21-May-2012 12:23 PM

Qantas to consolidate heavy maintenance facilities, ceasing heavy maintenance at Tullamarine

Qantas completed (21-May-2012) a review of its heavy aircraft maintenance and engineering operations in Australia and will consolidate heavy maintenance work into Brisbane Airport and Melbourne Avalon Airport. The company said the restructure was "necessary as there is currently not enough heavy maintenance work required for three separate facilities and the introduction of new technology and modern aircraft means there will be a further 60 per cent reduction in heavy maintenance requirements over the next seven years". Details include:

  • Restructure: As a result of the restructure, heavy maintenance on Boeing 737 aircraft will move from Melbourne Tullamarine Airport and be maintained in Brisbane along with 767 aircraft and A330s. The base at Avalon will continue to maintain 747s and will also conduct some work on 737s and 767s, some aircraft reconfiguration work and remain available for one-off maintenance tasks. Qantas will cease heavy maintenance at Tullamarine by Aug-2012, however, line maintenance will continue to be conducted at the facility employing more than 300 people. Qantas CEO Alan Joyce said Qantas would continue to be the only major airline in the world to do heavy maintenance at its own facilities in Australia;
  • Consultation: Qantas undertook a two-month consultation with unions, employees and other stakeholders to discuss the challenges of having three sub-optimal heavy maintenance bases and options the company was considering;
  • Impact on jobs: There will be a net reduction of 500 positions as a result of the restructure with Qantas to still employ over 30,000 people in Australia, and around 5000 in Qantas Engineering. There will be a reduction of 422 positions at Tullamarine while at Avalon, 113 positions will no longer be required due to the recent retirements of five 747 aircraft this year. There will be 30 new positions available in line maintenance in Melbourne and five jobs in Sydney. All Qantas heavy maintenance apprentices will be given the opportunity to finish their apprenticeships with Qantas. There will also be new job opportunities in Brisbane as a result of 737 heavy maintenance moving there. Where possible, Qantas will offer relocation to Brisbane, including a "generous relocation package, or redeployment to other roles within Qantas". There will also be a programme of voluntary redundancies;
  • Financial impact: Consolidating heavy maintenance and other engineering initiatives will have an annual benefit of AUD70-100 million (USD69-99 million). One-off costs associated with the heavy maintenance restructure announced including redundancies will be approximately AUD50 million (USD49 million). [more - original PR]

Qantas: “Like the manufacturing industry, aviation maintenance is a labour and capital intensive sector. Our cost base in heavy maintenance is 30 per cent per cent higher than that of our competitors – we must close this gap to secure Qantas’ future viability and success. Qantas has invested heavily over the past 10 years in new aircraft that are more advanced, more efficient, attractive to our customers and require less maintenance, less often. But we cannot take advantage of this new generation of aircraft if we continue to do heavy maintenance in the same way we did 10 years ago. We have sought to minimise the impact on our people, while delivering the best result for Qantas," Alan Joyce, CEO. Source: Company statement, 21-May-2012.

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