Hundreds of Qantas workers will lose their jobs after the airline announced it will close its call centres in Brisbane and Melbourne and shift some work to Tasmania.
Interstate rivalry, and state anger at the federal government, erupted on Wednesday as Qantas revealed it will keep its call centre in Hobart following confidential talks with the Tasmanian government, and offer displaced employees the option to move to the island state.
Unions have attacked the move, saying up to 590 workers in Queensland and Victoria will be out of a job and claiming that customer service will suffer.
"The number of jobs being cut is over 500 out of the existing network – that's more than half the current workforce in Australian call centres," Australian Services Union Victorian private sector branch secretary Ingrid Stitt said.
"It is very difficult to see how offshore call centres won't be part of their long-term strategy."
Qantas said the Brisbane call centre, which employs about 200 full-time equivalent employees, would close by 2016 and its Melbourne operation, with about 250 full-time equivalent employees, by mid-2015.
Qantas Domestic Chief Executive Officer Lyell Strambi said operating three call centres was inefficient as Qantas faced some of the toughest conditions it had ever seen.
"Having call centres in three different states presents a number of challenges including property costs, duplication of management and operational complexity," Mr Strambi said in a statement.
He said consolidating the three call centres into one location would maintain customer service while making savings for Qantas, which is seeking to cut $2 billion in costs under a three-year program.
Tasmanian Premier Will Hodgman declined to give details of how his state secured the future of its existing call centre and expanded its employee numbers from 200 to 250, saying only that he had "put forward an appropriate support package".
Employees in the Brisbane and Melbourne call centres will be offered redeployment to Hobart, where the airline will base its call centre operations by 2016.
But the Victorian government blasted its federal counterpart for "taking sides".
Victorian Planning Minister Matthew Guy said his federal coalition counterparts had offered incentives to move the call centre jobs to Tasmania.
"It's utterly unhelpful for the federal government to be assisting Tasmania to move jobs out of Victoria to Tassie," Mr Guy said.
Victoria had made an offer that was not supported by Qantas, he said, "but we don't like the idea of the feds taking sides in a state-by-state battle".
Mr Hodgman said he was unaware of any federal government financial assistance.
"We would roll out the red carpet for anyone who wants to relocate from Victoria or Queensland," he said.
Australian Services Union Queensland Secretary Julie Bignell said Queensland Premier Campbell Newman had ignored requests to meet with the union over the future of the Brisbane call centre.
However Mr Newman said Qantas, which has moved heavy maintenance and catering to Brisbane in the last year, needed to make its own business decisions.
"I certainly expect that Qantas will look after the families affected," he said.