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Qantas Statement on Engineering

Sydney, 21 October 2005

The Chief Executive Officer of Qantas, Mr Geoff Dixon, said a final decision on the restructure would be decided within three to four months.

Mr Dixon said Qantas had no realistic alternative than to make widespread changes to this part of the airline.

"Maintenance Repair Operations (MROs) for airlines are changing rapidly throughout the world, with a big push towards scale and lower cost locations.

"The competition between MROs is becoming as competitive as the rest of the industry," he said.

Mr Dixon said Qantas Management was acutely aware of its obligations to its staff.

"We are one of the best employers in Australia across the entire airline, with a very low attrition rate and conditions substantially above other Australian industrial companies.

"We are also acutely aware of our obligation to maintain the company's unparalleled record for safety and operational excellence. This would never be put at risk."

Mr Dixon said Qantas had told its engineering and maintenance workforce that rapidly changing conditions and competition in the industry left it with three options:

* Do nothing and continue business as usual.
* Restructure and relocate extensively within Australia.
* Move significant parts of the business offshore.

"The first option is not realistic, so we will need to decide between the other two", he said.

Mr Dixon said he preferred the onshore option. "However, if we cannot, by working together with staff, make the business globally competitive we will have to pursue the alternative."

Mr Dixon said the Qantas Board would soon have to decide on a fleet acquisition program that could cost close to $20 billion on top of the ten year $18 billion program which would conclude in 2010.

"Investment decisions of that magnitude can only be contemplated if we are confident of achieving world best practice in all sections of the business.

"Our people have given great support in the transformation of the company to date.

"Unfortunately events surrounding aviation here and overseas require that transformation to be accelerated even further."

Mr Dixon said those opposed to the airline's strategies needed to realise that Qantas, unlike just about every other legacy airline in the world, had increased employment substantially in recent years.

"This company has 10,000 more people than it had ten years ago as a result of meeting globalisation head-on and by an aggressive investment policy in aircraft, product, technology and customer service."

Mr Dixon said Qantas was one of Australia's largest private sector employers with significant operations in all States and Territories.

"There are 38,000 employees, with 6,900 in engineering and maintenance, including over 550 apprentices. Over 93 per cent of our jobs are located in Australia - well above the industry average."

Issued by Qantas Corporate Communication (3342)
Email: qantasmedia@qantas.com.au