Qantas will slash 1,500 jobs worldwide as Australia's largest airline seeks to combat rising oil prices and challenging market conditions, CEO Geoff Dixon said today.
The carrier also cancelled plans to hire 1,200 new staff and increase its capacity by 8% in 2008-2009, and announced it will retire up to 22 older aircraft from its fleet.
Dixon refused to guarantee there would be no more job losses, saying it hinged on the price of oil, which was set to push the airline's fuel bill up by more than $1.9 billion in 2008-2009.
Dixon said the aviation industry was facing a crisis worldwide due to the volatility in the price of oil, which last week soared to record highs above $147 a barrel. He said that by acting now, Qantas was protecting its competitive position and the majority of its 36,000 jobs, and was enabling the company to 'grow profitably when conditions improve.'
Dixon said some operational jobs would be lost, although the bulk of positions being cut were in non-operational areas, with more than 20%of management and head office support jobs to go.
The job cuts would come into effect by December and a recruitment and executive pay freeze would remain in place indefinitely, he said.
The latest round of cuts come after Qantas slashed flights to Asia and reduced its domestic capacity by 5% in recent months in response to the fuel crisis. The airline has also hiked fares twice since May, and Dixon said more were on the cards if there was no relief on fuel costs.
Dixon said that despite retiring the older aircraft from its fleet of 228, Qantas would press ahead with the introduction of new, more fuel-efficient aircraft such as the Airbus A380 and the Boeing B787.
Budget Australian carrier Virgin Blue also said it would reduce capacity by 12% and introduce other measures to counter high fuel costs. It had previously planned to cut capacity for the year ending June 2009 by 6%, but said it had been forced to double this because of 'punitive fuel prices'.
The airline will also raise some fares, introduce new baggage charges and remove two Boeing 737 planes from the domestic market and delay delivery of five Embraer aircraft planned for use in 2009.
