Qantas to cut 1000 jobs as CEO Alan Joyce takes pay cut

AIRLINE staff face an uncertain Christmas as CEO Alan Joyce axes workers and cops a $1 million cut to his pay packet.

QANTAS will axe at least 1000 jobs and cut the pay of chief executive Alan Joyce and the airline's board as the national carrier looks to achieve cost savings of $2 billion over the next three years.

The jobs to go could include pilots, flight attendants, maintenance and back office staff.News_Image_File: Qantas Group chief executive officer Alan Joyce. Picture: AFP

And the 10-million member Frequent Flyer program could also be sold as the airline slashes costs.

Mr Joyce's $3.3 million pay will be cut by at least 38 per cent this financial year because of the airline's poor performance - which would leave him with a $2 million pay packet.

Mr Joyce insists he has the backing of the board, despite the record first half loss.

The federal opposition has called on the government to help Qantas workers who will lose their jobs, amid bail-out discussions and calls for Mr Joyce to resign.

In a market update, Qantas said it expected to report an underlying before tax loss of $250-300 million for the first half of the 2013-14 financial year, and that trading conditions had experienced a "marked deterioration" in November in particular, with passenger loads and yields below the already negative trends for the year to date.

Qantas shares went into freefall, with the stock plunging as much as 17 per cent to 99.5c, before ending the day down 11.2 per cent, at $1.07.

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Virgin v Qantas battle rages

It comes as Virgin chief executive John Borghetti appealed in an open letter to the federal government for Virgin to be given the same level of support as any offered to Qantas.

"Any measures that the government plans to take to support Qantas should be offered to Virgin Australia," Mr Borghetti's letter states.

"If any government support was given to the dominant player, we would expect the same level of support."

Richard Branson says Qantas to blame for its woes

Announcing the cuts, Mr Joyce said Qantas was in an unfair playing field in both international and domestic markets as a result of foreign government investment in rival airline Virgin Australia.

He said a joint "Qantas-Virgin sale act" would level out a "distorted playing field" and place the same ownership restrictions on Virgin that apply to his airline.

The two airlines have been involved in an increasingly acrimonious dispute over Virgin's $300 million-plus capital raising and the role of its partner airlines, Singapore Airlines, Etihad Airways and Air New Zealand, who are set to increase their stakes in the airline.

Mr Joyce has been in discussions with the Federal Government about restrictions on Virgin Australia's operations in Australia.

"We're talking to the government about a range of options," he said.

Jetstar's future at Avalon in doubt

He said the company needed to act urgently in order to stem the losses.

"We will do whatever we need to do to secure the Qantas group's future," he said.

"The challenges we now face are immense - but we will overcome them and we will continue to build and stronger and better Qantas for Australia."

News_Image_File: Source: AAP

'Carbon tax hit airlines hard'

Prime Minister Tony Abbott said Qantas was under significant competitive pressure.

"We grieve for every worker who's job has been lost, we grieve for them, we appreciate just how difficult this is for them and their families," he said.

"The best thing that we as a government can do for the workers of Australia ... is do our best to create and strong and prosperous economy."

Responding to the news of job cuts, Environment Minister Greg Hunt said the carbon tax was putting pressure on Australia's aviation industry.

"The Australian aviation sector is clearly a sector under real pressure," Mr Hunt said.

He said the Qantas 2013 annual report highlighted the carbon tax added $106 million to the airline's operating expenses and had added $47.9 million to the Virgin airlines group.

"The costs are real," Mr Hunt said.

Opposition Leader Bill Shorten said many workers would be having difficult discussions with their families over Christmas.

"The most immediate focus of the parliament and the government needs to be helping these people affected by this news," he said.

"We expect them to do so ... we expect them to move quickly."

Greens deputy leader Adam Bandt said it was "devastating news" to hear of the job losses.

"There is a case for the government to step in and secure the future of our national airline but has to be done on the right conditions," he said.

"We have to know more about how Qantas spends money to make sure if there is intervention it is done on the right terms."

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Calls for Qantas boss to step down

The news of Qantas job cuts prompted calls for Mr Joyce to be sacked and for Qantas' budget arm, Jetstar, to be wound back.

"What is likely is that we will not have a Qantas in 12 months if this board of jokers remains in place," Australian Licensed Aircraft Engineers' Association federal secretary Steve Purvinas said.

"The one job that needs to go more than anyone else's is Alan Joyce's.

"And that life-draining side kick of an airline Jetstar needs to be merged back into the Qantas main fleet."

Independent Senator Nick Xenophon and Labor Senators Glenn Sterle and Alex Gallacher called on Alan Joyce and the Qantas board to resign.

"The only way for Qantas to get out of this nosedive is for Alan Joyce and the board to resign," Senator Xenophon said.

He said it was imperative the government take a "forensic look" at Qantas's finances.

"Before the government considers offering any assistance it should be done on the condition that Alan Joyce and the board have to go," he said.

He was backed by Labor senators Glenn Sterle and Alex Gallacher, who were Transport Workers Union officials before they entered parliament.

"How many more jobs have to go? How many more families have to suffer at the hands of Alan Joyce, (chairman) Leigh Clifford and the board that currently presides over Qantas's future?" Senator Sterle said.

Senator Gallacher added: "It's ironic that as a mathematician, Joyce seems only able to subtract value from Qantas shares, and subtract numbers of employees from the workforce."

Many readers commenting on the news also called for Mr Joyce to quit.

But Mr Joyce said he was unfazed by Senator Xenophon's call.

"I think Senator Xenophon has been calling for my resignation every other week so I'm not surprised by that," he said.

Mr Joyce said he was in discussions with the Australian Council of Trades Union about the job cuts.

But he would not reveal the areas under the knife.

"We won't be going into further breakdowns," he said.

ACTU general secretary Dave Oliver called for the federal government to step in.

"This is not the time for (Tony) Abbott and (Joe) Hockey to drag their heels,'' Mr Oliver said.

"The ACTU expects the government to step in to ensure a strong, viable national carrier that provides well-paid, secure, decent jobs."

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Qantas said it had already reduced the group's unit costs, excluding fuel, by 19 per cent since the 2008-09 financial year, including by 5 per cent in 2012-13.

However, it said these actions were "not enough to deal with the current situation".

It said the Qantas Group will launch an immediate review of all planned capital expenditure to achieve further substantial cost reductions to ensure the business generates positive net free cash flow from the 2014-2015 financial year.

It will also launch an immediate review to identify "structural changes" that could "potentially unlock sources of capital and value for shareholders".

It said no options would be excluded from the review.

"We will focus relentlessly on cutting costs and improving productivity, while maintaining our competitive advantages as a business," Mr Joyce said.

- with AAP