Qantas fallout: a round-up of industry opinion
The federal government's announcement of its intention to amend the Qantas Sale Act to potentially allow increased foreign investment in the airline is one of the hottest topics in the country. This is what a cross-section of opinion leaders has to say...
Prime Minister Tony Abbott, Deputy Prime Minister Warren Truss, Treasurer Joe Hockey:
"The government will move to a single regulatory framework for all Australian international airlines.
"As soon as possible, legislation will be introduced to remove the foreign ownership restrictions and conditions that apply to Qantas' business operations contained in Part 3 of the Qantas Sale Act 1992.
"Removing these conditions is the best way to ensure Qantas can secure Australian jobs now and into the future.
"Australians want a strong and competitive Qantas. The existing Qantas Sale Act 1992 places restrictions on Qantas that advantage its competitors.
"Like all other Australian international airlines, Qantas will continue to be subject to the Air Navigation Act 1920 (ANA). The ANA applies to both Virgin Australia and Jetstar.
"The ANA effectively limits total foreign ownership of Australian international airlines to 49 per cent, but does not impose the additional restrictions on business operations that apply to Qantas under the Qantas Sale Act 1992.
"These changes will provide business flexibility for Qantas consistent with other airlines based in Australia.
"Foreign investment will continue to be subject to consideration and approval by the Foreign Investment Review Board.
"This is the best policy response to the difficulties currently being faced by Qantas.
"Legislation will be finalised and introduced as soon as practicable. Any changes to Qantas' operations as a result of these changes are a matter for the Qantas board and management."
Transport Workers Union:
On Thursday February 27, Qantas' Board announced 5000 job cuts, but failed to outline a strategy to restore profitability.
National Secretary Tony Sheldon Sheldon said at a perfunctory meeting on Friday February 28, Qantas also refused to discuss any cost-saving strategies that might ameliorate job losses.
"Regrettably, the Qantas Board is not willing to join its employees in supporting the airline's future," Sheldon said
"The workforce has made clear it wants to discuss cost-saving measures to mitigate job losses, but the company simply isn't interested.
"Taxpayers have a right to insist that Qantas explain how it will protect Australian jobs."
"Political leaders have urged Qantas and its staff to work together to save the airline. The workforce is willing to do so. It's time for management to follow suit."
Sheldon said he agreed with independent commentators who had highlighted Qantas' failed Jetstar Asia strategy as the reason for its precipitous financial decline.
"Since 2009 the Qantas Board has deliberately siphoned funds from Domestic and International services to fund a failed bid for the Asian market through Jetstar Asia," Sheldon said.
"The failure of this strategy is reflected in last week's profit figures, which follow previous Qantas downgrades under this Board's direction."
Sheldon said the Qantas workforce was highly productive, and loyal to the airline where many had worked for decades.
On February 27, Qantas management reported that workforce productivity had increased by more than 22 per cent in recent years.
Despite repeated promises of a pay freeze for executives, executive pay at Qantas has risen by 82 per cent since 2010.
A 2011 Oxford Economics study found each Qantas baggage handler, check-in staff and ramp worker generated a $205,000 return to Qantas above the cost of their employment.
Australian Licensed Aircraft Engineers Association president Paul Cousins:
"'It's 100 per cent [certain] that jobs would be going offshore if it was successful [in passing the Senate]."
Australian and International Pilots Association:
The Australian and International Pilots Association has called on both major federal political parties to accept a compromise deal on the Qantas Sale Act.
"The current political debate over the Qantas Sale Act is unnecessarily absolutist," AIPA President Nathan Safe said.
"The Coalition is arguing for the QSA to be scrapped entirely, while Labor is pushing for it to be retained.
"We believe a compromise position could be reached, which would level the playing field for Qantas, while still retaining the airline's unique Australian identity."
The Qantas Sale Act stipulates that:
- Any single foreign investor is limited to a 25 per cent stake in Qantas
- Foreign airlines can hold no more than 35 per cent of Qantas shares in total
- Total foreign ownership of Qantas is capped at 49 per cent
"Both sides could consider agreeing to removing the 25 per cent limit on a single foreign investor, and the 35 per cent cap on foreign airline ownership - while retaining the cap on total foreign ownership at 49 per cent," Safe said.
"This would free Qantas up to seek foreign investment, while still ensuring it remained majority Australian-owned.
"There is no reason to believe that foreign airline investment is an inferior option for Qantas's future than investment from a local investment bank.
"We believe both the Coalition and Labor have a responsibility to seek a compromise deal that will assist Qantas to survive, instead of locking into an intransigent political battle."
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