August 23rd Xenophon Attacks Qantas Management in The Australian.
INDEPENDENT senator Nick Xenophon has launched a scathing attack on Qantas management, accusing it of fudging the books with Jetstar's hidden costs to justify gutting the flying kangaroo. Speaking under parliamentary privilege, Senator Xenophon told the Senate tonight that Qantas management's claim that its international operations were unprofitable needed "forensic examination".
Last week Qantas Airways set a five-year target to return its struggling international operations to profitability, cutting some long-haul routes, deferring orders for Airbus A380 superjumbos, and confirming it was looking to set up a new full-service premium carrier in Asia.
As part of the restructure, Qantas will cut 1000 jobs, including pilots, cabin crew, management and engineering staff.
Senator Xenophon questioned whether Qantas was really losing money.
"Or is it actually profitable, but losing money on paper because it's carrying so many costs incurred by Jetstar?" he asked.
He detailed a long list, provided by insider sources, "where costs should have been billed back to Jetstar but were paid for by Qantas.
"These are practices that Qantas and Jetstar management need to explain," he said.
"Jetstar's costs are magically becoming Qantas' costs."
Senator Xenophon alleged that when Jetstar took over the Cairns, Darwin and Singapore routes, replacing Qantas flights, a deal was struck requiring Qantas to provide Jetstar with $6 million a year in revenue.
He said in Melbourne, Jetstar did not pay for the use of gates and instead Qantas picked up the tab.
"Why does Qantas lease five checking counters in Sydney Terminal Two, only to let Jetstar use one for free?" he said.
Senator Xenophon said when flights were cancelled and people needed to be rebooked, Qantas did the heavy lifting.
"Jetstar never pays Qantas for the cost of rebooked passengers, but Jetstar gets to keep the revenue of the original bookings."
He said this was worth millions of dollars a year.
Senator Xenophon said Jetstar didn't have to pay for the use of replacement aircraft provided by Qantas when its own planes broke down.
"We've been told by Qantas management that the changes that will effectively gut Qantas are necessary because Qantas International is losing money," he told the Senate.
"But given the insider information I've just detailed I would argue those claims need to be reassessed.
"It would be foolish to take management's word Qantas International is losing money."
Senator Xenophon speculated that Qantas was using "a strategy of private equity selloff by stealth" to avoid breaching the Qantas Sale Act.
"That doesn't stop you moving assets out of Qantas and into an airline you own, but isn't controlled by the Act."
He said Qantas group would end up with a whole lot of subsidiaries it could base overseas, using poorly paid foreign crews and engineering and safety standards that do not match Australian standards.
"In time, if the Qantas group wants to make a buck it can flog these subsidiaries off for a tidy profit," he said.
"Or is it actually profitable, but losing money on paper because it's carrying so many costs incurred by Jetstar?" he asked.
He detailed a long list, provided by insider sources, "where costs should have been billed back to Jetstar but were paid for by Qantas.
"These are practices that Qantas and Jetstar management need to explain," he said.
"Jetstar's costs are magically becoming Qantas' costs."
Senator Xenophon alleged that when Jetstar took over the Cairns, Darwin and Singapore routes, replacing Qantas flights, a deal was struck requiring Qantas to provide Jetstar with $6 million a year in revenue.
He said in Melbourne, Jetstar did not pay for the use of gates and instead Qantas picked up the tab.
"Why does Qantas lease five checking counters in Sydney Terminal Two, only to let Jetstar use one for free?" he said.
Senator Xenophon said when flights were cancelled and people needed to be rebooked, Qantas did the heavy lifting.
"Jetstar never pays Qantas for the cost of rebooked passengers, but Jetstar gets to keep the revenue of the original bookings."
He said this was worth millions of dollars a year.
Senator Xenophon said Jetstar didn't have to pay for the use of replacement aircraft provided by Qantas when its own planes broke down.
"We've been told by Qantas management that the changes that will effectively gut Qantas are necessary because Qantas International is losing money," he told the Senate.
"But given the insider information I've just detailed I would argue those claims need to be reassessed.
"It would be foolish to take management's word Qantas International is losing money."
Senator Xenophon speculated that Qantas was using "a strategy of private equity selloff by stealth" to avoid breaching the Qantas Sale Act.
"That doesn't stop you moving assets out of Qantas and into an airline you own, but isn't controlled by the Act."
He said Qantas group would end up with a whole lot of subsidiaries it could base overseas, using poorly paid foreign crews and engineering and safety standards that do not match Australian standards.
"In time, if the Qantas group wants to make a buck it can flog these subsidiaries off for a tidy profit," he said. "Or is it actually profitable, but losing money on paper because it's carrying so many costs incurred by Jetstar?" he asked.
He detailed a long list, provided by insider sources, "where costs should have been billed back to Jetstar but were paid for by Qantas.
"These are practices that Qantas and Jetstar management need to explain," he said.
"Jetstar's costs are magically becoming Qantas' costs."
Senator Xenophon alleged that when Jetstar took over the Cairns, Darwin and Singapore routes, replacing Qantas flights, a deal was struck requiring Qantas to provide Jetstar with $6 million a year in revenue.
He said in Melbourne, Jetstar did not pay for the use of gates and instead Qantas picked up the tab.
"Why does Qantas lease five checking counters in Sydney Terminal Two, only to let Jetstar use one for free?" he said.
Senator Xenophon said when flights were cancelled and people needed to be rebooked, Qantas did the heavy lifting.
"Jetstar never pays Qantas for the cost of rebooked passengers, but Jetstar gets to keep the revenue of the original bookings."
He said this was worth millions of dollars a year.
Senator Xenophon said Jetstar didn't have to pay for the use of replacement aircraft provided by Qantas when its own planes broke down.
"We've been told by Qantas management that the changes that will effectively gut Qantas are necessary because Qantas International is losing money," he told the Senate.
"But given the insider information I've just detailed I would argue those claims need to be reassessed.
"It would be foolish to take management's word Qantas International is losing money."
Senator Xenophon speculated that Qantas was using "a strategy of private equity selloff by stealth" to avoid breaching the Qantas Sale Act.
"That doesn't stop you moving assets out of Qantas and into an airline you own, but isn't controlled by the Act."
He said Qantas group would end up with a whole lot of subsidiaries it could base overseas, using poorly paid foreign crews and engineering and safety standards that do not match Australian standards.
"In time, if the Qantas group wants to make a buck it can flog these subsidiaries off for a tidy profit," he said.
"Or is it actually profitable, but losing money on paper because it's carrying so many costs incurred by Jetstar?" he asked.
He detailed a long list, provided by insider sources, "where costs should have been billed back to Jetstar but were paid for by Qantas.
"These are practices that Qantas and Jetstar management need to explain," he said.
"Jetstar's costs are magically becoming Qantas' costs."
Senator Xenophon alleged that when Jetstar took over the Cairns, Darwin and Singapore routes, replacing Qantas flights, a deal was struck requiring Qantas to provide Jetstar with $6 million a year in revenue.
He said in Melbourne, Jetstar did not pay for the use of gates and instead Qantas picked up the tab.
"Why does Qantas lease five checking counters in Sydney Terminal Two, only to let Jetstar use one for free?" he said.
Senator Xenophon said when flights were cancelled and people needed to be rebooked, Qantas did the heavy lifting.
"Jetstar never pays Qantas for the cost of rebooked passengers, but Jetstar gets to keep the revenue of the original bookings."
He said this was worth millions of dollars a year.
Senator Xenophon said Jetstar didn't have to pay for the use of replacement aircraft provided by Qantas when its own planes broke down.
"We've been told by Qantas management that the changes that will effectively gut Qantas are necessary because Qantas International is losing money," he told the Senate.
"But given the insider information I've just detailed I would argue those claims need to be reassessed.
"It would be foolish to take management's word Qantas International is losing money."
Senator Xenophon speculated that Qantas was using "a strategy of private equity selloff by stealth" to avoid breaching the Qantas Sale Act.
"That doesn't stop you moving assets out of Qantas and into an airline you own, but isn't controlled by the Act."
He said Qantas group would end up with a whole lot of subsidiaries it could base overseas, using poorly paid foreign crews and engineering and safety standards that do not match Australian standards.
"In time, if the Qantas group wants to make a buck it can flog these subsidiaries off for a tidy profit," he said.
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