Embattled Australian flag carrier Qantas said on Monday it will axe 500 jobs in its heavy maintenance and engineering operations as part of a restructuring to help slash costs.
The move follows an 83 percent slump in first-half net profit in the six months to December and an announcement it would delay the delivery of two A380 superjumbos by three years as part of spending cuts.
In the reorganisation, Qantas will cease heavy maintenance at Tullamarine airport in Melbourne by August, with work being consolidated in Avalon, another facility near the Victorian state capital, and the eastern city of Brisbane.
Of the 500 jobs cut, which were signalled in the profit announcement in February, 422 will be lost at Tullamarine, while 113 will go at Avalon. A total of 35 new positions will also be created.
Chief executive Alan Joyce said there was not enough work for three separate facilities, and that the airline expects to save up to Aus$100 million (US$99 million) annually by the consolidation.
"Like the manufacturing industry, aviation maintenance is a labour and capital-intensive sector. Our cost base in heavy maintenance is 30 percent higher than that of our competitors," he said.
"We must close this gap to secure Qantas' future viability and success.
"Qantas has invested heavily over the past 10 years in new aircraft that are more advanced, more efficient, attractive to our customers and require less maintenance, less often," he added.
"But we cannot take advantage of this new generation of aircraft if we continue to do heavy maintenance in the same way we did 10 years ago."
One-off costs from the closure of its Tullamarine base and the redundancies would amount to about Aus$50 million, the airline said.
Qantas has been struggling with high fuel costs which have eroded profits, as well as Joyce pulling all Qantas planes out of the skies for 48 hours last October as part of a dispute with staff.
That row, over plans to shift the focus of its ailing international arm to Asia, was ultimately terminated by an order of the country's industrial relations umpire but it cost Qantas Aus$194 million.
Joyce attempted to soften the jobs blow by indicating there was plenty of work elsewhere for skilled engineers, particularly in Australia's booming mining industry.
"Qantas maintenance engineers are highly skilled and have translatable skills that are sought after by other businesses," he said.
"Dozens of companies in mining and resources, engineering and manufacturing who are looking for highly skilled workers have contacted Qantas seeking to make contact with affected workers."
Despite the cuts, Qantas still employs around 30,000 people in Australia.