Amidst a slowdown in domestic demand, Qantas has reportedly warned staff they face being made redundant in an effort to cut costs and “improve efficiencies”. Some media reports suggest that as many as 1,200 middle management jobs could be axed but Qantas says that number is inaccurate.
The news comes as Qantas rival, Virgin Australia announced plans to trim its domestic schedule by at least 2 per cent and remove five aircraft from its fleet in a bid to stimulate demand and drive up revenues. Virgin Australia has already announced plans to cut 750 jobs as part of its own cost cutting efforts.
Virgin will cut two Airbus A320 aircraft from the fleet of its budget brand Tigerair, along with three regional Fokker 100’s by the end of June 2020 as it rationalises it’s scheduled and route network.
The airline has also announced plans to axe its Melbourne – Hong Kong route as months-long pro-democracy protests continue to dampen demand. Instead, Virgin plans restarting its Melbourne – Denpasar route and will begin flying between Brisbane and Tokyo Haneda at the end of March.
But while Australian aviation is clearly experiencing a slowdown, some of the extreme cost-cutting measures have stoked criticism of the remuneration package being paid out to Qantas chief executive Alan Joyce.
Last year, Joyce was paid over $16 million USD – not only more than 270 times the average average but also more than any other Australian CEO.
Qantas has downplayed the scale of the job losses and says that it continues to grow its workforce of cabin crew, pilots and ground staff. The airline actually plans on increasing domestic capacity in order to better compete with Virgin and is expected to announce a major domestic fleet renewal order next year.
Either by the end of this year or early 2020, Qantas is also expected to say whether it will pursue Project Sunrise flights – direct ultra-long-haul flights between Europe and the North American east coast.