Qantas To Reduce Staff By 1500 to 2000

Qantas Airways said today it would reduce staff positions by between 1500 and 2000 as a result of the sharp and continuing deterioration in the international aviation market.

Qantas Chief Executive Officer Geoff Dixon said the reductions in staff would take place before the end of December and would be achieved by redundancies, attrition and by not filling budgeted vacancies.

Every effort would be made to keep compulsory redundancies to a minimum.

Mr Dixon said the downsizing by Qantas was considerably less than for other international airlines. The industry had shed over 250,000 jobs in the past eight weeks.

Mr Dixon said a range of other initiatives would also be introduced immediately to meet the market downturn. These include:

* Taking of annual and long service leave;
* Job sharing by interested staff; and
* Leave without pay.

Mr Dixon said Qantas would also make further reductions to its international flying, taking the reduction in capacity since the terrorist attacks on America to around 11 per cent:

* All flights to New York will be withdrawn from November 25;
* There will be a reduction in flights to Rome, Johannesburg, Bangkok, Manila and Buenos Aires; and
* Paris services will be, from March, routed over Frankfurt.

In addition to the reduction in services, Qantas had decided to retire its fleet of five 747-200 aircraft from April next year. The aircraft were planned to be phased out from late 2003.

Qantas would also make extensive internal changes, moving a significant number of people from its international operation to its domestic operation.

Mr Dixon said these moves by Qantas were designed to bolster decisions made last month to respond to the international aviation downturn resulting from the terrorist attack, to lower its cost base and to put it in a strong position to take advantage of the inevitable recovery of the international aviation market.

These decisions included:

* Seeking a wages pause for 12 to 18 months from all staff;
* The purchase of new, more cost efficient 737-800 aircraft for domestic flying; and
* Substantial changes to the domestic product offering.

Mr Dixon said Qantas, while currently benefiting from a larger market share domestically following the collapse of Ansett, was still principally an international airline. Last year, 78 per cent of the airline's profits were generated by the international operations.

"The events of September 11 have affected services far beyond the United States," he said. "There has also been a significant downturn for travel to and from Europe, South East Asia and Japan.

"Bookings from Japan are down 25 per cent and from the United Kingdom 23 per cent. Some other markets are similarly affected and overall traffic levels have declined market by market between 10 per cent and 20 per cent.

"While we need to continue to monitor the international situation closely, every effort will be made to resume withdrawn services as quickly as possible to help arrest the downturn in inbound tourism."

Mr Dixon said Qantas had worked extremely hard to become competitive during the six years since privatisation.

"We have done this principally through sound economic and operational decisions, wise investment and tremendous staff enthusiasm."