Qantas to Establish Sydney Engine Maintenance Centre of Excellence

Sydney, 31 August 2005

Qantas said today that it would commit to a new consolidated facility in Sydney for the maintenance of Rolls-Royce RB211 aircraft engines after an extensive review of Australian and offshore options.

The Chief Executive of Qantas, Mr Geoff Dixon, said finalisation of the facility would ensure a strong future for Rolls-Royce jet engine maintenance services in Australia.

Mr Dixon said Qantas was reviewing all its engineering and maintenance operations as a result of widespread consolidation and cost reductions occurring within aviation maintenance and repair operations throughout the world.

"We are extremely pleased that the first review completed has resulted in a commitment to an in-house solution," Mr Dixon said.

"There are more high quality alternatives for maintenance and engineering operations than ever before and globalisation and consolidation means that only the very best and most efficient operations will survive in an increasingly competitive environment."

Mr Dixon said Qantas would initially commit $7.6 million in additional capital to upgrading and consolidating current facilities.

"We will provide another $12 million within 12 months provided the facility reaches the necessary productivity figures set by the company."

Mr Dixon said Qantas had a well earned and highly valued reputation for excellence in engineering, maintenance and safety, which would never be compromised.

"Establishing what will be a Centre of Excellence (CoE) in Sydney represents a strong commitment by Qantas to preserving skills and capability in Australia.

"Qantas has already established a Centre of Excellence, Jet Turbine Services (JTS), for the maintenance of General Electric CF6 and cfm56 engines in Melbourne, in partnership with Patrick Corporation."

Mr Dixon said the Sydney facility would maintain the Rolls Royce RB211 engines used by Qantas.

"This is a vote of confidence in our staff and their commitment to improving our engine maintenance operations by identifying and introducing efficiency improvements and improved cost and turn-time targets."

The new Centre will employ around 300 skilled engineers and support staff.

Mr Dixon said changes to the Sydney facility, the establishment of JTS and associated activities would result in a further reduction of 60 positions from the existing Sydney workforce.

"While reducing staff numbers is always a difficult decision to make, we have been discussing the workforce requirements of the new centre with staff for more than 18 months," he said.

"We are confident that we will achieve this reduction through voluntary redundancies alone while retaining an appropriate balance of skills and experience to meet future operational requirements."

Issued by Qantas Corporate Communication (3316)