Qantas to make 1000 staff redundant; maintains profit guidance

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Qantas to make 1000 staff redundant; maintains profit guidance

By Alan Wood

SYDNEY, April 9 AAP - Qantas Airways has been forced to slash 1400 staff as the SARSvirus and Iraq war hit travel, but the airline claims the cuts will help save the jobsof tens of thousands of other airline workers.

Australia's flagship carrier will make 1000 employees redundant by June 30, and willaxe 400 permanent staff through attrition as well as converting another 300 positionsto part time from full time.

Chief executive Geoff Dixon defended the job cuts as necessary to protect Qantas' other34,000 workers, with bookings on some international services slumping by as much as 25per cent.

But unions described the cuts as the easy way out, warning that employees could reactby staging industrial action.

Australian Services Union (ASU) national assistant secretary Linda White said her members- the airline's service and store officers - were incensed at their employer's "deplorable,irresponsible action".

ASU members "would seriously consider" industrial action, Ms White added.

Mr Dixon said publicity about SARS, or severe actute respiratory syndrome, virus wascurrently having a bigger impact than the war.

"I don't like letting 1,000 people go, but I also realise I've got to protect the other34,000 (employees)," he said.

Mr Dixon said the 1700 jobs affected involved nine per cent of Qantas management andfive per cent of wage and salary staff.

"We regret the need for this action," he said. "However it is vital we move quicklyto protect our position in a very difficult and competitive industry."

Qantas chief financial officer Peter Gregg said the sector was in trouble.

"It's about time people recognised that the aviation industry is in a lot of trouble- consolidation is required, efficiencies are required," he told journalists.

Mr Dixon said bookings for the next 16 weeks showing UK business was down about tenper cent from a year earlier.

"Hong Kong's down about 25 per cent, Europe's down about 15-17 per cent and Japan'sdown about 20 per cent," he added.

However, the US market was up about two per cent, with the domestic market robust and strong.

The airline has not ruled out further redundancies and analyst Scott Marshall of ShawStockbroking said a second smaller round of redundancies could follow.

Mr Marshall said Qantas could be taking advantage of the current weak situation tocut its its cost base to remain competitive against discount carrier Virgin Blue.

Mr Dixon said Qantas - the fourth biggest private sector employer in Australia - waslooking for greater productivity from staff and wanted simplified contracts after negotiatingwith unions for months.

Prime Minister John Howard said the job cuts were regrettable.

He added that he believed Qantas was a "rock solid, guaranteed future airline" comparedto many other airlines.

Shares in Qantas fell 13 cents, or four per cent, to $3.07 as the aviation sector continuedto suffer from the war and SARS outbreak.

Globally, airlines have slashed staff and services as the war and SARS hit bookings,with German airline Lufthansa overnight warning it expected to report a first quarteroperating loss because of a sharp fall in passenger numbers.

Qantas will book a $60 million charge in 2002/03 because of the redundancies, howeverMr Dixon said the airline had not changed its profit forecasts.

Last month Qantas warned that its 2002/03 net profit would come in 15 per cent belowanalysts' expectations at the time.

AAP arw/sh

KEYWORD: QANTAS JOBS NIGHTLEAD (PIX AVAILABLE)