Bloomberg News

Qantas Says 150 Pilots on Unpaid Leave After Capacity Cuts

January 04, 2012

(Updates with closing share price in sixth paragraph.)

Jan. 4 (Bloomberg) -- Qantas Airways Ltd., Australia’s biggest carrier, said about 150 of its more than 2,000 pilots were taking unpaid leave after it cut services in a bid to revive unprofitable international operations.

Some employees had requested time off to work for other carriers, the Sydney-based airline said in an e-mailed reply to questions today, without elaboration. The carrier also allowed pilots to go on unpaid leave after cuts following the 2008 financial crisis, it said.

Qantas needs fewer pilots after it announced a reduction in overseas services in August following losses of about A$200 million ($207 million) a year on international routes. The surplus of pilots may reach as many as 500 by 2015 as restructuring plans progress, according to its pilots union.

“Our young guys are voting with their feet,” Richard Woodward, vice president of the Australian & International Pilots Association, said by phone today. “Because of retrenchment and downsizing, they’re going directly to our competitors, which will exacerbate our problems.”

Many on-leave pilots are joining Gulf-based carriers, such as Emirates Airline, Etihad Airways PJSC, and Qatar Airways Ltd., Woodward said. These airlines are challenging Qantas on Australia-Europe routes as they build up their long-haul fleets.

Qantas rose 4.4 percent to A$1.55 at the close of Sydney trading, compared with a 2.1 percent gain in the benchmark S&P/ASX 200 Index.

The carrier is separately in government-backed arbitration with pilots over pay and conditions following protests by workers last year. The process began after Qantas grounded its mainline fleet in a showdown with unions. The airline had also faced sporadic stoppages by engineers and baggage handlers that had disrupted flights and bookings.

--Editors: Neil Denslow, Dave McCombs

To contact the reporter on this story: David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net


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