Qantas to Reduce Staff

SYDNEY, 09 April 2003

Qantas Airways said today it would make 1,000 employees redundant between now and 30 June as it responds to lower passenger numbers flowing from the war in Iraq, the outbreak of Severe Acute Respiratory Syndrome and general economic conditions.

Qantas Chief Executive Officer Geoff Dixon said the redundancies were part of an ongoing restructuring program the company was undertaking in response to the changing aviation market.

"We regret the need for this action. However, it is vital we move quickly to protect our position in a very competitive and difficult industry," he said.

"Qantas is one of the more successful airlines in the world today. We will only remain so by ensuring our labour and capital expenditure base matches current market activity."

Mr Dixon said the restructuring program would involve 1,700 positions and include:

* 1,000 redundancies;* 400 permanent positions being eliminated through attrition by 30 June; and* 300 permanent positions being converted from full-time to part-time.

The reductions will affect nine per cent of management and five per cent of wage and salary employees.

"We are very conscious of the effect these decisions have on the individuals involved and their families," Mr Dixon said. "There will be extensive consultation and we have in place professional services for all those affected."

As part of the restructuring program, Mr Dixon said Qantas would also:

* extend the accelerated leave program, which has seen the equivalent of 2,500 people take leave between March and 30 June, to include the equivalent of 1,000 employees on leave between July and September; and* make further ad hoc changes to flying schedules until conditions show improvement.

Mr Dixon said Qantas announced on 28 March that it would reduce planned international flying by around 20 per cent between April and mid-July.

"We are also continuing to closely monitor all discretionary and capital expenditure," he said.

Mr Dixon said the global aviation industry had shed over 400,000 jobs between September 2001 and the beginning of the war in Iraq. In addition, airlines had announced plans to cut tens of thousands of more jobs since the outbreak of the war and SARS.

"The global aviation industry is under severe strain," Mr Dixon said.

"Our aim is to protect the jobs of the vast majority of Qantas employees, to ensure we continue to meet the needs of our many shareholders and to position ourselves for the inevitable recovery.

"However, we cannot rule out further restructuring, including redundancies."

Qantas currently employs about 35,000 staff. The Qantas group has increased staff numbers by more than 2,000 since September 2001.

Issued by Qantas Corporate Communication (2905)