Qantas Prepares Job Axe After Losing Juicy Air New Zealand Contract

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By Vittorio Hernandez | January 24, 2013 9:25 AM EST

Another financial turbulence has hit the losing Australian flag carrier, Qantas, which reported on Wednesday the end of its multi-million contract with Air New Zealand. As a result, Qantas is sharpening its job-cutting axe.

The contract for Qantas to provide ground-handling services for Air New Zealand at the Sydney, Melbourne, Brisbane, Adelaide and Perth airports lapses in March. It includes checking in of passengers and baggage handling.

Air Zealand domestic passengers who fly via Auckland could actually opt to use the gateway's automated check-in system.

Qantas was informed of the termination of its multi-million contract as early as November 2012 with Air New Zealand opting to grant the contract instead to Toll Dnata, a cheaper third-party operator.

Toll Dnata was established in 2007 and is the only ground-handling company in Australia that operates at all the major international gateways in the country. Besides Australia, Toll Dnata provides ground-handling services in some airports in the United Arab Emirates, Pakistan, Philippines, Singapore, Switzerland, United Kingdom and Iraq, as well as flight catering services.

While Qantas is still studying the impact of the contract loss on its strike-prone labor force, the air carrier said it did not expect laying off or compulsory redundancies, but instead would push for voluntary redundancies.

Linda White, assistant national secretary of the Australian Services Union, said the move would likely affect Qantas staff at Sydney Airport's international terminal. Those assigned in other Australian airports would likely deploy the affected employees to other tasks.

The reduction of manpower, whether compulsory or voluntary, is likely to encounter resistance from Qantas unions which had struck several times in 2012 over disagreement with policies of Qantas Chief Executive Alan Joyce.

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