Australia's Qantas to Axe 2,000 Jobs: Report

Australia's Qantas Airways will sack 2,000 staff as soon as next week to combat sharply rising fuel costs, local newspapers said on Thursday.

Qantas passenger jets parked at their terminal at Sydney Airport.
Mark Baker
Qantas passenger jets parked at their terminal at Sydney Airport.

The carrier, already hard hit by strikes over a long-running pay dispute involving engineers, would slash 5 percent of its 36,000-strong workforce, as well as unprofitable routes into Asia and at home, the Telegraph newspaper said.

Flight crew, managers, engineers and ground staff would all face the sack after Qantas chief executive Geoff Dixon last month warned rocketing fuel prices had sparked the "greatest crisis in aviation history", prompting a review of operations.

Qantas, Australia's biggest airline, reported net profit of A$617.6 million (US$605 million) for six months ended December, doubling its first-half earnings on strong demand for air travel and trimmed fuel costs.

The carrier, the world's 10th-largest by market value, said in May it still expected to achieve its target of 40 percent profit growth.

But in the same month, ratings agency Standard and Poor's revised its outlook for Qantas to negative from stable, reflecting pressure on the carrier's cash flow from a fuel bill expected to rise by $2 billion in 2008/09 with jet fuel hovering around $175 a barrel.

Qantas is also refusing to budge in a long pay dispute with engineers demanding 5 percent wage rise and has been forced to cancel more than 200 domestic flights over the last month.

That dispute could worsen after the airline and the International Airline Pilots Association agreed this week to give long-haul pilots a 3 percent pay rise, tied to a 1 percent lift in yearly company pension contributions for five years.

Dixon told staff the fuel price crisis exceeded the impact of the two Gulf wars, the September 11 airline attacks on the United States in 2001, Asia's Severe Acute Respiratory Syndrome, or SARS, crisis and past oil shocks.

"The overall view of our industry is dire," Dixon said, according to the Telegraph.

To contain costs, Qantas is looking to permanently move many critical maintenance jobs offshore by employing engineers in London and the United States.