More bad news for airline industry as Qantas announces 1,500 job losses

Australia’s flagship carrier, Qantas Airways, has confirmed today it is slashing 1,500 jobs as it battles with rocketing fuel costs.

The job cuts represent 4% of its global workforce of 36,000. 1,300 jobs are expected to go in Australia while call centres in Tucson, Arizona and London will be closed.

Furthermore, Qantas’ budget subsidiary, Jetstar, will also be affected. The group will see a freeze on its hiring program while a Jetstar cabin crew and pilot base in Adelaide will be closed by the autumn.

Fuel accounts for roughly one third of the airline’s expenses and it said its fuel bill was set to rise by AUS$2 billion (£970 million, $1.9 billion) in 2008/09.

Chief executive, Geoff Dixon, said he cannot guarantee there would be no further job losses. The airline has already cut capacity this year and Mr Dixon confirmed 22 older planes in Qantas’ 228-strong fleet would be retired.

Mr Dixon said the first step in the job losses will be to ask for voluntary redundancies. He admitted that conditions in the airline industry were the most challenging he had ever experienced. Not only is the industry being affected by soaring fuel costs, but rising food costs as well.

Yesterday, budget airline Ryanair announced it is to cut around 250 flights from London’s Stansted airport as it grapples with rising fuel costs and airport fees.

The airline’s chief executive, Michael O’Leary, recently warned that most of Europe’s airlines will go bust if oil prices remain high.

The International Air Transport Association (IATA) also warned the airline industry faced a grim outlook and passenger numbers would be affected by surging fuel costs and the deteriorating economic situation.

The airline industry has suffered of late. Earlier this month, US airline, American Airlines, said it would cut 7,000 jobs by the end of the year.

Furthermore, US carrier United Airlines recently announced plans to shed around 950 of its 6,600 pilots.

US carriers including ATA Airlines, Aloha Airgroup and Skybus Airlines all ceased trading in March.

EOS and Maxjet revealed they would cease flying in May while Delta Air Lines, which is merging with Northwest Airlines, recently announced it would cut 2,000 jobs and reduce its capacity by 10% from 2008 levels year-on-year.

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