Qantas chief slams pro-Australia laws

Monday, 06 February 2012 09:23

SYDNEY: Qantas chief Alan Joyce on Monday warned the airline would be forced to slash services and expressed "grave fears" for its future if proposed laws strengthening its ties to Australia went ahead.

Joyce said a bill, which would force Qantas to keep its headquarters and the majority of maintenance, flight operations and training in Australia, posed a "major threat" to the airline's business and to jobs.

"If Australians want a truly competitive national carrier, this parliament cannot tie up Qantas in this way," Joyce told a Senate hearing into the proposal.

"You would be responsible for making Qantas less competitive just when we most need the freedom to compete."

Put forward by independent Senator Nick Xenophon, the so-called "Still Call Australia Home" bill aims to tighten conditions set down when the formerly state-owned airline was sold off in 1992.

Xenophon has also proposed amending aircraft crew laws to force all Australian airlines and their subsidiaries to offer overseas-based flight and cabin crew on its services the same wages and conditions as local staff.

Joyce said foreign crew were only used on a limited number of Qantas flights in Australia but they were paid "domicile country" rates -- a standard international practice that was vital to keeping those services viable.

"If the amendments are passed, and international crews are treated as Australian in terms of wages and conditions on domestic legs of international flights, we will no longer be able to viably operate those international services," Joyce told lawmakers.

"The proposed amendments would quite simply force the Qantas Group to withdraw from services connecting Darwin and Cairns to the tourism and trade markets of Asia and Europe."

Xenophon's proposals follow a bumpy year for Qantas in 2011 which saw its entire worldwide fleet grounded for 48 hours as part of a protracted labour row with staff over plans to shift its ailing international arm to Asia.

Angry unions repeatedly walked off the job, accusing Irish-born Joyce of attempting to "Asianise" Qantas and outsource jobs in the name of profit.

The dispute cost Qantas Aus$194 million (US$208 million), but Joyce has insisted he will push ahead with the plan, which features the establishment of budget carrier Jetstar Japan and a second Asia-based joint-venture premium airline.

Joyce urged the Senate committee to remember the "global and national realities that frame our times" including debt strains in the US and Europe, warnings of deep downturns from the IMF and World Bank and local job losses.

Ratings agency Moodys downgraded Qantas's long-term senior unsecured rating to Baa3 from Baa2 with a stable outlook last week, citing high fuel prices, strong competition and a difficult operating environment.

"The reality is simple -- we must all adapt or die. At Qantas we want to adapt, we must adapt if we are to survive," Joyce said.