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Joyce calls for level playing field

written by Robert Nutbrown | December 10, 2013
Alan Joyce believes that Qantas is not operating within a free and fair market.
Alan Joyce believes that Qantas is not operating within a free and fair market.

Qantas chief executive Alan Joyce has called for the airline to be given “a fair go”.

Writing in The Australian Joyce stated that Qantas is not seeking a government bailout, declaring that “Qantas is not Holden”, and said the challenges the airline faces stem from the absence of free market conditions.

“Virgin Australia’s 2012 restructure has enabled it to circumvent Australian law and pretend to be an Australian airline when it is majority-owned by three foreign government-backed airlines,” Joyce writes. “Through Virgin, they are pouring money into our domestic market to weaken Qantas and ultimately funnel Australian traffic on their airlines and through their hubs.”

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Qantas is in discussions with the federal government seeking a level playing field, Joyce stated.

“We are talking to the Abbott government because legislation and regulatory decisions (the Qantas Sale Act, the Air Navigation Act, and decisions by the Foreign Investment Review Board) have created the uneven playing field we find ourselves playing on. We are seeking a fair go as we continue to transform our business and make the tough decisions.”

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5 Comments

  • des stagg

    says:

    Anyone who is interested in the ‘rise and fall’ of our ‘iconic airline’, should be encouraged to read ‘The Men who Killed QANTAS’- Greed, lies and crashes and how they destroyed the reputation of the worlds safest airline, by Matthew Benns. It is no wonder that CASA introduced CASR 42, requiring RPT Operators to be an approved Continuous Airworthiness Maintenance Organisation.

  • Ante C

    says:

    I feel like I’ve heard this before.

  • Aido

    says:

    A fair go? You have got to be joking Joyce. For the past decade Qantas has done nothing but try and bankrupt Virgin and take advantage of the Australian public. Too bad, too sad.

  • travelhound

    says:

    What’s at Stake?

    I have followed the developments of the QANTAS / Virgin Australia dispute having a particular interest in Virgin Australia circumventing the ANA foreign ownership requirements through the VAIH entity.

    For those who have an interest in legislation and have read the Air Navigation and Qantas Sale Acts, it isn’t hard to understand why Alan Joyce is expressing his concerns about the VAIH structure (in particular) and the broader issues associated with the laws that govern Australian aviation.

    The claim that “Through Virgin, they are pouring money into our domestic market to weaken Qantas and ultimately funnel Australian traffic on their airlines and through their hubs.” are fairly serious. If true, there are serious implications not just for QANTAS, but for the hundreds of other Australian businesses (that employ thousands of people) who are dependent upon their services to the industry being provided in Australia.

    The majority of us at some time have read or heard of the cost advantages of undertaking airline maintenance overseas or employing foreign cabin staff, but probably don’t understand the entire business realities associated with this. In short the majority of tasks associated with running an airline can now be performed overseas in a business environment with high skill levels, substantially lower labour costs and scales of economy that makes these businesses more sustainable over the longer term.

    As such the plight of QANTAS has parallels with many other Australian industries who are also struggling to remain competitive in this environment. With our closest trading neighbours now possessing the skills and expertise to perform complex aviation works and in a lot of instances also representing best practice, the pressures industry face is immense.

    For the people who have an interest in this industry, we are very much at a watershed moment. There are broader questions to the ones Alan Joyce asks. With this new competition, what will the effect on employment in aviation be, can Australia continue to maintain a viable standalone aviation industry or will we simply need to accept a “new” reality of these skilled jobs (and associated employment) being performed overseas?

    With all of the concern that comes with these questions, history tells us this is not a “new” reality. Australian industry has always strived through “innovation” to overcome the disadvantages associated with our isolation (from the rest of the world), relatively low population base and high costs (associated with the successes we all enjoy from having a strong economy).

    What has changed, is business leaders seem to be so overwhelmed or allured by the low cost labour environments in our neighbouring countries and in doing so have lost sight of “innovation” and how it has a long history of being a platform for Australia’s success.

    When airline executives talk about them bringing the cost of air travel down or having lower costs than the opposition, these advantages have been obtained through three key factors. The first is productivity (normally associated with business organisation and work practices). The second is cost of labour (local business conditions) and the third is the utilisation of low costs providers (directly associated with low labour costs in developing nations).

    This new reality means for airlines like QANTAS “innovation” means looking at every part of their business to ensure they remain competitive in an environment where they face “new” realities every year. This includes re-establishing what represents strong work practices, re-structuring of business or simply coming to an understanding for the longer term some jobs will be better performed overseas.

    For Australians employed in the industry it is about understanding work practices and conditions probably can’t be sustained in the current guise, if we want jobs to be maintained in Australia.

    For governments it is about them understanding their responsibilities to the Australian people and that they are the custodians to the laws that underpin Australian industry. As such, government, like QANTAS have to understand the “new” realities of competition and as required amend, repeal or replace industry legislation (ANA / QSA) to ensure these large employers are given every advantage, not disadvantage possible.

    So the question now becomes, What’s at stake?

    The risk with the questions Alan Joyce ask, is that of narrow perspective. If we leave these questions to be answered by the airline executives alone (as seen by many of Richard Branson’s comments) we face the real possibility that many jobs (and assets) in aviation will simply be transferred to lower cost countries. If we simply turn a blind eye to foreign ownership rules and the strategic value of having these businesses Australian owned, we face a new reality that “innovation” could be stifled, not stimulated by overseas boards with other more compelling interests.

    For people employed in this industry you (we) are facing the real possibility your jobs could be gone from the industry for ever.

    As such my appeal is to the people on the frontline in this industry. For the airlines hostess staff, if your husband, wife or partner can’t get a job or your parents face long term unemployment because the industry they worked in no longer meaningfully exists in Australia, where does the value come from.
    If your airline has costs 10% lower than the opposition, but you become the sole bread winner (your wage now has 50% value) because jobs in the industry no longer exist what is the eeconomic value of your job become. If you see your parents having to engage in re-training, so that can be employed in a low paying job where will the satisfaction come from working in this industry.

    “Innovation” as in the past is where our future lies. It is time for us not only as an industry, but as individuals to stand up for the “Spirit of Australia”. Let’s not allow our industry to become foreign owned and our jobs go overseas in a fleeting moment where industry doesn’t play on a level playing field.

  • Peter

    says:

    In a nut shell Alan Joyce and the Board have done nothing to expand the Qantas Airline Business, if anything they`ve gone the other way, all they have done is hand many of their Routes / Destinations to their opposition, and literally pump MILLIONS in to Jetstar.

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