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Qantas to cut 5% of cabin crew, chairman denies rift with CEO

6-Jun-2011 10:19 AM

Qantas plans to cut 5% of its cabin crew and has offered employees voluntary redundancy packages (Bloomberg/The Australian, 03-Jun-2011). Due to natural disasters, higher fuel costs and rising competition from Emirates and Virgin Australia, the carrier has cut growth plans and overseas routes for 2011. Qantas believes 350 of its 7000 flight attendants will likely accept the redundancy package. The packages offers three weeks’ pay for every year of service in the first five years and four weeks’ of each subsequent year. The carrier has no plans for mandatory lay-offs. Employees of the carrier are questioning the motives of management after the announcement, with Transport Workers Union (TWU) national secretary, Tony Sheldon, stating the tactic did not make sense given the increasing profits of the carrier and projected growth figures.

TWU: "We need cabin crew on all flights – it is a regulatory requirement and a service requirement, not to mention the safety aspect. Qantas/Jetstar is still predicting massive growth over the coming 12 months both internationally and domestically. They still need cabin crew to manage the flights. Just like they have replaced Australian pilots with cheaper overseas trained pilots, they will want to do the same with the cabin crew. They will pay less, they will not pay superannuation. This could also be a form of tax avoidance – which affects all government services." National Secretary, Tony Sheldon. Source: Statement, 03-Jun-2011. [more - TWU]

Meanwhile, Qantas chairman Leigh Clifford has crushed rumours of a rift with CEO Alan Joyce over the developing battle with the carrier’s pilots and engineers along with speculation about changes at the top. Qantas' long-haul pilots are considering their first strike in 45 years to demand more job security and higher pay. Mr Clifford stated the board had discussed in detail the carrier’s industrial relations issues, particularly the nature of claims by the pilots and the engineers. He stated he and Mr Joyce speak regularly about the issue although he is “very conscious the chief executive was running the business”.

Qantas: “The board is absolutely right behind Alan and very comfortable with how he’s running the business. Now that doesn’t mean we’re happy with where the business is, but absolutely Alan and I are in lockstep.” Chairman Leigh Clifford. Source: The Australian, 04-Jun-2011.