November 07, 2013
Qantas Airways has announced it will close down one of its two heavy maintenance bases in March, rejecting a union’s last-ditch proposals to keep the facility open.
The decision to close the base at Avalon Airport, near Melbourne, means that Qantas will be left with just one heavy maintenance facility, in Brisbane. The Avalon base primarily handles Boeing 747-400 maintenance, but the gradual phase-out of this aircraft type is reducing its scheduled workload.
While all signals from Qantas had been pointing to a closure decision, the announcement came sooner than expected.
Lyell Strambi, who heads the Qantas domestic operation, says the declining 747 workload made the Avalon base “unviable.” After a period of review, the carrier could find “no workable solution to continue operating the sub-scale maintenance facility.”
The Avalon closure is the latest step in Qantas’s consolidation of its maintenance operations. The carrier ceased heavy maintenance at its Tullamarine facility at Melbourne Airport in 2012, and has previously indicated that its long-term plan is to have just one heavy maintenance base.
Qantas announced in September that Avalon’s future was under review, and has been holding discussions with the Australian Licensed Aircraft Engineers Association (ALAEA) since then.
The main problem, Qantas says, is that there would be no scheduled 747 work for the equivalent of five months each year for the four years from March 2014. The carrier had 36 747s in 2004, but has now cut this to 15 and expects to have just 10 within three years. “No business could afford to continue operating a facility under those circumstances, says Strambi.
The next order of business for Qantas is to decide how to handle heavy maintenance needs for its 747 fleet. Its options are to perform the work at the Brisbane facility or outsource it. The airline will assess its Australian alternatives and examine specialist 747 maintenance providers in Germany, Singapore, Hong Kong, the U.K. and the U.S., Strambi says.
One-off costs related to the closure – including redundancy payments – will be about A$28 million ($26.5 million) in the 2014 fiscal year, and net savings will be realized beginning in fiscal 2015. There are 53 Qantas employees at Avalon, along with 246 staff working for Qantas through a contractor.