UNIONS are bracing for forced redundancies at Qantas by the middle of next year if air travel does not recover.
Qantas's decision to review the number of first- and business-class seats on its long-haul fleet has been interpreted as a sign of the seriousness of the slump in corporate traffic, raising doubts about whether the airline expects demand for seats at the front end of aircraft to fully recover.
The Board of Airline Representatives, on behalf of international airlines flying to and from Australia, including Virgin Blue and Qantas, said yesterday it could take between six and 12 months before there was a recovery in business traffic.
The international flight attendants' union said it had told its members to prepare for compulsory redundancies by the middle of next year in the absence of a substantial recovery.
So far Qantas has resisted cutting cabin crew from its Australian workforce, instead opting for measures such as leave without pay, a shift from full-time to part-time work, and staff taking long-term leave.
The union said the latter measure had almost been exhausted.
"If the situation continues for another six months or so ... then we are looking at a very serious situation," the divisional secretary of the Flight Attendants Association of Australia, Michael Mijatov, said yesterday.
"Qantas hasn't been pessimistic in its public pronouncements, but in terms of their actions [such as reconfiguring first- and business-class seating] you can see how serious it is. Competition is fierce and the air fares are just uneconomic - you can't run airlines on these fares."
Qantas's international routes, particularly those to Europe and the United States, have been hit hardest by the global downturn.
The airline closed its cabin crew base in Bangkok - one of three overseas - in August, leading to 123 Thais losing their jobs.
Qantas has already laid off up to 3250 workers over the past two years and in August announced $1.5 billion in spending cuts over three years, including $500 million this financial year.
It follows $3 billion in cuts over the previous five years.
Linda White, assistant national secretary of the Australian Services Union, said she was more optimistic and the likelihood of further redundancies had eased.
The chief of corporate affairs at Qantas, David Epstein, said it was premature to be talking about redundancies after a stabilisation in trading conditions.
"We are confident that the contingency plans we have put in place over the last 12 months have put the organisation in a stronger position," he said. "As the market improves, Qantas is well positioned to take advantage of any upturn in business."
Frequently Asked Questions about this Article…
Why are unions worried about potential Qantas redundancies?
Unions are warning that Qantas may face forced redundancies by the middle of next year if air travel and corporate demand don’t recover. The airline’s review of first- and business-class seating on long‑haul aircraft has been read as a sign the slump in corporate traffic is serious, prompting union concern for cabin crew jobs.
How long might it take for business travel to recover, according to industry groups?
The Board of Airline Representatives, speaking for international carriers flying to and from Australia (including Virgin Blue and Qantas), said a recovery in business travel could take between six and 12 months.
Has Qantas already made job cuts or closed bases?
Yes. Qantas closed its cabin crew base in Bangkok in August, which led to 123 Thai cabin crew losing their jobs. The airline has also laid off up to 3,250 workers over the past two years.
What measures has Qantas used so far instead of cutting Australian cabin crew?
Qantas has largely avoided cutting Australian cabin crew by using measures such as leave without pay, shifting staff from full‑time to part‑time roles, and encouraging long‑term leave — although unions say the long‑term leave option has almost been exhausted.
What cost‑cutting and spending reductions has Qantas announced?
Qantas announced $1.5 billion in spending cuts over three years, including $500 million this financial year. This follows around $3 billion in cuts over the previous five years.
Which international routes and areas of Qantas’s network have been hit hardest?
Qantas’s international routes to Europe and the United States have been hit hardest by the global downturn, according to the article.
What has Qantas management said about the threat of redundancies?
David Epstein, Qantas’s chief of corporate affairs, said it was premature to talk about redundancies after trading conditions stabilised. He said the contingency plans put in place over the past 12 months have strengthened the organisation and that Qantas is well positioned to benefit as the market improves.
What should everyday investors monitor about Qantas and the airline sector right now?
Investors may want to watch signs of a recovery in corporate and international travel (the Board of Airline Representatives cites a 6–12 month timeline), announcements about premium‑cabin changes (Qantas is reviewing first‑ and business‑class seating), any further staff‑reduction notices or spending cuts, and commentary from Qantas management about trading conditions and contingency plans.
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