Qantas Airways (QAN) has confirmed it is closing its heavy maintenance base at Avalon, near Melbourne, at the end of March 2014 and will consider moving the maintenance work on its 747 fleet offshore.
The base employs around 300 people and services the airline's soon-to-be retired Boeing 747s.
In a statement to the Australian Securities Exchange, Qantas domestic chief executive officer Lyell Strambi said a comprehensive review of the base showed there was no workable solution to continue operating the sub-scale maintenance facility.
“Qantas is gradually retiring our fleet of Boeing 747 aircraft, which means there is not enough work to keep our Avalon base viable and productive,” Mr Strambi said.
“Over the next four years there would have been up to 22 months with no scheduled maintenance at Avalon. No business could afford to continue operating a facility under those circumstances.
“After reviewing all of the options, the only realistic answer is to close Avalon and have the maintenance performed on our 747s at another facility."
Mr Strambi said the airline's next step would be examining where maintenance work would be performed.
"As well as assessing existing onshore facilities we will also examine specialist Boeing 747 maintenance providers including in Germany, Singapore, Hong Kong, United Kingdom and United States," he said.
"Any facility would need to meet Qantas’ safety standards and be approved by Australia’s safety regulator."
Qantas exploring options with impacted workers
Mr Strambi said Qantas will explore redeployment opportunities for the 53 impacted Qantas employees and provide generous redundancy packages.
Qantas will also work closely with Forstaff, which employs 246 contractors at Avalon.
“We held numerous meetings with unions and employees as part of the eight-week review however none of the solutions that we explored or that were put forward would provide a sustainable future for the Avalon facility or our employees,” he said.
Qantas last month flagged a review of its aircraft maintenance work at Avalon.
At the time, Qantas' domestic chief executive officer Lyell Strambi said in a statement the Avalon maintenance centre was becoming "sub-scale and inefficient".
The Avalon review follows 263 redundancies at the site announced in November last year and the closure of the Tullamarine heavy maintenance facility, which resulted in the loss of 422 jobs.
It's another blow for the struggling Geelong region, following the decision by Ford to close its Geelong plant in 2016, costing 510 jobs; Target slashing about 200 jobs; and Shell flagging the sale of its Geelong refinery, threatening some 450 local jobs.