Downgrade, lay-offs ahead at Qantas
By Scott Rochfort
June 22, 2005
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Qantas has already started laying off permanent staff as speculation mounts the airline could issue a profit downgrade as early as Friday.
As talk mounts that the airline has plans to slash thousands of jobs and expand its overseas labour base in order to cut costs, unions have already accused Qantas chief executive Geoff Dixon of breaking his pledge that the expansion of Jetstar would not result in job losses at Qantas.
On Monday, 14 QantasLink check-in staff in Newcastle were told they could be out of a job within two weeks after Jetstar outsourced its passenger service contract to its baggage handler at the airport, Skystar.
"All 14 of those have been met with and advised that we will work with them as to who's redundant and whether any of them have an interest of redeployment within the group," said Qantas's general manager of people, Kevin Brown.
Mr Brown denied Qantas had broken its pledge that no jobs would be lost as a result of Jetstar.
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"What we said to the unions nearly 14 months ago was that Jetstar during start-up would not result in the loss of jobs in Qantas.
"Now here we are 14 months on from that commitment and you know it is a mature business. It's flying, it's growing, and naturally, in some locations, as parts grow and shrink and grow elsewhere, you're going to have those transition points.
"We're transitioning, the result of that is that not everything fits as neatly as it might," he said.
Mr Brown said Qantas "never said jobs would not be lost over time" after Jetstar's introduction.
But Australian Services Union assistant national secretary Linda White said Qantas had broken its word. "All the promises made about nobody in Qantas being made redundant is a farce," she said.
Ms White also warned the loss of 14 QantasLink staff in Newcastle could be the start of a larging culling process.
"It's the thin end of the wedge. First it's Newcastle and then it's everywhere else. The promises we had have basically gone out the window."
Labor's federal member for Newcastle, Sharon Grierson, said the outsourcing of check-in staff by Jetstar could represent a major risk to security.
"If these people [Skystar staff] are going to get paid such lousy money, what confidence can we have that these people are really going to deliver."
Chances of a potential profit downgrade by Qantas have been heightened by the airline's chief financial officer Peter Gregg pencilling in a briefing with analysts on Friday on International Financial Reporting Standards.
Macquarie Equities issued a note two weeks ago warning that the airline could face a $700 million write-down from changes in how it treated its frequent flyer scheme on its books. It also said it "would not be overly surprising" if the airline was hit with a $100 million-$150 million redundancy bill.
Qantas is also expected to score a major breakthrough in its bid to hire more lower-paid Asian staff through its Australian Airlines subsidiary next week. The airline's 310 cabin crew are expected to vote for a deal next Wednesday which will allow the airline to access foreign crews.
When asked about Qantas's plans to source Asian labour, Qantas's Kevin Brown said: "We shouldn't be constrained given our network of where we fly, and given what our competitors have available to them ?
Calling Qantas's approach to unions as "firm but fair and definitely tough", Mr Brown said: "We have to create a competitive business that'll create job security."
Check before you fly
- Fears of Qantas profit downgrade as soon as Friday
- QantasLink loses Jetstar check-in contract in Newcastle; 14 face redundancy
- Airline unions' nationwide day of action on Monday
- Qantas says line on unions "firm but fair and definitely tough"
- Australian Airlines flight attendants expected to vote for agreement next week to allow airline to access foreign crews freely
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