Qantas to close Australian maintenance plant, adding to manufacturing industry woes

SYDNEY, Nov 8 (Reuters) - Qantas Airways Ltd said on Friday it is closing an Australian maintenance plant next year, delivering another blow to the country's ailing manufacturing sector.

Qantas said its heavy maintenance facility in Avalon in Victoria state was no longer viable because the gradual retirement of its Boeing 747 fleet is reducing the factory's workload.

The airline said it will look at other sites to carry out the remaining work, including specialist Boeing 747 maintenance providers in Germany, Singapore, Hong Kong, Britain and the United States.

The Avalon facility employs around 300 people. A minority of jobs will be redeployed, the airline said.

Qantas Domestic Chief Executive Officer Lyell Strambi flagged further reductions in the airline's 4,400 engineering staff in Australia.

"Our fleet is now the youngest it has been in two decades and more modern aircraft have up to half the maintenance needs of older ones," Strambi told reporters in Sydney. "This will mean ongoing changes to our engineering operations in order for Qantas to remain competitive."

The planned closure comes just months after Ford Motor Co revealed it will shut its two Australian auto plants in October 2016, blaming a strong currency and high costs.

The closures of the two plants, also in Victoria state, will cost around 1,200 jobs from Ford's 3,000-strong Australian workforce.

Qantas said the closure will result in a one-off cost this financial year of A$28 million, with net benefits expected to be realised from full-year 2015.

The airline will retain a heavy maintenance facility in Brisbane and continue to conduct the majority of its maintenance in Australia, Strambi said, dismissing suggestions Qantas would move the bulk of the work to Asia.

Qantas shares were down 0.2 percent at A$1.22 in early trade, in line with the broader market.