Australia’s aviation unions this week head into a crucial meeting with the leadership of Qantas, opposed to lifting foreign ownership controls on the national carrier, but willing to discuss changes that would secure the future of the airline.
A scheduled meeting on Wednesday between union leaders and Qantas chief executive Alan Joyce and his executive group has taken on a new urgency following the airline’s announcement that it would cut 1000 jobs over the coming year.
ACTU secretary Dave Oliver said Qantas had important obligations to Australia as the national carrier and unions wanted to ensure the obligations to 30,000 strong Australian workforce and the broader community were maintained.
“If there is a case for a different approach to the way Qantas meets these obligations or the way the government ensures Qantas is on a level playing field with other airlines, we will listen to that case, but we do not support Tony Abbott’s comments that reducing Qantas’ commitment to Australia by starting a race to the bottom on deregulation is the solution.”
“We have set up regular meetings with management and it just so happens that it’s this week. We will take the opportunity to get further details about what their plans for the airline are.”
The meeting comes as the Prime Minister has flagged that support from Qantas to ease the Qantas Sale Act was not “unreasonable”. The act limits foreign ownership in the airline to 49 per cent and Qantas has complained that it competes against carriers internationally that have national backing, while its domestic rival Virgin has Singapore airlines and Air New Zealand as shareholders.
Unions would oppose lifting the foreign ownership limits on Qantas, but would be more supportive of the government providing a standby debt facility with government guarantee which has also been suggested.
A Qantas spokesman said on Monday the airline meet with a number of unions this week to “outline the ongoing tough operating conditions and the challenges faced as a result of Qantas not being on a level playing field with its domestic competitor”.
“We will also be discussing the implementation of a $2 billion cost reduction program over the next three years including a reduction of at least 1000 of our 33,000 employees this year,” the spokesman said.
“We’re in ongoing dialogue with the government about how the playing field could be levelled, but we’re not in a position to comment on those discussions other than to say we’re certainly not looking for a handout from taxpayers.”
Unions have a strong presence in Qantas, partly due to its former government ownership. But relations with management have been rocky due to the pressure to cut costs over many years and the decision to ground the entire fleet in 2011, in order to break bargaining deadlocks with three aviation unions representing pilots, licenced engineers and members of the Transport Workers Union.
The Australian Services Union, which claims to have the biggest membership within Qantas, said there was always a “political swirl” when changes were proposed by the airline, but it would take the arguments seriously and discuss them with their membership. “One thing keeping jobs on shore and not sending them offshore is the Qantas Sale Act because the head office has got to be here, along with other management commitments, in Australia,” said ASU assistant national secretary Linda White. “That’s where our members are, so it’s very important to to us.”
The Australian Manufacturing Workers Union has similar views on foreign ownership and is against any plan for Qantas employees to trade accrued entitlements, such as long service leave, to buy shares in the airline as part of any capital injection by private equity funds. “The entitlements of employees are there for a specific purpose, not as a means of securing equity in the company,” said AMWU assistant national Glenn Thompson. “We think the government needs to take a position that gives certainly to Qantas as our national carrier.”
The opposition to private equity deals reflects strong union opposition to the failed bid in 2006 by the Airline Partners Australia consortium that offered more than $5 per Qantas share. The offer was endorsed by the Qantas board but failed to gain the required level of shareholder support. Australian aviation unions also cite the their US counterparts who took a direct stake in United Airlines in 1994 in return for pay cuts and concessions, only to lose their investment when United eventually filed for bankruptcy.