Despite pressure to take action to help Qantas, as it sheds 1000 jobs, the federal government says the best thing it can do is improve the economy.
The federal government has talked down the prospects of coming to the direct aid of Qantas, after the airline announced the axing of 1000 jobs and flagged further cost cuts.
Qantas chief Alan Joyce has forecast a six-month loss of up to $300 million which he blamed on the strong Australian dollar, high fuel costs and Virgin Australia “distorting” the market.
Mr Joyce, who is facing calls from Labor and crossbench MPs for his sacking, said the company had done its best to cut costs and improve productivity.
His $3 million pay will be cut by at least 38 per cent this financial year, but he says he continues to have the backing of the board. “Government action will be key in enabling us to keep competing effectively on a level-playing field,” he said on Thursday.
The Qantas chief is talking with the government about additional policy measures but is yet to make a formal proposal.
Qantas also wants to ensure its key domestic competitor Virgin Australia doesn’t “have the benefits conferred by an Australian carrier designation” while having only 20 per cent Australian ownership.
Qantas has floated the idea of a Foreign Investment Review Board review of Virgin’s use of foreign capital injections to “prolong anti-competitive action” in the Australian market.
Transport Minister Warren Truss said Qantas was a strong airline with a good future and its cuts were entirely appropriate as it restructured to be more competitive.
He appeared to rule out providing a loan or financial guarantee to Qantas.
“The government isn’t a banker,” he said.
As well, any change to the Qantas Sale Act – which keeps the airline in majority Australian hands – would be a waste of time and political energy because it would be opposed by Labor and the Greens.
The best thing the government could do was to improve the business environment, Mr Truss said.
Opposition Leader Bill Shorten said in the short-term the government needed to help Qantas staff who were about to lose their jobs in the lead-up to Christmas.
Labor wouldn’t agree to scrapping Qantas’ majority-Australian status, he said.
“We will work with the government as they investigate long-term solutions to some of the structural market challenges that Qantas faces,” Mr Shorten said.
Virgin Australia chief John Borghetti said any government support given to Qantas should also be extended to his airline.
He returned fire on Qantas, calling for the government to investigate its “anti-competitive” strategy of maintaining a 65 per cent share of the domestic aviation market.
ACTU secretary Dave Oliver said the government should act to save Qantas jobs.
Sparks flew in federal parliament when Environment Minister Greg Hunt said the former Labor government’s carbon tax was behind Qantas’ woes.
“I spoke to Alan Joyce an hour ago. The carbon tax has nothing to do with it. Stop politicising job losses. Shame on you,” Mr Shorten shouted across the chamber.
Independent senator Nick Xenophon was joined by Labor senators Glenn Sterle and Alex Gallacher calling for Mr Joyce and the Qantas board to resign.
“What we’ve seen is an airline that has lurched from crisis to crisis, failed strategy one after another,” Senator Xenophon said.
And Transport Workers Union national secretary Tony Sheldon blamed poor management for the job losses.
But industry analysts say Qantas is facing a series of complex industry problems that have not been caused by management.