News National Qantas job cuts trigger political furore

Qantas job cuts trigger political furore

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· Qantas management ‘great’ despite $300m loss
· Qantas to shed 1000 jobs, post massive loss

The massive half-year losses and job cuts announced by Qantas on Thursday had everyone talking about the Ailing Kangaroo.

Qantas CEO Alan Joyce revealed plans to cut 1000 jobs to help save $2 billion over three years, just a month after flagging 300 jobs would go from its heavy maintenance facility at Avalon, near Melbourne. He also said the company would book a $300 million loss in the six months to December 31. 

In delivering the news, Mr Joyce said the company was facing the worst conditions in its history and the Australian international market was “the toughest anywhere in the world”. He did find one positive, however – the “great job” done by management.

“The Qantas board and management are operating in tough environments and I believe are continuing to do a good job in tough circumstances,” he said.

Despite the strong performance by the company’s leaders, the CEO and the board will take a pay cut and impose a pay freeze for all other executives.

View from Canberra

On the question of performance, various federal senators were clear on what Qantas management should do – resign.

“The only way for Qantas to get out of this nosedive is for Alan Joyce and the board to resign,” Senator Nick Xenophon told reporters. “What we’ve seen is an airline that has lurched from crisis to crisis, failed strategy one after another.”

But Mr Joyce said Qantas wasn’t operating on a level playing field because its main domestic competitor Virgin was funded by three state-owned enterprises.

“That’s created this unbalanced … playing field,” Mr Joyce said. He said the airline was talking to the federal government about getting support, but refused to be drawn on what specific options were in play.

The Greens offered tentative support for government intervention, saying there was a case for support but only if taxpayers benefitted.

Labor wanted the airline to remain majority Australian owned – for reasons including national security – while the unions thought the government should give it a financial guarantee in exchange for a jobs guarantee.

But Prime Minister Tony Abbott and Transport Minister Warren Truss were more circumspect, opting to wait to see what Qantas formally put to the government.

Mr Truss talked down the prospect of direct government support. He argued that getting the domestic business environment right – by ditching the carbon tax and cutting red tape – was the best thing the coalition could do for Qantas.

View from the cockpit

The people who fly the planes also joined the chorus. The Australian and International Pilots Association said it was “urgently seeking clarity from Qantas management regarding the detail of the announced cuts”.

It agreed Qantas was competing on an unlevel playing field and urged the federal government to “ensure Qantas is not unfairly disadvantaged against foreign government-backed competitors”.

“The benefits that a national carrier delivers for local jobs, local skills, and the local economy are vital to the national interest,” AIPA said in a statement.

Virgin’s chief executive John Borghetti also had a view on the playing field – it should stay as it is now, level or not.

“Any measures that the government plans to take to support Qantas should be offered to Virgin Australia,” he said.

View of the owners

But while opinions on Qantas were easy to find, perhaps the most damning one was put silently by its owners, who couldn’t sell the company’s shares fast enough.

The share price fell from above $1.20 to below $1 after the news broke, before recovering to close at $1.07, a loss of 11.2 per cent for the day. When Joyce won the top job in 2008 the shares were trading above $2.20 and topped $3 less than a year later.

— With AAP

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