Qantas offers redundancy to all 7000 of its cabin crew

[Greg McDonald]

From NEWS.COM.AU:

QANTAS has offered voluntary redundancies to all 7000 of its cabin crew members in its latest cost-cutting move.

"Qantas issued a voluntary redundancy registration of interest pack to all cabin crew members today," a Qantas spokesperson said.

The move comes in response to high oil and fuel prices and global natural disasters, with Qantas Chief Executive Alan Joyce saying Qantas is facing its most serious challenge since the peak of the global financial crisis.

"We need to act decisively to respond to rising fuel costs and natural disasters, just like we did during the global financial crisis, to ensure the ongoing sustainability of our business," he told ABC online.

Qantas wants to reduce its planned capacity growth on domestic flights from 14 to eight per cent, and on international routes from ten to seven per cent.

The redundancy announcement came on the same day the airline announced its international unit carried 509,000 passengers in April 2011, up 7.4 per cent from April 2010.

Qantas last month announced it will lift the price of its European flights after the EU, under its emissions trading scheme, said it would force the airline to pay a tax on 15 per cent of its carbon emissions from its nearest port of departure.

Meanwhile, a recent US study placed Qantas fourth in the world for revenue raised by ancillary charges for items such as baggage.

Qantas earned about $1.5 billion in 2010 as a result of the charges, consultancy firm IdeaWorks found, placing it fourth below US airlines Delta, American and United.

The move towards voluntary redundancy for cabin crew is the latest in a series of industrial issues for the airline.

The Australian and International Pilots Association (AIPA) is currently considering industrial action over wages and conditions following a canvas of its 1700 members.

If the pilot's strike goes ahead, it will be the first of its kind in 45 years.

The airline's management have also recently been in negotiations with union groups over wage and working conditions.

In mid May, 1600 engineers scrapped plans for nationwide strikes.

Members of the Australian Licensed Aircraft Engineers Association (ALAEA) planned strikes at airports around the country as part of the ongoing row over pay and conditions.

[Nigel C]

And if all 7000 cabin crew decided to take it.....

:eek:

[Todd Hendry]

Nigel,

We'll just fly freight.

Todd

[Ryan N]

Qantas is aiming for around 400 redundencies from what was quoted in the news last night.

[Nigel C]

Nigel,

We'll just fly freight.

Todd

Hi Todd,

My post was made entirely in jest, much like this next bit; who'd have thought Qantas has the potential to fly the first A380 freighter! Even Airbus wouldn't have seen it coming ;):D

[Jack B]

Perhaps they're looking to get rid of the more "Expensive" QAL Long Haul and Qantas Short Haul crew to recruit more QCCA and QD CC

[Andrew M]

^^ What he said ^^

I wonder if they are offering redundancies to Jetstar crew? :rolleyes:

[Todd Hendry]

Hi Todd,

My post was made entirely in jest, much like this next bit; who'd have thought Qantas has the potential to fly the first A380 freighter! Even Airbus wouldn't have seen it coming ;):D

Nigel. The A380 freighter would be a classic. But I was thinking more 748 freighters. Isn't QANTAS putting an order in for a few?
And we can convert the existing 74's into freighters. Also the 767's and 73's. The 330's can go to Jet*.

Sounds like a plan.

Some how I think it will be taken by some very senior, almost retired crew.

Todd.

[Ryan N]

Now aiming for 350.

http://www.news.com.au/business/breaking-news/qantas-aims-for-350-voluntary-redundancies/story-e6frfkur-1226068700952

[Nigel C]

Nigel. The A380 freighter would be a classic. But I was thinking more 748 freighters. Isn't QANTAS putting an order in for a few?
And we can convert the existing 74's into freighters. Also the 767's and 73's. The 330's can go to Jet*.

Sounds like a plan.

Some how I think it will be taken by some very senior, almost retired crew.

Todd.

A fleet conversion to freighters? Just to think...no more public service announcements. Hard landing? No worries! Steep turns? Why the hell not! Land 16R and roll through to Golf? Sure!

Qantas would be killing 2 birds with the 1 stone here (Mr Ramsay, Adam P. ...no need to comment on the birds bit...), they reduce costs by turfing the hosties, and the pilots would think lower pay for more fun in the cockpit is a great trade off! It's a win, win for all concerned!

Mr Joyce...you're a genius!

[David Ramsay]

It only started out as one bird, mate. :p

[Greg Wood]

Whats wrong with this airline ??? morale must be at an all time low! these people have no job security with this on going need by QF to constanty cut costs, didnt they return a modest profit LFY at where did that $$$ go ???After all a companies best asset are its employees.:rolleyes:

[Andrew P]

Greg

its VOLUNTARY, whats the problem with that!!!

[Nigel C]

It's actually a good way of the dead wood leaving without the need for chainsaws. You may well find the morale in the cabin improves when those who may have been griping for a long time actually leave...

[Garry Emanuel]

First up - "asking for expressions of interest" !

Second - where in any contract of employment does the expression "job security" get included ?

Third - albeit we all have views on how an airline/telco/bank should be run, only a few have the dubious challenge of doing it. Qantas is responding to what lies ahead of them and at this stage, is doing it with a measured approach. Read "one that many (understandably) don't like !

I am sure the media sensationalism will cut in shortly and give a new dimension - thousands of jobs lost, executives pocketing thousands of dollars in bonuses and so on. Perhaps even a theme on safety and "the A380 incident".

Reality in my mind - they need to make decisions; some options will not sit well with all players; media will pounce every time there is a remotely negative theme; QF will take a PR hit; the planes will continue to fly; the unions will win some ground; the masses will migrate to VA and JQ; QF will need to make further trims; the merry-go-round will continue; VA or JQ will have similar issues in the future !

We all live happily ever after ! ! ! ! Perhaps ! ! !

[Graham F]

I have been through 2 redundancies, not in the airline industry though. While it may seem like a good way to get rid of dead wood, what actually happens is many of the good staff who can easily find other employment leave and the dead wood which couldn't find other jobs stay. So overall you end up with a lower standard of worker. Its the great way to further lower morale in a workforce.
Poor Qantas staff, it is only going to get worse.

[Arthur Boy]

Here we go!! Agree entirley with Grahm F's sentiments above.....and thats the problem with opening it up to everyone, the good get going with a free pocket full of cash! Which leaves the same useless 'coffee or tea?' drones.....hang on, maybe thats the plan??....geniuses!!!

The clock is ticking for the departure of the lepricorn and the puppet master, kinda makes Geoff 'the sky is constantly falling' Dixon look like a good option I say!! Cant be any worse than the current bunch of morale destroying incompetents running the joint. and IMHO James is welcome to take the bigger chair also!

rant over!

[Ash W]

So Aurthur et al how would you run the business?

Sadly changes are needed and those changes are going to upset everyone. The airline business is very competitive. I read these and other boards and see how people think the sun shines out the proverbial of the likes of Singapore, Ethiad, Emirates etc and are happy to take their business there but still carry on about how uncompetitive Qantas is. The reality is they are uncompetitive because they cannot afford to be competitive. All that new product costs money, but Qantas has to spend what they earn elsewhere.

The way the business is run now is more suited to the days of a heavily regulated 2 airline industry such as we had in Australia and heavily regulated international operations where home rights were protected much more than they are today.

So bottom line IMO is Mr Joyce is doing what he NEEDS to do, like it or lump it. If Qantas is to survive massive change is needed.

[Todd Hendry]

So bottom line IMO is Mr Joyce is doing what he NEEDS to do, like it or lump it. If Qantas is to survive massive change is needed.

Like buying 777's. Management has a lot to answer for.

[Luke A]

Simple point is that Qantas need to change. It’s unfortunate, but legacy carriers are a thing of the past. Qantas are loosing money and need to find a way to bring in the revenue. Your ticket prices are determined by your competitors. Increase them and your customers will disappear. So how do you help the bottom line? You need to cut costs. It’s easy to be an ‘arm-chair’ Ceo, but Qantas need to act fast. Sell some aircraft but immediately lease them back and start looking seriously for an airline with cash to merge with. Maybe wrap up Qantas International and allow Jetstar International to franchise as Qantas, who knows. But something like that needs to happen. Its going to be a very interesting year ahead.

[Ash W]

Like buying 777's. Management has a lot to answer for.

That is debatable.

[Andrew P]

Simple point is that Qantas need to change. It’s unfortunate, but legacy carriers are a thing of the past.

but CX and SQ are legacy airlines too, so they are doomed also?

[Luke A]

but CX and SQ are legacy airlines too, so they are doomed also?

Thanks for the reply. I don't recall saying 'doomed', but I'll go back and check my post, I could be wrong. Never the less to answer your question, when I get some time tonight, I'll check out the wages of Singapore/Cathay flight crew, and compare that against Qantas, just as an example. Now if they are significantly lower than Qantas, then no, they should be ok for the moment Andrew. Cheers,

[Paul McFarlane]

I have no opinion either way and I am definitely not an expert so my comment won't be laced in sarcasm.. :p

..but is it more than just coincidence that both SQ and CX are based in and mainly serve city states and don't have a domestic capacity?

Just thinkin aloud...:)

[Owen H]

Luke,

Legacy carriers are a thing of the past? Seriously?

Have a look around and see who's making the profits in the airline world. Cathay, Emirates, Singapore. Even Air NZ is doing well.

The "network" model is fine. It just needs vision and expertise.

[Luke A]

Ok that's fine, maybe 'Legacy' was the wrong word. I used that term not just for the flight service, but staff conditions,contracts and unions.

[Ash W]

Andrew think you hit the nail on the head about the other airlines having a geographic advantage over airlines like Qantas. Have been saying the same myself for a long time when people ask why Qantas doesn't fly to places like Dubai or when people complain that Emirates, Singapore etc serve Australia with higher frequencies than Qantas does. The reason of course is they are flying people to their hubs and then distributing out, something that Qantas could never hope to do.

Hopefully with Qantas sponsoring Malaysian's entry into OneWorld there might be some hope that Qantas, in partnership with Malaysian can take some regional SE asian spoke traffic off the likes of Singapore and Thai.

[Justin L]

Legacy carriers are a thing of the past? Seriously?



From a recent research paper I wrote for my Master's on worldwide deregulation of the airline industry and the costs/benefits to consumers and governments, in my research of journals and government reports, the term "legacy carrier" was commonly agreed to define airlines which were established in the pre-deregulation era. So Qantas through this definition would be classed as a legacy carrier (as they existed as an international carrier back then, and the acquisition of TN - also a legacy carrier of the time - into QF would still make QF a legacy carrier).

[Ash W]

Justin, don't think the definition of a legacy carrier is in question, more so the comment one page back that all legacy carriers are a "thing of the past", meaning their days are numbered.

Clearly there are legacy carriers out there that are doing well. Though admittedly most of these have either gone through a lot of pain to be competitive in the modern world or come from countries with low cost bases.

[Justin L]

Ash,

I agree with your comments.

[Mike W]

Andrew think you hit the nail on the head about the other airlines having a geographic advantage over airlines like Qantas. Have been saying the same myself for a long time when people ask why Qantas doesn't fly to places like Dubai or when people complain that Emirates, Singapore etc serve Australia with higher frequencies than Qantas does. The reason of course is they are flying people to their hubs and then distributing out, something that Qantas could never hope to do.


How do you explain Air NZ's recent change of fortunes with the same challenges and a home country of only 4 million people?

[Luke A]

How do you explain Air NZ's recent change of fortunes with the same challenges and a home country of only 4 million people?

A government get out of jail free card. New Zealand government 76.07% ownership.

[Mike W]

^ Nice. Still, they're now doing well with great leadership from Fyfe.

Do we have to wait until QF gets to that point and Julia can bail them out like Helen did over the Tasman? < $2 a share and falling, might be soon...

[Nigel C]

I might be about to start a war here...

But why the hell should the federal government bail out an airline business if it goes under due to poor internal management??? There were calls for that rubbish when Ansett went under, and those calls were rightly rejected.

[Mike W]

^ Hi Nigel, I certainly don't want to be even partly responsible for a war. I was only joking about a QF government bailout. I don't think for one minute they would anyway. :eek:

[Ash W]

^ Nice. Still, they're now doing well with great leadership from Fyfe.


Luke is right, their bailout and restructure saved them. They also operate in more of a niche market that is even further away than Australia so have less competition compared to Australia. So much easier to survive.

[Mike W]

^ Hang on, more isolated, less customers, they're depending on revenue from a very competitive, congested trans-Tasman market, an Australian LCC (JQ) invading their domestic market... Sorry Mate, I'm not buying it.

Qantas need to pull their socks up.

[Ash W]

Which part are you not buying Mike? On long haul, Air NZ is under no where near the same pressure from competitors as Qantas is, due in no small part to NZ being further away and having a smaller population base. Australia on the other hand is closer to the action and a single hop away from some of the most aggressive hub carriers in the world.

You are most correct about Qantas though they do need to pull their socks up. But this is the root of their problems, their staff won't let them make the changes that they need to do to become more competative and make the money to invest in innovation. (Wasn't your United in the same boat recently too?) Classic catch 22. If I recall Air NZ was in the same boat until they were bailed out by the NZ government and were able to restructure into a unit that is better able to compete. Certainly hope Qantas doesn't go that way, and if they do I agree with Nigel that they shouldn't be bailed out. Maybe good reason why the unions should be facing reality and working to come up with a plan with Qantas management that is workable and will bring the company into the future.

Though having said that on Tasman Qantas is doing ok because they have been able to reduce their costs by using the cheaper Jetconnect.

[Mike W]

Sorry Ash, I should say I'm not buying that QF's problems of competition and remoteness is unique to them. NZ has a lot of the same issues and some unique ones of their own.

We agree on the point QF have to improve, however they do it. I'm definitely not a fan of Unions taking down companies just to prove their own points and have their members left high and dry. I really hope QF can overcome this and I'm wondering if little Al's strategy is leading towards putting pressure on the Unions in some way. Either that of I'll have to agree with the other posters in waving goodbye to him on his way back to Dublin.

BTW, where did you get (Wasn't your United in the same boat recently too?) my United from? I'm a 747 fan but...?