Issue #1630      March 12, 2014

Qantas – the high cost of privatisation

Bob Briton

The repealing of the Qantas Sale Act has sailed through the House of Reps but few are predicting the Senate to endorse the decision either before or after July 1. Many of the new Senators are expected to vote with Labor and the Greens to scuttle the move to let Qantas out of pretty well all of its obligations to the Australian travelling public. Qantas says it doesn’t matter what the federal parliament decides. It’s pressing ahead with plans to cut $2 billion off its expenditures over the next three years with a range of drastic measures including the axing of 5,000 full time jobs. One in six Qantas and one in 10 Jetstar staff are expected to be given their marching orders. Some have already received the letters.

Unions are furious that the details of the sackings and redundancies aren’t available leading many to conclude the figure of 5,000 was plucked from the air. Qantas pilot and president of the Australian and International Pilots Association, Nathan Safe, suspects the number was announced in order to impress the share market where Qantas’ fortunes have been flagging. ACTU secretary Dave Oliver held talks with Qantas management last week but was frustrated on the issue of which of the 1,500 management, 300 maintenance and unspecified numbers of catering and fleet operations jobs are to go.

Mr Oliver said that there would be war if the company used the crisis caused by mismanagement to reopen enterprise bargaining negotiations and press for pay cuts. Tony Sheldon, national secretary of the Transport Workers Union, says Qantas chief Alan Joyce told him that wage concessions from workers would make “not one iota of difference” to the company’s intention to wield the axe. That won’t stop Qantas trying to raid workers’ pay packets if they get the chance, however.

Interestingly, Qantas is proposing to expand domestic capacity in the second half of this year and is still committed to effectively add two aircraft to its fleet for every one put on by Virgin. The airline has denied bogus claims from federal Treasurer Joe Hockey that the carbon tax added significantly to the company’s woes. Qantas insists high fuel costs, the decision to buy the giant A380s instead of the more fuel efficient Boeing 777 and stiff competition from Virgin and its backer, government-owned Etihad, has led to the current crisis. So while workers were not to blame for the difficulties, they will pay the price. That’s capitalism.

The business pages are full of encouragement to Qantas management to go in hard. Matt O’Sullivan of The Sydney Morning Herald authored a piece last week with the headline “Shifting work overseas biggest benefit to airline”. It appeared to celebrate the fact that “This month Qantas will complete the closure of an engineering base at Avalon Airport in Victoria, leaving its Brisbane base as its sole heavy maintenance base in Australia.”

Former Qantas executive and Rudd political advisor, David Epstein, has praised the Abbott government’s last minute decision not the provide a $3 billion unsecured loan to Qantas as requested. That would have led us “down the Argentine road” of failed government intervention, he said. And like virtually all the writers in the business pages, he wants the Qantas Sale Act to go so as to deliver the airline a “level playing field”.

That legislation and the determination of workers is all that stands in the way of much worse social consequences from Qantas’ difficulties. Pressure is building on Labor to flip-flop. Its “no” vote in the House of Reps drew the following, tormenting comment from the PM:
“The once great Labor Party, which had the strength and the courage to sell Qantas back in the early 90s has gone backwards.”

Lets hope he’s right and that they keep moving backwards. After all, “backwards” for Abbott means protecting the people’s assets and interests against the capitalist predators who give the PM his orders.

Next article – Editorial – Cuts are cuts are cuts

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