in workers and freight workers.

Union may take legal action over plans by Qantas to expand operations in Asia.

Ms White said their members would not be "flat footed" about the announcement.

"We intend to fight this ... ASU members strongly believe that what makes Qantas great is it is the spirit of Australia," she said in a statement.

Qantas chief executive Alan Joyce today unveiled a five-year plan that aims to boost the airline's profits and combat the company's cost base, which he says is about 20 per cent higher than that of key competitors.

As part of the plan, there will be network changes to flights, older aircraft will be retired and about 1000 jobs may be lost, Mr Joyce said.

"The areas affected include management positions, pilots, cabin crew and engineering," Mr Joyce said in a speech.

He said most of the jobs lost would be voluntary redundancies, with some pilots to be offered leave without pay to take up other opportunities.

The Trujillo of Qantas?

Australian and International Pilots Association spokesman Nathan Safe predicted that 100 to 200 pilots stood to lose their jobs as safety excellence was ‘‘flushed down the toilet’’.

‘‘It’s probably the thin end of the wedge in an ideological battle to shift the labour force to Asia over time,’’ he told reporters near Sydney airport.

Mr Safe, a Qantas pilot, said Mr Joyce would be remembered like Telstra’s former controversial chief Sol Trujillo.

‘‘Qantas employees learning that they’re going to lose their jobs, live from a five-star hotel press conference from a CEO that is out of his depth and out of touch with employees, his company and his country,’’ he said.

Mr Safe called on the federal government to act.

‘‘The federal government for instance should be doing a better job here,’’ he said. ‘‘We think they have a clear responsibility to ensure that the Qantas Sale Act provisions are ensured.’’

Mr Safe said Qantas would not be burdened with higher fuel costs if it had replaced older, less efficient aircraft years ago.

‘‘Why is Qantas mainline international burdened with 20-year-old aircraft that burn more fuel than our competitors’ aircraft?’’

Engineers mull legal action

The aircraft engineers union will consider taking legal action against Qantas's plans to launch a premium airline based in Asia and a new budget airline in Japan.

Australian Licensed Aircraft Engineers Association Secretary Steve Purvinas said the airline's move could effectively breach the Qantas Sale Act, which called for the airline to keep the majority of its facilities in Australia when it was privatised.

"The move to open up a new premium airline in Asia is clearly a step by the airline to avoid its obligations under the Qantas Sale Act," Mr Purvinas said.

"In due course we'll make a decision on whether we should take Qantas to the Federal Court for breaching the Qantas Sale Act," he said, adding the union was concerned about the job losses outlined by the airline.

'Very disappointed'

The union's president, Paul Cousins, said members were not consulted about the move.

"We're very disappointed," he told ABC Radio. "They're considering job redundancies across the network of Qantas airlines, both international and domestic, and that, obviously, concerns us.

"We're also extremely disappointed that Qantas continues to fund start-up airlines across the network and across the globe without actually continuing that investment in Australia."

Mr Cousins said the union thought job losses would start at about 150 but he expected that number to grow over time.

There was some relief in Qantas's statement that it would try to minimise compulsory redundancies in favour of voluntary redundancies.

"It gives us some solace that individuals [who] may wish to leave the business at this time will be given that opportunity," Mr Cousins said. "Unfortunately, what it does though is cut the future out for people coming into the business."

He said he did not expect the new routes to create any job opportunities.

"I would say that all those job opportunities will go to the prospective inhabitants of the countries where they decide to set these airlines up and pretty much the employment status and employment conditions will be of those countries."

'Spitting in the face of families'

NSW secretary of the Transport Workers Union, Tony Sheldon, said the announcement was "spitting in the face" of Australian families.

"To announce that they are going to have a 'kangaroo cull' of the Australian workforce while expanding its operations in Asia is spitting in the face of Australian families who have supported this airline for so long," he said.

He said shareholders should be "drastically concerned" about the direction of the company.

"Qantas [is trading off its] world-wide good name [and it] will come at a price when you start offshoring the safety, training and accountability systems to Third World nations," he said.

Mr Sheldon said it would be possible for the company to expand overseas using Australian labour and continue to be extremely successful.

"They do not have to be this greedy and short sighted."

Pilots' warning

The Australian and International Pilots Association (AIPA) said pilots had been warning about the move to expand into Asia for months.

"Strip away the spin ... 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," AIPA president Captain Barry Jackson said in a statement today.

Captain Jackson said the federal government needed to look at the implication of the announcement and its legitimacy under the Qantas Sale Act.

"The Qantas Sale Act was established when Qantas was privatised to prevent a CEO like Alan Joyce from doing something like this, because it is not in the interest of Australia or Australians."

The union, which has been involved in protracted negotiations with Qantas over pay and job security, said it would continue to fight.

"AIPA will continue to insist on a Qantas flight and Qantas pilot clause in the new enterprise agreement, because we believe that when you board a Qantas flight, you are entitled to Qantas pilots on the flight deck," Mr Jackson said.

"Until we get an assurance from Alan Joyce that future Qantas flights will be operated by Qantas pilots instead of outsourced and offshored alternatives we will be doing everything we can to stop this destructive strategy for Qantas's future."

Swan blames patchwork economy

Federal Treasurer Wayne Swan attributed the job losses to Australia's patchwork economy.

Mr Swan said Qantas's decision was a result of a deterioration in demand for some international routes.

"What we are experiencing here are the challenges that do come from a patchwork economy," Mr Swan told reporters in Canberra.

Mr Swan said the immediate issue for Qantas was to look after workers.

Transport Minister Anthony Albanese said the Qantas decision was regrettable.

"But the government acknowledges that this is a commercial decision taken by Qantas," he said in a statement.

Meanwhile, Senator Nick Xenophon said he would seek support for a bill to force Qantas to pay foreign-based crews at the same level and with the same conditions as those based in Australia.

"If you are employed by an Australian airline, flying on an Australian registered plane, you should be employed under Australian standards," Senator Xenophon said.

Tourism group welcomes move

Lobby group the Tourism and Transport Forum (TTF) welcomed the restructure, and in particular the launch of Jetstar Japan and a premium Asian airline, saying it would boost international visitor numbers to Australia.

"Some interest groups are saying that the sky might fall in - TTF says quite the opposite," TTF chief executive John Lee told reporters in Sydney.

"Australia is the world's biggest island and we need aviation to work and grow so we can actually have tourism prospering in this country.

"For tourism to grow you actually need more international tourists coming to Australia via aeroplanes, and today's announcement will provide new opportunities."