Australia to Investigate Qantas Expansion, Layoffs

Caveat to Asian Push: 1,000 Job Cuts in Australia
By @ibtimesau on

The Australian government said Tuesday it will investigate Qantas Airways' proposal to expand Asian routes on concerns raised by unions.

Transport Minister Anthony Albanese said the plan will be scrutinized for possible violation of privatization rules.

Government intervention came up after trade union leaders and a key independent senator questioned plans announced by Qantas CEO Alan Joyce Tuesday, which threaten 1,000 Australian jobs.

Asian Expansion

Joyce said in a press briefing that diversifying the airline's reach into Asian markets is key to regaining market share, which it has been losing to Middle Eastern and Asian carriers.

"Qantas is a steadily fading business, suffering big financial losses and a substantial decline in market share," he said. He cited  rising fuel prices and wages as major factors.

In order to reverse its fortunes, the company will launch joint domestic operations with low-cost carrier Jetstar Japan by the end of 2012 and international services within a year in a venture with Japan Airlines and Mitsubishi.

Qantas also plans to acquire 110 Airbus A320 aircraft from European Aeronautic Defence & Space as it expands into new markets in Asia and begins direct flights to Santiago, Chile.

Australia Operations

Joyce also warned that increased efficiencies would cost jobs in management, pilots, cabin crew and engineering.

"We will be providing full information on these matters to all our people and of course, we will be supporting all employees affected by these changes," he said. "There's no doubt this is tough. But consistent with past practices, we expect the majority of these redundancies will be voluntary."

He added that job opportunities would also open up in the next few years.

Unions React

The Australian said in a related report that Australia's main union for aircraft engineers will meet in the next few days to decide whether to pursue industrial action in response to the restructuring plans.

The paper quoted Steve Purvinas, federal secretary of the Australian Licenced Aircraft Engineers Association, saying the union's executive was ready to meet on a strike threat. The union is also looking into grounds for a legal challenge.

"Our union will be acting decisively in the next few days because it is absolutely vital that we keep Qantas an Australian airline," he said. "They've declared intentions on shifting to a base in Asia and calling it something else. This is not what Qantas is about."

 

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