On the verge of peak oil, the global aviation industry will be forced to opt for consolidation with 100,000 job cuts by the end of this year, Qantas chief executive Geoff Dixon said.

“Right now the global aviation industry faces, not a shock or a blip, not even a crisis, but a permanent transformation,” he said.

“The drivers of this transformation will be globalisation…and the result will be a new aviation world order.”

With airlines shrinking their sizes to mitigate the impact of fuel prices, massive job redundancies and even shutdowns were imminent, he said.

“It is likely that 100,000 jobs worldwide will be lost before this calendar year is out,” he said.

“In the past six months alone, 24 airlines have closed down completely. The major US carriers are now planning to ground 465 aircraft – that is more than twice the size of the Qantas fleet.”

Mr Dixon said the aviation industry has been under a heavily regulated system based on more than 3,500 bilateral treaties between governments, but the current oil crisis would accelerate the move towards investment liberalisation and global consolidation.

“This fuel emergency may be the catalyst for an accelerated push, at last, towards industry globalisation,” he said.
 
“Over time, consolidation will transform aviation, it will produce a few, very large and extremely efficient global airlines with a portfolio of interests and brands like Air France and KLM.”

He said the key challenges for the industry will include achieving global standards of efficiency, settling effective commercial arrangements and sustaining strong brands.

According to Mr Dixon, the recently announced 1,500 job cuts, along with its fleet renewal and market segmentation initiatives will help the airline secure its position in the market.

He said: “Over the next twelve years may more airlines will vanish, unable to cope with high fuel prices, of they will be swallowed up in takeovers or mergers.

“The work that Qantas has done to date means we will avoid any such dark destiny. And if we get the commercial strategies and the policy framework right, then Australia has a very strong future in the new aviation world.”

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