26 February 2008

Qantas to hire 2000 crew on lower pay

A report in The Australian says that Qantas wants to use an agreement that is allowing it to hire 2000 new flight attendants at lower pay rates and longer working hours as a template for negotiations with other unions.

The airline has announced it would hire the 2000 long-haul flight attendants over the next two years in its biggest ever cabin crew recruiting drive and that the new international flight attendants, to be based in Sydney and Melbourne, were necessary to cater for expected growth.It expected to make 900 of the appointments by the end of the year.

Qantas last year renegotiated terms and conditions for newly hired flight attendants with the Flight Attendants Association of Australia international division.

The agreements protected the wages and conditions of about 3000 existing international flight attendants but allowed the airline to hire new cabin crew for about 25 per cent less pay and work them for longer.

The FAAA had been worried Qantas would set up overseas bases and managed to retain a 25 per cent cap on overseas hirings as part of the agreement.

The new flight attendants will work for a subsidiary company set up last year, Qantas Cabin Crew Australia.

They will work for about 240 hours per eight-week period, compared with 182 hours for existing staff.

Qantas chief executive Geoff Dixon said yesterday that the new jobs were a direct result of the agreement and its competitive terms and conditions.

He had earlier described the agreement as ground-breaking and said it would be the kind of deal the airline would need to negotiate with other unions.

"We are looking after the people still in the company and we'll be providing very, very good jobs for a lot of young Australians," he said.

Mr Dixon said Qantas was still an employer of choice but it needed to get efficiencies and flexibility in enterprise bargaining agreements. "Flexibility is one of the biggest issues that we need."

He did not see a problem with the impending roll-back of Work Choices, noting the airline had concluded in the past six months 40 per cent of its major enterprise bargaining agreements.

He said others were coming up but the airline had probably suffered less than five to six days of industrial disputes in dealing with its 16 unions over the past seven years.

The announcement comes a day after Qantas announced an impressive $618 million half-year profit.

The big profit prompted several analysts to reiterate their "buy" recommendations.

"While Qantas faces operational headwinds over the next two to three years, aggressive growth in its offshore offshoot Jetstar International and incremental route additions leveraging the US open skies should offset cycle weakness in our view," ABN AMRO said.

Goldman Sachs JB Were said the airline had significant flexibility to manage capacity and supply-demand impacts because of its two-brand airline strategy and fleet renewal. But it said this must be balanced against peaking in earnings momentum as softening demand and higher fuel costs created a downside risk in the 2009 financial year.

Qantas shares rose 4c to $4.49.

A Report by The Mole from The Australian