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Qantas AGM – surcharge cuts but 340 IT jobs to go
While Qantas announced at its AGM yesterday that it will cut its fuel surcharges on international fares from next week, it has also announced the outsourcing of its IT operations, resulting in the loss of 340 Australian jobs.
CEO Geoff Dixon said though that the airline would continue to monitor fuel prices before cutting the surcharges on domestic fares adding that the cost of fuel remains Qantas’ biggest challenge.
Nevertheless, the airline upgraded earnings guidance for fiscal 2007, with clearly shareholder returns being considered ahead of keeping Australians in work.
Chairman Margaret Jackson told shareholders at the airline’s AGM in Sydney, “In August we announced that after allowing for significantly higher fuel and restructuring costs, the group expected to deliver a result for 2007 in line with the prior year but as a result of recent improvements in our trading conditions, we now expect the current year’s results to exceed last year’s.”
Qantas also reported a net profit of $479.5 million for 2005/06.
The airline’s IT applications support and maintenance will be outsourced to India based global services Satyam Computer Services Limited and Tata Consulting Services, with Mr Dixon saying the transition to Satyam and Tata would take place over 15 months from November and would mean the loss of up to 340 Qantas IT positions.
Mr Dixon tried to allay the Australia job loss reaction by saying that Satyam and Tata have established operations in Australia and that one third of the positions in the companies doing Qantas work remaining in Australia.
The cuts to surcharges, which come into effect on tickets bought on or after Tuesday, October 24.
Report by The Mole
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