Australia's #1 industrial directory for equipment & suppliers

Qantas fallout: a round-up of industry opinion

05 March, 2014

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."

View comments (11)

Have your say...

We welcome thoughtful comments from readers
Reload characters
Type the characters you see in this box. This helps us prevent automated programs from sending spam.
dave d | Wednesday, March 5, 2014, 10:39 AM
"Taxpayers have a right to insist that Qantas explain how it will protect Australian jobs." Did sheldon ask this same question of GMH, Toyota, Alcoa,Ford? I think not -why ? because he already knows the answer and the reasons for their demise and that he's one of the principal ringleaders !!
Monica Lopez | Wednesday, March 5, 2014, 11:12 AM
Hi Qantas is Australia emblematic and top airline company , I habe been always proud, safe and well attended when travel at Qantas. Last time we went to buy tickets at Flight centre ( I believe Aussie compaby) we have been pushed and advised to buy other airlines tickets no Qantas . Now we are dissapointed because we know my husband will fly to Europe in a small plane with terrible food , 0 assistance because low cost. Is flight Centre strategically trying to ruin Qantas ? When you try to buy any domestic tickets they always put Qantas last making difficult for Qantas customer use their preferable airlines. Next time i will buy directly to Qantas and that will be my 5 years future airlines tickets , Aussies we need to compromise and do not let Mr Abbot or whoever sell one of our best resource to foreign companies...It is just pathetic
The Ninja | Wednesday, March 5, 2014, 11:13 AM
Get rid of Joyce and Clifford (there must be a third stooge on that board) and replace them with people who have some idea. Good point, dave d, the unions are "fighting" for terms, "fighting" for conditions and "fighting" for their members and their families to lose their livelihoods. You don't benefit the employee by unreasonably hammering the employer. Something has to give, especially if the employer has other alternatives.
Walter Borell | Wednesday, March 5, 2014, 11:15 AM
I believe labor should simply shut up, they sold Qantas and put some stupid restrictions in place. The government should support Qantas since this airline advertises and is promoting Australia worldwide every day all over the globe. Qantas is Australia for people in Australia and overseas while Vergin who is complaining is not really linked to this country at all but to Richard Branson which doesn't do anything for this country. We should be paying Australia for advertising year after year, I can't put a figure on it for the advertising, but I assume it would have to be a seven figure sum, if this would come with some conditions from the government so be it. There is no thing like a free lunch but this is exactly what Australia has had for decades from Qantas. Cut the crap and support them. We just had a conversation about baggage handler's earnings yesterday and I have been told that they earn well over hundred grand a year, if this is correct I would suggest have a look at other wages as well, this is not funny. Baggage handlers are labourers, nothing else and certainly should not earn this kind of money.
dave d | Wednesday, March 5, 2014, 11:50 AM
Walter, I agree that Qantas as a National & International "entity" is the face of Australia O'seas and should be retained.Supported ? I'm not so sure about that,after all it is a private enterprise with shareholders all over the world expecting a return for their investment. The only way that can really be achieved is making the business efficient -not subsidised- and we can see the reaction from everyone when Qantas try to "streamline" the business. Unfortunately your comments are recurring - I'm old enough to remember the stranglehold that Victorian wharfies had on the ports fourty/fifty years ago, demanding outrageous wages compared to the very little efforts most of them put in and holding the country to ransom.Not much has changed since those days just another industry (airline)grown big enough for them to rise once again to strangle until their hold is curtailed Unfortunately too many industries will go under until that occurs -we have learnt nothing in Fourty/Fifty years !!
Robert B | Wednesday, March 5, 2014, 4:41 PM
If you want to know whats wrong at Qantas, compare the baggage handling practices with a Qantas 737 and a Jetstar A320. I watched 8 baggage handlers work a 737, and only 2 a Jetstar A320 at Melbourne the other day. And the A320 was turned around a lot quicker as well. Qantas is suffering from old unionised work practices and probably the wrong aircraft for the job, particularly now as they have to continually compete in a low cost market, ironically much of it their own making. And how much money did they waste just to change their uniforms last year?? Somethings got to give at Qantas!!
ceirano | Thursday, March 6, 2014, 1:49 PM
Perhaps Ninja could suggest someone. It certainly wouldn't be a Union Official as most of them couldn't operate a corner store. They do not seem to realize that eventually, as more & more jobs leave our shores because of costs, living standards will diminish to a point where the industry must be sustainable in competition with overseas imports. Seats on planes is one of them. At that point the pain will really set in.
Rony | Thursday, March 6, 2014, 2:59 PM
As pointed out Qantas has indirectly promoted Australia for many years, our flag fly's all over the world generating millions of dollars in tourism alone. Not supporting Qantas is the same as selling off the Opera House and shipping it overseas. I rather have a few of my tax bucks going to Qantas and seeing them commit to a future plan to ensure it remains profitable and keeping jobs in Australia. Alan Joyce its time to go, like anyone in any job there is a point in time when you need to move on, after things blow over which they will; it will be your time to walk.
dave d | Sunday, March 9, 2014, 3:28 PM
Rony I agree with the way you feel about Qantas being an icon etc. however the reality of it is the opera house harbor bridge etc. draw people to Sydney and it pays for itself tenfold. Qantas on the other hand are not a drawcard or a money spinner - O'seas people in fact are scared away from Australia because of "in country" cost of flying around here. I manage to cruise a fair bit now in my later years and it is the most common topic that comes up at the meal table. I tell them there are regional airlines etc. that may be cheaper however Qantas is seen as expensive O'seas.
Chris Joret | Monday, March 31, 2014, 1:08 PM
The greater the percentage of foreign ownership or / and super fund involvement the greater the pressure to perform economically. This would inevitably translate to a reduction in the number of employees, which by default would lead to a decline in customer service and maintenance in the medium term. Chris J
Martin moran | Monday, March 31, 2014, 1:25 PM
Has anybody thought about the competition to Qantas that flies into Australia. Singapore airlines fly into many airports but Qantas only flies into one airport and that is changi. The same applies to emeritus and etihad. How many ,ore airlines do the same. Australia should provide the same conditions to foreign airlines that Qantas must compete under. Apologies for the spelling but big fingers and small keyboards.