Qantas has started a major pilot redundancy program for the first time in decades that will ultimately target as many as 300 pilots it believes are excess to the financially troubled and shrinking airline's needs.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The company has not specified how many jobs it will target in the first round, but it is believed to be about100. While it made initial contact with the pilots on Tuesday afternoon, it has not given them details on the redundancy package.
Fairfax Media believes they will be offered one year’s pay.
Pilots received the news via email from the chief pilot Dick Tobiano, who said that changes to the airline’s network and fleet that were part of its cost reduction program were responsible for the move.
Most of those immediately targeted will come from the ranks that fly the Boeing 767 and B747, which are being retired early.
Qantas has been operating with excess pilots for more than a year and managing the surplus by using leave entitlement and leave without pay.
But it’s crunch time and the airline says it can no longer manage using these levers.
In the first instance Qantas will attempt to meet its targets for captains and first officer retrenchments voluntarily, but it is unlikely to achieve this. Ultimately, it will probably move to involuntary redundancies.
Qantas made a loss of $250 million in the six months to December and is expected to report another substantial loss in the current six months.
The job losses, which will make pilots redundant for the first time in more than 40 years, are part of a broader plan to cut 5000 jobs as the carrier looks to return to profitability.
Mr Tobiano said he would provide pilots with more details of the company's offer after consultations with the Australian and International Pilots Association. ''It is anticipated that exits would be staggered corresponding with network and fleet reductions,'' he said.
Qantas has been shrinking its international division. The only firm near-term addition to the fleet will be A330s transferred from Jetstar to Qantas as the budget carrier receives new 787-8 Dreamliners.
Qantas in February postponed indefinitely the delivery of eight A380s and it has not yet decided whether it will exercise 50 options and purchase rights over 787-9s that would revitalise its international division.
It is understood the pilot redundancies will have no bearing on its decision to firm up orders for 787-9s.
Mr Tobiano said he wanted to emphasise to pilots that the decision to start talks about voluntary redundancies had been made as a result of the challenges faced by the airline.
''[It] in no way reflects on the contribution you make as pilots,'' he said. ''I want to thank you for your ongoing patience and professionalism.''
Qantas plans to cut 5000 jobs over the next three years, with 4000 of the job losses to be completed by June 2015, as part of an effort to slash $2 billion from its cost base.
