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Fears Qantas will slash 3000 jobs in cost-cutting drive

Qantas' workforce fears deep job cuts as high as 3000 will be revealed next week when the airline's management reveals how it plans to strip $2 billion in costs from the business.

The airline flagged in December that it will report a half-year loss of up to $300 million, and detail the extent of job cuts which it has previously said will be at least 1000 this year.

Well-placed sources said on Friday they believed the jobs cuts, likely to include engineers and pilots, would be in the thousands. While they could not put a definite number on the cuts, sources said they would be ''pleasantly surprised'' if it was less than 2000 or 3000.

Qantas would not respond directly to questions of how many jobs would be axed but put out a statement late on Friday noting a ''series of unsubstantiated and unsourced rumours swirling around ahead of our half-year results, ranging from estimates on job losses to route changes''.

The airline has denied rumours Qantas will reduce A380 services to London.

Qantas chief executive Alan Joyce warned last week that there were more ''hard decisions'' ahead for the airline. He is under pressure from investors to reveal a credible way of cutting costs when he unveils Qantas's half-year results next Thursday, a day before Virgin Australia reports.


''If they are going to cut costs, jobs will be a big part of that,'' an analyst said.

Australian Services Union national secretary Linda White told Fairfax Media that with 33,000 employees at the airline, speculation was rife about what the company could announce next Thursday.

But she said her union, which represents the largest bloc of about 8000 Qantas workers, including ground and check in staff, telephone sales, IT and some middle management, would fight for every job at the airline.

"This is all speculation, we don't know the facts yet, we have strong enterprise bargaining agreements and we will fight for every job,'' she said. "We will see what happens next week.''

The fears of deep cuts to Qantas's 33,000-strong workforce comes as the airline ditched its longstanding code-share alliance with South African Airways on flights between Australia and Johannesburg

The alliance has long been a bone of contention for regulators because Qantas and South African Airways are the only airlines that have direct flights between the two countries. Rival carriers such as Singapore Airlines, which offers flights to South Africa via their home ports, provide the only competition.

We have strong enterprise bargaining agreements and we will fight for every job

Qantas will pull its code off South African Airways flights between Perth and Johannesburg at the end of May, while SAA will do likewise on the Australian airline's daily 747 jumbo service between Sydney and Johannesburg.

It means Qantas passengers wanting to travel from Perth, which has a large expat community from South Africa, to Johannesburg will have to fly on its alliance partner Emirates, via Dubai.

Qantas has a thrice-weekly code-share service with Emirates from Perth to Dubai, and onward connections to Johannesburg, Cape Town and Durban.

A spokesman for Qantas said regulators had previously indicated that they were unlikely to grant an extension of the deal, which meant that ''winding it up earlier means we can create new options for passengers''.

The code-share deal was due to expire at the end of this year.

Qantas has also announced that its Boeing 747 flights from Sydney to Santiago in Chile will continue onto Rio Janeiro in Brazil during the Football World Cup in June to cater for the increased demand from soccer fans.

Shares in Qantas rose 5 per cent to $1.25 on Friday after Macquarie Equities analysts raised their recommendation on the stock to ''out-perform''.

The analysts said the time to buy airline stocks was when ''things look their worst and with capacity growth easing into 2014-15 ... now is the time to buy''.