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Qantas plans layoffs

February 27, 2014

The Australian airline Qantas says it will axe 5,000 full-time jobs as part of a restructuring in response to "tough" international competition. Qantas says its recent financial losses run into hundreds of millions.

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Australien Flugzeuge Quantas
Image: picture-alliance/dpa

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Qantas Airways on Thursday confirmed a loss of 154 million euros ($211 million) for its last half-year up until December and said it would slash 5,000 of its 32,000-strong workforce.

The cost-saving restructuring programme would take place over three years, it said, and would also include "significant" changes to its fleet and flight network.

Capacity increase

Qantas chief executive Alan Joyce said Australia had experienced a "giant wave of international airline capacity," amounting to 46 percent more availability since 2009.

"We are facing the toughest conditions Qantas has ever seen," Joyce said.

Transport Workers Union national secretary Tony Sheldon said "massive" job cuts and rumored sales of planes and terminals would be like a tradesman "selling his tools to pay a one-off bill."

Joyce has argued that Qantas is hampered by Australian law that restricts its access to capital inputs by foreign investors.

Its main domestic rival Virgin Australia is majority-owned by state-backed Singapore Airlines, Air New Zealand and the Middle East airline Etihad based in Abu Dhabi.

In December, Qantas' flight alliance partner Emirates said it did not have a "bottomless pit of cash" to help Qantas but was "carefully" watching the situation.

Government to expand foreign investment

Australian Transport Minister Warren Truss said on Tuesday that Australia's conservative government was drafting laws to allow Qantas to shift to majority foreign-controlled ownership.

Opposition Labor and the Greens want Qantas to remain a majority nationally owned operation. They say the government should provide an assistance package to Qantas and vow to block increased foreign ownership in the upper house Senate.

Dramatic changes in conditions

In the 1980s Qantas had 40 percent of Australia's outbound airline passenger market. Its share has dropped to 16 percent.

Australia's unemployment rate is currently around 6 percent – its worst in a decade – after its mining boom peaked alongside declines in its manufacturing sector.

ipj/ccp (AFP, AP)