Qantas Airways has achieved one of the most dramatic airline turnarounds in recent history, and its engineering division has played a major role. From a net loss of AU$2.8 billion ($2.07 billion) in the fiscal year through June 2014, Qantas reached a record net profit of AU$1 billion for the 2015-16 year.
The carrier is midway through the last year of a three-year transformation program, which is expected to result in a cumulative AU$2.1 billion in savings. This includes about 5,000 job cuts, significant fleet moves and major structural changes.
In the engineering division, transformation initiatives have included consolidating almost all heavy maintenance into one facility in Brisbane. As well as job cuts, maintenance workers have had to accept the revised contract terms that are being negotiated with all Qantas labor groups.
The airline is now ready to start growing its international operation again and has exercised long-delayed options to purchase Boeing 787-9s. They are expected to begin arriving in October 2017, although Qantas is not yet ready to reveal MRO plans for the new model.
The engineering division has also helped with fleet improvement through extensive cabin reconfigurations for existing aircraft types, and is preparing to install inflight Wi-Fi across the fleet.
Overall, Qantas is running a more productive and efficient MRO operation and has kept a substantial amount of its heavy maintenance work in Australia. Executive Manager of Engineering Chris Nassenstein answered a few questions about the transformation for Aviation Week.
The engineering division has obviously been a pretty big contributor to Qantas’s turnaround. What have been the major effects of these changes for the division? Have all the new labor agreements been completed on the engineering side, or are you still working on some?
All parts of the Qantas Group have contributed to our transformation program, which ensures our business is agile and competitively sustainable. In engineering, we have made a number of changes to the way we work to ensure we are always working efficiently. As a result of these changes, and those in other areas of the business, we have been able to reduce the amount of time our aircraft spend on the ground. This has allowed us to add routes to our international and domestic networks.
We have the majority of our enterprise business agreements (EBA) completed. More than 35 EBAs have been agreed to groupwide, and they include an 18-month wage freeze. We still have to complete a new EBA for our aircraft maintenance engineers, since the current agreement expires at the end of the year. They are one of the last major engineering groups to negotiate a new agreement.
One of the big changes has been the consolidation of heavy maintenance at Brisbane. How is that expanded facility working out? What benefits are you seeing from that move?
The line and base maintenance facilities are working well in Brisbane. Not only are the teams carrying out maintenance checks there, they also have been completing reconfigurations on our [Airbus] A330 fleet as well as installing Wi-Fi capabilities on our trial [Boeing] 737 aircraft. The teams are working extremely well, and engagement is very high in Brisbane.
What progress are you making on the major fleet-refurbishment and cabin-reconfiguration programs for the A330s and 737s? How many remain to be completed?
We have recently completed the reconfiguration of our A330 fleet, including the introduction of business suites with fully reclining, lie-flat seats. Our final 737 to be reconfigured has just entered maintenance and will be completed by the end of 2016. We are always looking to deliver the best inflight experience for our customers, in both comfort and entertainment. The feedback from our customers regarding the refurbishments has been extremely positive, especially on the domestic business-class product on the A330s.
What progress are you making in further reducing turn times for your 737s to 35 min.?
We are making good progress in this area, but this is not just the work of the engineering division. All parts of the business—including catering, cleaning, towing, baggage handling and flight crew—are contributing to the goal of 35-min. turn times on our 737s.
QantasLink opened its new Boeing 717 heavy maintenance base in Canberra last year. How is that facility performing?
The hangar facility in Canberra is first-class, with major modifications to suit 717 activity, which now allows for scalability. We have a highly engaged workforce that is committed to safety and continuous improvement.
Qantas Fact File
Basics: Qantas Airways is one of the Asia-Pacific region’s major full-service airlines and is the parent of low-cost carrier Jetstar. The group’s Australian domestic network covers one of the most desirable Asia-Pacific markets, which is why the airline faces a broad range of competition on international routes. The airline was founded in 1920 and privatized in 1995. In 2013, Qantas formed a strategic partnership with Emirates. Its other major partners are American Airlines and China Eastern Airlines.
Fleet: The group has 303 aircraft, mainly operated by the parent carrier, the QantasLink regional airline and Jetstar. The mainline fleet comprises 12 Airbus A380s, 11 Boeing 747-400s, 28 A330s and 75 737-800s. Jetstar has 77 A320-family aircraft, 11 787-8s and five Bombardier Q300s. The regional fleet includes Bombardier turboprops and Boeing 717s.
MRO: The engineering division has about 4,000 employees out of the airline’s total of 29,000. Most of Qantas’s heavy maintenance and aircraft refurbishment work is now done in Brisbane. Heavy maintenance facilities in Tullamarine and Avalon—both near Melbourne—were closed during the airline’s restructuring, and the Brisbane facility was expanded. This site handles A330 and 737 work. Heavy checks are outsourced for fleets with fewer aircraft such as the 747-400 and A380. Elsewhere in the group, Jetstar has a heavy maintenance facility for A320s in Newcastle, and QantasLink has maintenance bases for its 717s near Canberra and its Bombardier turboprops in Tamworth.