Qantas has confirmed it will slash 500 engineering jobs and close its heavy maintenance base in Melbourne - one of three in Australia - by August as part of cost-cutting measures.
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Ending weeks of speculation about the extent of the cuts, Qantas today said that it will consolidate its heavy maintenance work into bases in Brisbane and at Avalon Airport near Geelong following the closure of the facility at Melbourne's Tullamarine Airport with the loss of 422 jobs.
A further 113 positions will also be axed at Avalon Airport. But despite speculation about its future, the maintenance base at Avalon, which has a 660-strong workforce, will remain open and continue to perform work on its Boeing 747 jumbo fleet.
The airline's announcement came just as suspended Labor MP Craig Thomson began his speech to parliament, prompting some social media commentary that Qantas was trying to minimise the public relations fallout from the job cuts.
Paul Cousins, the president of the Australian Licensed Aircraft Engineers Association, also criticised the carrier for the timing of the job cuts, saying Qantas had been "quite adept" at masking bad news.
‘‘They are destroying the aviation industry in Victoria, step by step,’’ Mr Cousins said, referring to the cuts. ‘‘They are not saying there are closing Avalon but I can guarantee that it will be a slow death for Avalon because once the 747s fade away they will [close it].’’
Mr Cousin said today that Qantas had indicated in recent weeks that the Tullamarine base would be closed but the move signals a decline of a niche industry which required highly skilled workers.
Brisbane shift
As a result of the restructure, Qantas said heavy maintenance work on its Boeing 737 fleet will move from Tullamarine to its newer base in Brisbane, which employs 400 people
The closure of the Tullamarine base had been widely expected because it only performs maintenance on Qantas's single-aisle Boeing 737 fleet.
The airline has maintained that it cannot keep all three bases open because newer aircraft types do not require the same amount of work as the older plane types.
Qantas flagged the job cuts in February when it announced that it will consolidate its aircraft heavy maintenance and catering operations. At the time, it announced 500 redundancies, including 225 from engineering, 45 from planning, 65 from catering and 122 cabin crew.
$50 million cost
Shares in Qantas were 0.5 cents lower in recent trade to $1.425, but still just above an all-time low of $1.375 reached in October last year at the height of a damaging industrial dispute.
Qantas will continue to conduct line maintenance work at Tullamarine, employing more than 300 people.
Qantas told investors earlier this month that the consolidation of its maintenance and engineering operations will reduce costs by between $70 million and $100 million a year.
The airline said today that one-off costs from the closure of its Tullamarine base and the redundancies would amount to about $50 million, taking its so-called transformation bill for the second half of this financial year to as much as $260 million.