'grave fears' for future of qantas and jetstar

'Grave fears' for future of Qantas and Jetstar
by: By Angela Saurine
From: news.com.au
February 06, 2012 10:47AM




QANTAS CEO Alan Joyce has said he has "grave fears'' for the future of the airline if laws are changed to increase wages for international staff and to keep heavy maintenance in Australia.
Mr Joyce also told a Senate Inquiry the Qantas Group may have to sell its budget offshoot Jetstar and withdraw from services connecting Darwin and Cairns to Asia and Europe if the amendments go ahead.

Mr Joyce and Jetstar CEO Bruce Buchanan are facing a grilling at the inquiry in Canberra today.

Among the issues the inquiry will address is the possibility that Jetstar has broken Australian immigration laws by bringing in foreign flight attendants at lower wages on long daily rosters to work domestic flights.

The committee met twice last November to consider two bills - one concerning flight crew arrangements and the other the enforcement of the intent of the original Qantas Sale Act of 1992.


Mr Joyce said he had "grave fears for the future of Qantas'' if the legislative proposals come into effect.

Amendments to the Qantas Sale Act, which was introduced to ensure Qantas remained a majority Australian-owned flag carrier while also answering to shareholders, would strangle its capacity to run its business, he said.

Senator Nick Xenophon's proposed amendments include requiring that a Qantas Group airline such as Jetstar conduct the majority of its heavy maintenance in Australia.

"Jetstar would then be confronting competitors who enjoy a lower cost base by doing virtually none of their heavy maintenance in Australia,'' Mr Joyce said.

"Those of us running Qantas would have to face a choice: allow Jetstar to fail within the confines of the Qantas Sale Act, or sell it to allow it to succeed outside it.''

Mr Joyce also said amendments to the Cabin Crew Bill would destroy jobs, especially in regional Australia.

"Whenever Qantas Group airlines use foreign crew and Australian crew on the same flights, Australian crew operate under Australian wages and conditions and foreign-based crews on the terms and conditions of their domicile country where they are employed and where they live,'' he said.

"This is standard practice adopted by airlines all over the world.''

Mr Joyce said this occurred on a limited number of flights within Australia involving a domestic sector of an international flight, enabling it to service regional destinations such as Cairns and Darwin.

"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,'' he said.

"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.''

Mr Joyce said Qantas must adapt or die.


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