Qantas to get even tougher
By Scott Rochfort
May 3, 2006
THE relationship between Qantas and its 37,000-strong workforce is likely to deteriorate further in the coming year, with the airline looking to increase its cost-cutting targets.
As Qantas looks at expanding into other transport modes such as rail, it warned yesterday it would have to revise its five-year program to slash $3 billion in annual costs to buffer itself against the recent surge in fuel prices. The airline has warned this may include further cuts in labour costs.
"Clearly for us at these fuel prices … we have to make changes. The targets we set ourselves won't be large enough," Qantas chief financial officer Peter Gregg said yesterday.
"When you're sitting in a business where two of the cost elements of your total expenditure comprise more than 60 per cent - and that's labour and fuel - you have very limited responses … other than to reduce your costs," he said.
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There is speculation Qantas might accelerate the expansion of its Jetstar International subsidiary to speed up its austerity drive, and possibly cut the wage conditions of a wide segment of its staff, from pilots and cabin crew to engineers.
Qantas is already pushing in enterprise bargaining talks to slash the overtime provisions of 2500 maintenance workers, a move unions say will result in a 30 per cent cut in take home pay.
Australian International Pilots Association president Ian Woods said: "If they are so serious [about cutting costs] the first thing they would do is remove their bonuses and get on board with the rest of the people in Qantas."
Qantas senior management team earned $3.8 million in "cash incentives" last financial year, with chief executive Geoff Dixon earning half of that figure.
Mr Dixon and Mr Gregg also made $1.8 million in "equity benefits" on top of their respective $1.9 million and $1.2 million base salaries.
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