Qantas job cut fears in Canberra, but flights unchanged

The airline has announced a $2 billion cost reduction strategy that will include the loss of 5000 jobs nationwide and a reduction in routes and flights, as it unveiled its worst result since privatisation.

A Qantas spokesman said there would be no immediate job losses in Canberra.

"However, there will be some nation-wide voluntary redundancy programs, such as for airport workers, that will be open to Canberra employees," he said.

"There won't be any effect on Qantas' services to and from Canberra."

Transport Workers Union ACT secretary Klaus Pinkas predicted there would be a number of redundancies in "below-the-wing" roles towards the latter part of 2014.

“We don’t know how the 5000 staff cuts announced today will affect Canberra Airport, but I imagine that we’re not going to be immune to them," he said.

“There are 60 people working in below-the-wing roles and a total of 220 people employed by Qantas at Canberra Airport."

Canberra Airport managing director Stephen Byron said Qantas had been doing it pretty tough in Canberra for the past three years.

“Qantas have telegraphed that there will be job cuts in Canberra. It’s not quite clear whether they’re in the terminal, in the baggage areas, in management, or even in town in the travel and sales area,” he told ABC Radio.

Australian Services Union NSW/ACT secretary Sally McManus predicted Canberra would lose staff.

She said staff met on the issue Thursday afternoon and the Australian Service Union would meet Qantas Friday morning to discuss potential staff changes at the Canberra Airport.

“It’s the lowest paid workers who are taking the brunt of these bad decisions made by the CEO and the board,” she said.

“We’ll fight for every job that we can.”

Australian Aviation magazine managing editor and publisher Gerard Frawley also expected jobs might be cut at the Canberra Airport.

“There’s not been a lot of detail so far about where the job cuts will actually fall, so there might some in Canberra but I can’t see them being large-scale losses," he said.

Mr Frawley could not see any significant changes to routes coming in and out of Canberra Airport, saying international services were first in line to be cut.

The national carrier has already announced the Perth-Singapore route will be cancelled, while flights between Brisbane and Sydney and between Sydney and Singapore will be serviced by B747s rather than A330s.

Canberra Airport has not been immune to cuts in flight routes recently. In May, managing director of the Canberra Airport Stephan Byron said cuts to the public service had resulted in the cutting of flight routes to Darwin, Hobart and Townsville.

In May 2012, Brindabella airlines, now in receivership, cut flights from Albury to Canberra Airport. The route was reported to have serviced 14 people on average a day, yet averaged only six people shortly before being cancelled.

Qantas announced the cost cutting, the sale and deferral of more than 50 aircraft, and a further reduction of $1 billion in capital expenditure on Thursday morning. The airline will also retire six Boeing 747 jumbos in the second half of 2015-16, which is earlier than initially scheduled.

Qantas chairman Alan Joyce said the airline had already made tough decisions and nobody should doubt there would be more ahead.

''To reach $2 billion in cost cuts over three years, we have to work our assets harder, become more productive, retire older aircraft, and make sure that our fleet and network are the right size. We must defer growth and cut back where we can, so that we can invest where we need to,” he said.

The $252 million underlying loss in the first half is Qantas' biggest since the Keating government began cutting it free from government ownership in 1995. It comes amid a bitter fight with Virgin Australia in the domestic market and intense competition on international routes.

Before the latest retrenchments, Mr Joyce had announced almost 4200 job cuts during his tenure.

The job cuts from Qantas's 33,000-strong workforce will be across the board. They include reducing management and back office staffing levels by about 1500. It will also wind back its aircraft maintenance operations and catering.

Qantas shares fell sharply Thursday following the announcement.

The Australian Services Union says Qantas decision to shed 5000 full time workers is short sighted.

The ASU represents workers in airport check-in, head office, administration and finance, call centres, freight and engineering clerical workers and administrative, operations and technical staff.

Transport Minister Warren Truss has singled Qantas' high costs and wages as a key factor weighing the airline down and says the government will monitor markets' reaction to the airline's reported $252 million underlying loss before moving to respond.

In an exclusive interview with Fairfax Media, Mr Truss said the Coalition was "not in the business of propping up businesses" but acknowledged the key strategic role Qantas plays in servicing cities across Australia.

- with Matt O'Sullivan, James Massola and Jens Meyer