When Qantas CEO Geoff Dixon signed a peace deal with its rebellious mechanics at 8.30 pm last night the media had spent a day running the company line that up to 3000 jobs could go.

At 10am today the real figure was revealed. There will be 1500 jobs going, out of a current 36,000 employees including Jetstar, no route closures were announced, but frequency of service would be cut and unless oil prices plummet fares will rise sharply on domestic routes.

The Qantas-slashes-itself-lightly media event this morning was the vaguest ever given by its management.

There was no profit guidance for the current financial year, no cost saving figures for the job cuts except for the obvious concession that 1500 jobs won’t pay for a feared extra $2 billion in fuel costs, and no clarity over what the airline meant by “further changes to our business model” in terms of operations, or the transfer of services from Qantas to Jetstar.

However, a few items stand out. Dixon says the deal with the maintenance staff (who have refused to work overtime for the past 10 weeks) stays within the company’s line on wages, which was no pay rise of more than 3% per annum.

The pilots’ union accepted a new five year 3% per annum deal on Wednesday, like the deal with the mechanics and engineers this agreement has to go to a vote of members.

The licensed engineers and mechanics association has secured other payment or leave concessions however which may point to a costly face saving formula for Qantas in lieu of their members getting the flat 5% per annum for three years it had insisted upon.

It is too soon to know if the “extras” will carry the vote for the maintenance crews. The pilot deal is considered a dead certainty.

For the long suffering Qantas customers who were scarcely mentioned this morning there is no precise estimate as to how soon flights will return to normal, whatever “normal” means because of high fuel and demand which Dixon conceded was slipping.

But he did say the longer fuel stayed high “the more the idea of airline consolidation will become reality”.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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