Economic News and Issues

SYDNEY, Australia (AP) -- Qantas Airways, Australia's flagship carrier, announced Friday it was slashing its work force by 1,500 people worldwide and abandoning plans to hire 1,200 more as it tries to deal with skyrocketing fuel costs. Chief executive Geoff Dixon said the cuts would total 4 percent of its total work force and include closing call centers in Tucson, Arizona and London, causing the loss of 99 jobs there. About 1,300 jobs will be lost in Australia and the rest overseas.

Qantas is also abandoning plans to increase its capacity by 8 percent in the 12 months to mid-2009, with no growth whatsoever now expected in that period, Dixon said. Also, 22 older planes in Qantas' 228-strong fleet would be retired.

Qantas' budget subsidiary Jetstar would also be hit by the cuts, with its hiring program suspended, including pilots. A Jetstar cabin crew and pilot base in the southern city of Adelaide will be shut by September.

"The jobs to be cut will be principally concentrated in non-operational areas, although operational positions will also go," Dixon told reporters. "Over 20 percent of our management and head office support jobs will be cut."

Dixon said the cuts were necessary to ensure that Qantas survives what he described as a crisis in the aviation industry caused by big rises in the price of fuel. Fuel accounts for about 35 percent of Qantas' expenses, and rising fuel costs are expected to add more than A$2 billion ($1.95 billion) to the company's fuel bills to the year ending mid-2009.

The first step in the job shedding plan would be to ask for voluntary redundancies, Dixon said.

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