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Qantas Tasmania changes spark outcry

written by australianaviation.com.au | January 15, 2014
QantasLink 717s will soon be serving Hobart. (Rob Finlayson)
QantasLink 717s will soon be serving Hobart. (Rob Finlayson)

Qantas’s move to shift flights to Hobart from Qantas mainline 737s to QantasLink operated 717s, with the attendant decision to cut 35 jobs at Hobart airport, has sparked an outcry, even as the move means increased flight frequencies and dropping Q400 turboprop services to the Tasmanian capital.

From April Qantas will transition its Melbourne and Sydney to Hobart jet services from mainline 737s to QantasLink 717s, which are operated on Qantas’s behalf under a contract arrangement by Cobham Aviation. As a consequence Cobham will be establishing a pilot and flight attendant base in Tasmania, but 35 Qantas mainline ground staff positions will be lost, with ground handling instead to be provided by contract staff.

“This change is about making sure we have the right aircraft on the right routes in support of leisure and business travel opportunities between Tasmania and the mainland,” a Qantas spokespersman said on Tuesday. “This decision forms part of the Qantas Group’s strategy of transforming its business to remain a competitive force in Australian aviation and continue to offer the best services it can to customers.”

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Qantas says the affected staff will be offered redundancy packages “and redeployment opportunities where possible”, and that its overall direct indirect employment in Tasmania will increase

But the decision has sparked a heated backlash from politicians and unions, with Hobart independent MP Andrew Wilkie telling The Australian: “It does call into question their status as the national carrier – how on earth can you have the national flag carrier not servicing one of the capital cities? The fact that they are having to take such drastic steps highlights the grave difficulty the airline is in. But at the same time it makes it harder to make the case for federal assistance when you’re not behaving like a national carrier.”

And the federal Greens have labelled the move as politically motivated.

“This announcement by Qantas is the latest in a series of decisions made by management designed to put political pressure on the federal government,” Greens transport spokesperson Senator Lee Rhiannon said in a statement.

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“It follows from the announcement last year that Qantas would sack 1,000 employees. Qantas management are treating their workers with contempt by using them as part of political machinations to lobby the federal government into weakening foreign ownership regulations.”

The 717 business class.
The 717 business class.

Qantas has acquired five 717s to be operated by QantasLink on flights from Canberra to Sydney, Melbourne and Brisbane, and from Sydney and Melbourne to Hobart. Unlike the one-class 717s QantasLink operates in WA and Queensland, these aircraft are being refurbished with a two-class cabin and feature iPad inflight entertainment to every seat.

Cobham and its predecessor National Jet has operated QantasLink (and before that Airlink) jet services for Qantas (and originally Australian Airlines) using first BAe 146s and more recently the 717s since the late 1980s.

Meanwhile, Australian Business Traveller reports that Virgin Australia’s new airport lounges for Hobart and Darwin have been delayed and are not likely to open until 2015. The Hobart lounge was originally due to open in 2013.

 

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16 Comments

  • Robert McMaster

    says:

    As a grandson of one of the founders of QANTAS, I am saddened by the current position this great company finds itself in. I am not a shareholder and have no direct involvement in the company, however, it disturbs me to see them constantly being attacked for every decision made by the executive. The people of Australia lost the right to control this company when we allowed the government of the day to reap the dollar value for the sale of this asset, to fill a black hole in our balance national balance sheet, and yet generally we still want to treat it and its employees like part of the public service.
    I don’t always agree with the decisions of the management but they are fighting with one hand securely tied behind their back with compliance to the discriminatory QANTAS Act limiting their foreign investment. I am sure that the Board of QANTAS would dearly love to have the ability to ask a foreign, government owned airline to top up their balance sheet, and continue to run at a loss, as seems to occur with Virgin Australia. If the comment above by Mr Wilke is correct then shame upon him. QANTAS is not our national carrier, it is a publicly owned business, registered in Australia, that proudly carries out national flag, promoting this great country wherever they fly. Senator Rhiannon claims it is a politically motivated statement designed to put pressure on the government. Read the history of the company Senator. This company was formed and prospered because my grandfather, and others after him applied pressure on the government of the day, no matter what party and both sides of the house.

    This is a publicly listed company, charged with the responsibility of offering a fair return on investment to its shareholders and, rightly or wrongly, the executives are making decisions. If Mr Wilke and Senator Rhiannon aren’t happy with those decisions, how about they put their hands into their pockets, buy a significant shareholding and vote at the appropriate meeting, instead of criticizing from the sideline! I don’t believe it would be right for the government to buy back into the company, but they need to release the shackles and let QANTAS fly, and return to being the great, profitable company it once was.

  • Arno Kruger

    says:

    Every time Qantas makes a decision to improve its business it gets a kick for it, so well said Robert.

  • Errol C

    says:

    Great to read a well reasoned, objective and unemotional assessment of Qantas’ operational decisions.
    More power to you Robert.

  • Marcel

    says:

    …agree, especially when the taxpayer is paying for the politicians airfares.

  • Russell M

    says:

    Well said Robert, well said.

    An interesting aspect of the Hobart situation is people’s rather short term memories. Without looking it up for sure, it wasn’t “that” long ago that Qantas eased National Jet into Hobart and I think Launceston with the Bae146, YAD and one other? At the time (sometime in 1990’s) I lived and worked in Canberra, and we had the same 146 running MEL/CBR at certain times of the day. At the time also the 146 (which I absolutely loved in J class) ran up to BNE then I think Mackay and/or Proserpine. With all new announcement, we now have the QF contractor taking up…..CBR/BNE and MEL/HOB. Nothing changes over time really.

    I also recall the CBR/SYD flights alternating from jet only to “more frequent” turbo props – no need with Virgin to “Dash” across the Tarmac as they said at the time in their adverts for all (jungle) jet services. Now its back to more frequent turbo props again.

    Same as the massive fanfare when QF re-started flight into the Gold Coast (OOL), and how many more times will they “introduce” flights to India.

    Its a funny cycle, but history does, as they say, have a habit of repeating.

  • Brendan

    says:

    As a Qantas staff member and shareholder I have watched over the years Qantas management start up Jetstar franchises, transferring the costs associated with these franchises to Qantas international. Then claiming that Qantas international is struggling and needs to be restructured. So far the jetstar franchises haven’t made a profit ( jetstar Asia, Jetstar pacific, Jetstar Japan, jetstar Hong Kong.) so in other words, Qantas international hasn’t reached its turning point to recovery.
    So over that time Qantas management dropped the ball with regards to “Qantas mainline” slow fleet renewal, lounges etc, which allowed Virgin to sneek up on Joyce and the board.
    So it seems funny that Joyce cries fowl that virgins major financial backers are pumping money into virgin, ” then retreats into his hole when people ask questions where Qantas money has gone” when Joyce has been doing this for years with jetstar.

  • PeterL

    says:

    Well said Robert, good to hear a balanced well written comment.

    Brendan where is your proof that Qantas has transferred these Jetstar costs to Qantas International? We keep hearing this but where is the proof? No one has ever been able to substantiate these claims and as a publicly listed company I would have thought it would be simple to get the records? I am not an expert on these things but the proof should not be hard to find if it was true!

  • Peter

    says:

    Yes very true Brendan, you are right on the money with your comments and it is a well known fact within the industry that Qantas are pumping money into Jetstar, it also seems that Alan Joyce and the Board are purposely dragging the company down.

  • Brendan

    says:

    PeterL
    Back in 2011, Joyce admitted to a senate inquirie, that the accounting practice and “figures” stated on the financial report are not the accounting practice “& figures” used in the day to day running if the Qantas Group. General Bussiness Practice.

  • NeilP

    says:

    Well known and fact don’t necessarily go together, Peter. The rumours suggesting as such have been circulating for a number of years but, as a publicly listed company, any movements of money between entities (QANTAS and Jetstar) should be available in the Annual Report as well as through regular reporting to the ASX. During the initial set up and operation of Jetstar, it was reported to the stockmarket that QANTAS was providing finanial support for its subsidiary. It was also reported when the company first started making a profit. All readily available information reported to the ASX.

    Very thought provoking and passionate response Robert. Over the years I have travelled with QANTAS many, many times and have always had good experiences with cabin crew, ground staff, flight crew (when it used to be allowed) and admin. In fact, the only time my bag has ever gone astray the staff at BNE went out of there way to help. When ever there are reports of the sky falling, it always seems to be the same people making the claims using the same arguements and the same threats. Right now, the threat is very real. If QANTAS dont do something soon, the company is going to enter a spiral and it wont be able to survive. Those who think they deserve their job and are untouchable may very well find themselves replicating Ansett staff if they dont lose the attitude and work for the good of the company.

  • Brendan

    says:

    Everybody seams to have an opinion on the matter, I ask. Where is Allan Joyce? He has not been seen since people started asking to look at the books to clarify what is really going on. Air New Zealand was transferring its cost onto Ansett when Ansett collapsed. And if anyone can prove me wrong, please do “with evidence” until them Joyce is moving costs around the Qantas Group as standard Bussiness practice.
    And the ASX doesn’t need to see the books, just needs to get a statement from the company.

  • James from Sydney

    says:

    I find it intriguing how we seem to be focusing so much on what Qantas is doing and seemingly ignore the financial situation VA is in. They have spent an awful amount of money fighting Qantas, with some of those funds coming from the sale of assets include aircraft. At some point the price war has to stop and VA has to perform and make a return on the significant amount of investment it’s owners have made. They have to do this with a reduced asset base and borrowed money. What will happen if and when VA struggles to do this? I hope we are not deluding ourselves with the notion that the foreign airlines that own VA will act in the interest of VAs Australian workforce, and indeed the company itself, when the going gets tough. Foreign airlines invest in domestic carriers for one reason only, they want to feed their network and will not tolerate poorly performing businesses. Whilst Ansett management and unions played a big part in it’s failure, it’s demise clearly highlighted what happens when foreign airlines, who own Australian domestic carriers, will do when the strategy fails.

  • Air Observer

    says:

    As the CEO, Allan Joyce deserves criticism if he and the board make bad decisions. They have handled the airline poorly on numerous occasions and should face the music. I don’t believe I should buy shares to have my say in how the airline should operate. I opposed the sale of Qantas but like many Australians that say meant nothing. Instead we were given the usual promises that our asset would be handled properly which I never believed would be the case. If a ground handler or pilot made as many mistakes as Joyce they would never work in the industry again. If you want the ridiculous paycheck then earn it or shut up and walk. 

  • john

    says:

    It is well known within Qantas that Jetstar is assisted by the mother company,as is Qantas Link,……………..but Qantas will never admit it!

  • Grant McHerron

    says:

    It’s pretty easy for “headquarters staff” (eg: lawyers, accountants, IT, etc) to bill their timesheets to QF International instead of JQ when doing JQ work. This is an easy way to prop-up JQ at the cost to QF International.

    Not saying this is what happened, but you know, if all the stories we’re hearing are true, this would be the easiest way of doing it without showing up in forensic accounting analysis…

    As to politicians putting their money in to get a share holding. Isn’t that what Joyce is asking for? For the government to put “public money” in to prop them up? If so, I’d want to be bloody sure that we weren’t using that money to cover up the mistakes Joyce et al have made with Jetstar International.

    Maybe if QF are to have a “level playing field” we need to separate QF domestic entirely from QF International, then it too could be 100% funded by foreign entities (assuming the QF Sale Act is dumped) just like Virgin is. Of course, Jetstar would be out on its own, as would QF International. QF International could then get government assistance while Domestic gets Emirates & others to buy into it as Etihad, AirNZ & SIA have for VA.

    Food for thought 🙂

  • bob

    says:

    Just another reason joyce should go !!!!!!

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