THE future of the Qantas Defence Services division rests heavily on winning a contract to overhaul several Hercules transport aircraft which will be given to the Indonesian government.
Unions say the contract will be crucial to Qantas Defence Services bridging the gap in work between the end to maintenance of the RAAF's fleet of C-130H Hercules next year and its next generation of planes.
The airline announced last week it would axe 40 engineers and support staff from QDS's main operations at the RAAF Richmond base and another five in Brisbane.
Qantas managers told staff at Richmond they were searching for new contracts but there was an immediate need to reduce the workforce to about 110 as a result of the government's decision in May to retire early the RAAF's C-130H Hercules transport aircraft.
A NSW organiser for the Australian Workers Union, Paul Farrow, said QDS would need about 110 engineers and support staff if it won the contract for major work on three of the four C-130H Hercules due to be sent to Indonesia.
''Qantas senior management have told us that it is looking good [for the Indonesian contract] but they won't have a final decision until the end of the year,'' he said.
However, he said QDS would struggle to maintain its workforce at the new levels if it was unsuccessful in winning the contract for the so-called ''gifting program''. The last of the maintenance work for the RAAF's C-130H Hercules is due to be completed by the middle of next year.
The defence contract to maintain its replacement aircraft, the C-130J Hercules, was won several years ago by Australian Aerospace, the local subsidiary of European giant EADS.
QDS is an example of the challenges facing many independent operators in the aerospace industry, which are finding it more difficult to compete for contracts against manufacturing giants such as Boeing. The high Australian dollar also makes it difficult for them to win work from overseas.
A Qantas spokesman said on Sunday QDS was ''working to attract additional work for this facility [at Richmond] in what is a highly competitive global marketplace''.
The reductions at the defence services unit were part of 500 job cuts Qantas announced last week. It takes the total number of jobs axed from the airline's engineering operations this year to about 1260.
QDS also has smaller operations in Canberra, Brisbane, Amberley and at Villawood.