Business, Economics and Jobs

Australia: Qantas fires 500 workers to cut costs


Qantas planes, with flying kangaroo tailfins, line Sydney airport — more so now that pilots and engineers are striking.


Torsten Blackwood

Qantas Airways, Australia's flagship carrier, has announced it is firing 500 workers, arguing that its new fleet of planes requires less maintenance.

And with the airline planning to retire its 747 class of aircraft, there are now fears more jobs will be shed in the coming months, Australia's ABC reported.

The move follows an 83 percent slump in first-half net profit in the six months to December, according to Agence France-Presse, and comes as high fuel costs and weak demand take a toll on airline profits.

As part of broader spending reductions, Qantas has also said it would delay the delivery of two A380 superjumbos by three years.

More from GlobalPost: Australian air travel in chaos as Qantas standoff drags on (VIDEO)

The airline will close its Tullamarine facility in Melbourne, the capital of the southern state of Victoria, with all heavy maintenance to be carried out at its bases in another Victorian city, Avalon, and Brisbane, in the northeastern state of Queensland.

By merging its maintenance facilities, the airline said it would save up to 100 million Australian dollars ($98.4 million) annually, Reuters reported.

"Like the manufacturing industry, aviation maintenance is a labor and capital intensive sector," Chief Executive Alan Joyce said in a statement.

"Our cost base in heavy maintenance is 30 percent higher than that of our competitors — we must close this gap to secure Qantas' future viability and success."

The federal secretary of the ALAEA union, Steve Purvinas, told the ABC that the news was made more shocking in light of the $552 million profit made by the airline last year.

Qantas already announced the axing of another 500 positions, in catering and engineering, in February.