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Qantas calls for “immediate action”

written by australianaviation.com.au | March 5, 2014

Qantas has called for "immediate action". (Rob Finlayson)
Qantas has called for “immediate action”. (Rob Finlayson)

Qantas has issued a strident call for “action” after the federal government announced on Monday night it would not offer the airline a debt guarantee, and instead would move to make changes to the Qantas Sale Act.

“We have consistently said that removal of foreign ownership provisions that apply uniquely to Qantas is an important longer term objective to create a fair and free aviation market in Australia. However, it is clear that such a move would have limited chance of passing through the Senate,” Qantas said in a statement released on Monday night.

“We need immediate action to address the imbalance that has been allowed to persist for almost two years – namely Virgin’s unlimited ability to access foreign capital from government-owned airlines to fund a loss-making strategy against Qantas.”

Continues the statement: “If this proposal to change the Qantas Sale Act is not passed, we would expect the Government and the Parliament to consider alternative measures to balance the unlevel playing field in Australian aviation.”

The statement does not specify what those “alternative measures” would look like, but the Australian Financial Review reported on Wednesday that Qantas had asked for a guarantee for all its debt, or a $3 billion unsecured loan facility.


According to the Financial Review the government rejected that request, and instead decided to push ahead with changes to the Qantas Sale Act, after receiving advice from Treasury, the Department of Infrastructure and accounting company PwC.

“You would never in a fit lend anyone $3 billion on an unsecured basis without doing due diligence on that person,” Prime Minister Tony Abbott later told radio station 2GB on Wednesday.

“The conclusion that we came to based on their advice was that Qantas does not need an unsecured facility from the government.”

Any action government action over Qantas remains gridlocked with the Labor Opposition, the Greens and the Palmer United Party saying they would block changes to the Qantas Sale Act in the Senate. Instead, according to reports, Labor, the Greens and independent Senator Nick Xenophon are in discussions over a possible Senate inquiry into Qantas.

CORRECTION – The Qantas statement was issued Monday night, and not Wednesday as an earlier version of this story reported. Apologies.

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Comments (14)

  • ian


    yes immediate action-get out of the media spotlight, it’s costing you big time as people think yu are dead & then won’t book Qantas.

    Doesn’t matter if they pay with credit card & get their money back, that doesn’t get them from A to B.

  • Chris Grealy


    It seems that Qantas management can’t make up their minds what they want. Their story changes from day to day. Could it be that, like the Abbott government, they have no idea what to do?

    The running around like chooks with their heads cut off act is wearing a bit thin. Thank god I don’t have shares in this lot.

  • bob


    Look I can fix the problem GET RID of alan and friends! Problem solved! !!!!

  • Paul


    I agree Bob, It is fairly obvious that AJ and the entire Qantas Board are out of there depth or in someway working in their own interest for some type of gain.
    Any changes or assistance from the Government should be conditional on the CEO stepping down along with the board.
    Also an in depth inquiry into the Management of the company over recent years.

  • Mark


    Immediate problem – sack Alan Joyce. Fixed

  • Glen


    I agree with Bob and Chris this company needs a complete change of board and they need to leave there egos at the front desk and think of what is best for the company. Saying that I think it might be too late.

  • random


    Still beggars belief that QF Intl are struggling to lower their cost base whilst operating legacy classic aircraft yet Jetstar gets first crack at the B787? And as several other comments have suggested, rather than just killing routes off why not re-equip them. Is it time that the B777 got a look in finally – or does that gaff still potentially embarass encumbent management? I know Joyce really wants to take a sledge hammer to staffing costs – he obviously feels that this is the crux of reform so is desperately trying to paint the situation badly to force the issue. Whilst this may in part be true, unfortunately the economista are busy slashing and no-one seems to realise that brand management & image management are just as if not important. The brand is copping a caning right now which is awful for the bottom line irrespective of structural reforms. Without the image & brand all the savings & restructure are irrelevant. Returning to aircraft – reforms to gain efficiencies that reduce fuel burn must be part of any cost strategy yet re-equipping QF INTL seems strangely absent despite B787 being available in the company. On a separate note it surprises me that collectively on a global or at least alliance scale the airlines seem powerless to drive aviation fuel costs down significantly – they appear to be utterly powerless – presumably OPEC believes they have a captive market that is basically beholden to them. QF amongst others complain bitterly about staff costs yet their proportion of costs hasn’t markedly risen. Fuel and other factors have sky-rocketed in the same period as a proportion of costs.

  • Overload


    Why Qantas share holders put up with this nonsense is beyond me. A large part of Virgin’s capacity is to new routes and services. The Qantas capacity is merely a two for one policy governed by the idea that 65% market share must be maintained at all cost. Well guess what Alan, it is costing you!

    So your the dominant player and currently the playing field is not level, Virgin even agree with you on this one, and are happy to see the antiquated sales act removed. Hence the playing field would now be even, but no, your not happy with that. As the largest player by far, you need more than level, you want back to uneven but in your favour and this time, and you want the tax payer to be complicit.

    Dont fall for it Australia, Qantas can be great again. If Qantas goes on the government drip it will die a slow death and take our taxes along with it. Yes, you have some big descition to make AJ, but the problem I have, is I see no light in you, you look and sound beaten and so does your board. Use your own money and feel the pain, it will guide you to making better decisions in the long run. And for god sake get a board that stops high fiving you and tells you how it is!

  • PeterL


    Alan Joyce is dealing with the legacy of the old management regime, the A380 and no 777s. I am going to point out the obvious as it seems very few are seeing it! Qantas has large institutional investors who would have got rid of Alan Joyce ages ago if they thought he was not doing a good job!!!

    These institutional investors have been backing Joyce for a few years now while he takes a dinosaur of an airline and transforms it into a modern airline that can compete on the world stage. Qantas could go down the AirNZ route and go broke, then reform with competitive worker agreements etc to reduce the cost base.

    Alan Joyce is trying to avoid the AirNZ route to restructure but it needs to be given time as it will not happen overnight, and remember the institutional investors are backing Joyce in this strategy. These institutional investors know way more about this than we do and they are backing this up by putting their money where their mouth is so to speak, are you?

    Just to show what Qantas is up against, Virgin sends its E190s to Portugal for heavy maintenance, that is how bad the costs are here in Australia. Why shouldn’t Qantas be able to do the same if it makes them competitive?

    The Qantas sale act is crippling them and it needs to go now!

  • James from Sydney


    PeterL we will never learn. Unions killed Ansett (helped by bad decisions by Ansett board admittedly) and they will kill Qantas. They seem to think you can force an organisation to employee people uneconomically and somehow survive. It seems now its up to Labor to make the right decision but union puppet political parties will not do it. Never. We will never learn.

    I’m sure you have all read about it many times over. In 2004 Virgin Blue flew the same number of passengers as Ansett did in it’s last year with a third of the staff and on average each staff member was paid less than Ansett staff. CEOs do not make these decisions. CEOs will reduce staff and wages if they could to remain competative. Unions must take responsibility for forcing an airline to an unsustainable level of staff. So much for saving jobs. 30,000 people lost their jobs.

  • James in Sydney


    Sorry my mistake. It wasn’t that bad. Only 16,000 people lost their jobs.

  • random


    PeterL – you are quite correct that Joyce is backed by the institutional investors but that does not necessarily mean they have got this all right.

    Failure to deploy lower fuel burn aircraft into the international fleet defies almost all logic – why would the institutional investors back management decisions like this?

    Furthermore, why would you allow a brand image to take such a hammering in the eyes of the very public that they need to carry? This is like trust between partners – fragile at times, naively easy to lose & tragically difficult to regain if you’ve managed to blot your copybook.

    One thing economists prove frequently is that whilst they can perform acts of economic wizardry they often forget that image & esprit de corps are impossibly connected to economics, and you ignore them at your peril – unless of course you just don’t care provided you escape with your shirt.

  • Stuart Lawrence


    Qantas management should look at what happened to Air New Zealand and wow look at what is hapeneing to air new Zealand it is going from strengh to strengh

  • John


    That old chestnut re Virgin flying same number of passengers as Ansett with a third of the staff is misleading at best!
    The vast majority of Ansetts staff at the time were employed by Ansett!
    In contrast Virgin employed, and still does a large number of contract staff.

    So the only meaningful comparison, would be the total number of Virgin workers,
    Virgin staff and contractors, vs the Ansett numbers!

    Staff actually employed today by Virgin and Jetstar are not paid much less tan their Qantas equivalents, the difference is they are more productive and efficient than Qantas!
    Eg Virgin and Jetstar have line maintenance on demand, so they man their ports with at least half the engineering manpower of Qantas!
    Qantas and Jetstar engineers pay is not much different, the saving is in the way the manpower is utilised!

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