The Guardian 14 March, 2007

Qantas takeover:
Jobs, services, safety at risk

The "deed of undertaking" drawn up by the Howard Government to allow the consortium Airline Partners Australia to take over Qantas will not safeguard the jobs of the airline’s workers or the services the airline currently provides. After making the announcement the government admitted as much, Transport Minister Mark Vaile conceding that maintenance work could be moved offshore.

"If Qantas requires some maintenance to be shifted off-shore, we’re not going to micro-manage this." Prime Minister John Howard cast out a broad and essentially pointless statement saying that "no job could be guaranteed forever". Certainly not his in the coming election.

And if Qantas is on-sold to another buyer the deed would truly become a meaningless piece of paper. The deed states that Qantas headquarters and control must stay in Australia and that two thirds of the board of directors must be Australian; that it must support regional routes and improve its domestic network; that Qantas and Jetstar must operate separately; that assistance to Australians in times of emergency, such as evacuations, must continue.

In an example of the growing political as well as economic power of one member of the consortium, Macquarie Bank, the deed contains a block on Macquarie Bank from voting on the Qantas board on any matter relating to Sydney Airport because the privatised airport is managed by one of the bank’s infrastructure funds. Like the guarantees about jobs and services, this too is merely an empty gesture by the government.

On ABC radio’s The World Today program last week, Janet Whiting, a commercial law specialist, said the agreement had holes in it. "I think the deed of undertaking that’s been entered into has got a number of legal loopholes in it, in that it certainly binds the parties to the deed but if Airline Partners is successful in taking over Qantas, then the company will be privatised.

"If Airline Partners then wants to dispose of their interest in Qantas to a third party — so in other words on-sell — it won’t bind the third party."

It would be no precedent in underhanded corporate tactics in Australia for the consortium itself to set up a shell company and sell the airline to it.

The Australian Manufacturing Workers’ Union (AMWU) condemned the government’s decision and rejected assurances that jobs will be protected under the deed. "The Federal Government has lined up behind big business on this takeover, against the interests of Qantas workers and the Australian public", said AMWU National Secretary Doug Cameron.

"The deed governing the conditions of this takeover gives no certainty on the protection of Australian jobs." The union said it will continue to campaign against the takeover until shareholders decide on whether or not to accept the bid.

"It is quite clear that the major beneficiaries of Howard’s capitulation to big business are the senior executives and the private equity consortium, at the expense of workers. We believe the deed document is full of weasel words that do not give any security to Qantas workers."

Qantas workers hit

In preparing for the takeover, Qantas management has already forced a number of long-standing employees to quit their jobs by making unmanageable changes to their work shifts. The Australian Services Union says the changes are in breach of agreements. Women with family responsibilities have been hit very hard by the changes. They are taking a case to the Human Rights Commission.

By driving these workers out, Qantas opens the way for using the Coalition Government’s anti-union, anti-work WorkChoices legislation to bring in new staff on AWAs at a fraction of the cost. After all Qantas management are out to show any new owners that they are capable of making the "hard decisions" to rake in the even higher profits to service the huge debts involved in any takeover.

Safety fears

The union also noted that the safety record of the airline was a concern as fears of cuts to maintenance in Australia and the possibility of maintenance being moved overseas remain.

Qantas currently utilises three heavy maintenance facilities in Australia, at Tullamarine and Avalon in Victoria and in Brisbane. The heavy maintenance site in Sydney, the biggest in Australia, was partially closed in November 2004 and then closed down completely in May 2006 with the loss of 256 Licensed Aircraft Engineer positions and several hundred additional support staff.

Members of the Australian Licensed Aircraft Engineers’ Association (ALAEA) recently visited the two current facilities in Asia maintaining Qantas and Jetstar aircraft. At the Manila facility they found that at any one time there were only two licensed engineers working alongside 44 unlicensed engineers. The two licensed engineers were required to check and certify their own work and that of 21 others at the same time.

The Singapore site has up to 60 engineers working at any one time of which only five are licensed. The facilities in Australia have close to 70 percent licensed engineers and 30 percent unlicensed.

The ALAEA considers both the Singapore and Manila sites are operating at unsafe levels of licensed engineers.

Back to index page