Key elements in the current Qantas restructuring are to be examined in a Senate Inquiry next month into a proposed amendment to the Qantas Sale Act and the shutting down of alleged slave labor foreign flight attendant rostering on Jetstar domestic flights.
Among these and other things, the action is clearly aimed at preventing the leaking of Qantas assets into offshore activities through the use of its Jetstar low cost franchise.
The Still Call Australia Home initiatives are clearly explained on the APH web site.
In summary it says:
Air Navigation and Civil Aviation Amendment (Aircraft Crew) Bill 2011; Qantas Sale Amendment (Still Call Australia Home) Bill 2011
Information about the Inquiry
On 18 August 2011 the Senate referred the Air Navigation and Civil Aviation Amendment (Aircraft Crew) Bill 2011 for inquiry and report.
On 14 September 2011, the Senate referred the Qantas Sale Amendment (Still Call Australia Home) Bill 2011 for inquiry and report. The Committee will inquire into the bills concurrently.
The Air Navigation and Civil Aviation Amendment (Aircraft Crew) Bill 2011 will require that Australian airlines and their subsidiaries provide pay and conditions for overseas-based flight and cabin crew operating on their flights that are no less favourable than if they were directly employed by the Australian airline.
Schedule 1 of the bill amends the Air Navigation Act 1920 to place a new condition on the international aviation licences held by Australian airlines or the subsidiaries or associated entities of Australian airlines. Schedule 2 of the bill amends the Civil Aviation Act 1988 to place a new condition on all new and existing Air Operator’s Certificates (AOCs).
With respect to this bill the inquiry will consider issues of safety (including fatigue), pay and working conditions and the effect on Australian jobs due to the use of overseas-based crew by Australian airlines and their subsidiaries.
The Qantas Sale Amendment (Still Call Australia Home) Bill 2011 seeks to amend the Qantas Sale Act 1992. The bill inserts a definition for “associated entity” into the Act, in line with section 50AAA of the Corporations Act 2001. The bill requires that:
• Qantas ensure that, of its facilities broadly, its principal operational centre is located in Australia;
• Qantas, as a parent company, ensure that its subsidiaries and associated entities – such as Jetstar – have its principal operational centre located in Australia;
• the majority of heavy maintenance of aircraft and the majority of flight operations and training conducted by Qantas or by its subsidiaries and any associated entities is conducted in Australia; and
• at least one of the Directors of Qantas has a minimum of 5 years’ professional flight operations experience and that at least one of the Directors has a minimum of 5 years’ aircraft engineering experience.Currently the Qantas Sale Act only allows an application to the Court for injunctions by the Minister. The bill extends this to allow for applications to the Court by 100 shareholder members or shareholder members who hold at least 5 percent of the shares in Qantas.
In summary we can reasonably say this is all about holding Qantas to its word that its Australian icon branding isn’t based on lies or evasions.
It is understood that submissions did not close as indicated on 14 October and are still being received, and that hearings are intended to be conducted next month with a view to reporting before its end.
32 Comments
HOORAY!! Thank you Senator Xenophon for sponsoring safer skies.
A “Plimsoll line” for cabin safety may become a reality yet.
This is a great result. Lets hope it gets the support of the parliament and gets through.
What a novel idea to have people with actual operational aviation experience on the board. HOORAY indeed.
Section 28CA of the Air Navigation and Civil Aviation Amendment (Aircraft Crew) Bill 2011 has massive implications for Jetconnect and Pacific Blue operations.
I expect Qantas and Virgin Australia to fight this one tooth and nail.
Qantas already has a huge amount of restrictions on it in regards to foreign ownership. This bill then proposes that they can’t even operate their maintenance and crewing internationally (restrictions that aren’t there for Virgin or Tiger)? Talk about protectionism.
What happens to engineering in Australia when Emirites, Singapore and other flag airlines respond in kind and cancel their contracts with AMSA? A whole lot of work going to NZ (where Virgin does a lot of it’s heavy maintenance), that’s what.
Then the injuctions; do we really want 100 shareholders (regardless of the number of shares they own collectively) having the ability to stop Qantas from operating? The Government forcing Qantas shareholders to elect a pilot and an engineer on the board?
This is a Bob Brown inspired, populist, anti-free trade, rubbish ammendment that will hopefully end up being vertically filed in the bin. I’d be shocked (and disappointed) if Labor or Liberal votes for it.
At last……..!
Can’t wait for OW or AJ’s media release on this….!!
Who will they blame……?
This is absolutely *****ing garbage. Expect a huge shareholder revolt. Shareholders put their money in this corporation not for shits and giggles, to get a return. This kind of intrusive bullshit is NOT what I expect my government to spend its time doing.
The Air Navigation and Civil Aviation Amendment (Aircraft Crew) Bill 2011 will require that Australian airlines and their subsidiaries provide pay and conditions for overseas-based flight and cabin crew operating on their flights that are no less favourable than if they were directly employed by the Australian airline.
- That is fair. The rest can suck a big fat one.
These amendments seem very much in the spirit of the 1992 Act of Parliament, and I compliment Xenophon for having the courage & integrity for raising the issues.
Some of the commentary here seems to suggest the sole reason Qantas exists is to provide a return to shareholders. However, if the method employed, even in part, is overworking their operational staff the point of exhaustion, then the government can and should legislate against this.
In fact, Qantas exists for more than just generating ROI. They are still our natinal carrier (attempts by the current CEO to abrogate this notwithstanding). The company management, and mainstream media, need to start honouring the skilled workers that keep our airline operating safely.
The sad thing is that apparently more legislation is necessary to ensure the intent of the original legislation. One CEO wants to sell the company to a Venture Capital firm, and the next one wants to wind down anything with a red tail to get around the law. Short of returning Qantas to public ownership, this potential legislation seems like a reasonable idea.
Fully privatise in haste and repent at leisure – once again the progressive politicians fixing the stuff up of the conservative ones.
The argument about shareholder returns is a furphy. You haven’t had a dividend for a few years and the share price has tanked to a greater level than the ASX generally, you can’t do much worse than you already are!
Hey joey , I reckon shareholders should remove the board and CEO for the appalling stewardship shown by them and their approach to employee relations Anyone currently holding Qantas are either asleep at the wheel, masochistic or just very daring bottom feeders looking for a rebound.
Oh yeah…..!!
I wonder how Alan Joyce and his razor gang will respond to this; Senator Nick Xenophon you are the knight in Shining armour for our wounded Kangaroo.
Lets hope the focus will now go back to growing (and buying) the right aircraft for our “National” airline – Qantas! This blatant disregard to an Australian strategic and national icon has gone on far to long.
The next step is a comprehensive clean out of the current board and all the Dixon puppets within it.
@ Joey – if you like investing your money without it paying you dividends, or if like taking extremely high risk gambles, why not stroll over to a Casino near you – where your blind, ill informed wisdom won’t affect the very people who actually care for, and want to organically grow the Flying Kangaroo. Its very employee’s.
Also please bring on the forensic government audit into the blatant misguided management at Qantas, its time to see how much these corporate wolves have impacted the core business.
Oops! Sorry to spoil a nice line (…progressive politicians fixing the stuff ups of conservatives…) 2353, but you will note that the 1992 date attached to the Qantas Sale Act, is a bit of a giveaway that QF was privatised by a Labor Administration (“progressive”) not a Coalition (“conservative”) one. Likewise, the flogging off of the airports – the unfortunate consequences of which will be with us forever more.
Yes Great , lets get back to pre privatization days when taxpayers had to “refinance” Qantas every year because it could not pay it’s way, when only a whisper of strikes might mean the kangaroo tail might not appear in LHR, (Oh the shame), who needs shareholders when you can rely on the taxpayer?
Ben – I need to take my hat off to you, if you’re not in the pocket of the unions you are with supporting a worthless cause in the Federal Senate by the famous Nick Xenophon (your best mate it seems).
Let get some facts straight – Facts you diligently disregard in your blog …
1.) QF is in dire trouble and I’m only too happy to proportion some of the blame on QF management. Indeed the bonus’ given to them this year is a complete slap in the face to common QF staff who are doing it tough (Union and non-Union) and are concerned about their roles. However the unions are also to blame – Fact. There is no such thing in this world as job security, if they want it, go back to Communist Russia and fly for Aeroflot!
2.) Some union members seem hell bent on running Qf into the ground (You could say that of the Management as well I suppose) – Saying to the public that they should not fly on QF is an amazingly damaging statement – one that union and non-union members should be ashamed of (I also note comments by former union members now holding place in the federal government). Fact – If any union believes that somehow the people of Australia and the government will come running over the hill to rescue them they won’t. Think Ansett, and also consider that most QF employees are quite well paid compared to the average Australia. Especially the pilots … To many Australian’s the thought of bailing out a company that is at war with itself and only has itself to blame would be repugnant.
3.) Fact – Most unions claim the public support them … They don’t. Taker the SMH online poll last week. Of more than 20k participants (Not a mall figure) 60%+ blamed the unions for the mess at QF. 30% to its management. 10% to both.
4.) Fact – The campaign against foreign investment and employment overseas is simply xenophobic … Lets face it. Thousands of Australian companies have employees in overseas stations and they pay according to the local wages/rates – Why should QF be any different? There is nothing wrong with this as long, one could argue, as the wage is competitive. You seem to imply that people work under slave labour conditions if they work in an overseas base – Crap, pure crap and you know it – Fact. Are you honestly saying the NZ based pilots are not paid a good wage? They are by NZ standards and are competitive with NZ … If they weren’t they would walk? Or are they all slaves and have no choice?
Lets take another scenario of pure economics (Of which you are clearly not a master) – What say if we do equalise pay rate between overseas bases and Australia. Let say crew in the UK get the same rate as crew in australia. Then lets say the pound appreciates making QF’s UK crew earn “more” compared to Australia standards. So – Under the union’s and your lame ideas that means all of Australia’s crew should have a pay increase … So that’s just a great outcome … A base of say 300 crew in the UK all of a sudden force pay increases for the 1,000′s of crew in australia … Or are you suggesting the UK crew should take a pay cut? I’ll let you figure that one out for yourself …
5.) Fact – I note some comments from people earlier about bringing jobs/growth back home. I can honestly say this is completely narrow minded – for one I’d ask people to look at the growth profile of QF over the years. It has been huge and I know Ben, your wedded to those LHr routes that have been cancelled but again lets look at the facts – HKGLHR alone has 4xCX, 2-3xBA, 1-2xVS and soon Hong Kong Airlines will fly the route. Against such stiff competition QF is a minor player on the route … And with CX’s superior product I’d fly them anyway. I don’t think you understand route economics and seem to just want to fly routes for the sake of it … good strategy to remain in business!
6.) One more point with regard to the legislation – I note there should be Board positions for a “flight Ops” person (Assuming a pilot) and one from a licence engineering background – So we know who helped write the legislation then – You guessed it. What about cabin crew, the largest workforce in QF? Or the ground staff, or indeed those from Cargo, Head Office, Catering etc.? You seriously trying to argue that they contribute less or should have less say than pilot and engineers. This is really pathetic. Lets also look at overseas experiences where unions have won the right to sit on the board – UA, that fantastic America icon that has been so profitable for so many years (Not). One of the key contributing factors to its downfall was the union won posits on the Board and essentially voted for pay rise after pay rise … And you guessed it, Chapter 11 came and went and almost everyone lost their retirement nest egg and many lost their jobs … Smart outcome (Why do you think the average age of an UA crew member is so high … they need to keep working)! That of course won’t happen at QF … Will it?
As a former employee of QF (And current shareholder) I know I am not alone in feeling incredibly frustrated and annoyed the lies perpetuated by both sides in this dispute and the complete incapacity of the media and observers (You included Ben) to actually walk through the critical points in this debate – your chosen method seems to be to personally attack QF Management for either not buying 77W’s (This is getting a bit long in the tooth), having engines blow up (An issue yes but not the overall reason why the company is where it is today) and the conspiracy belief that somehow the QF management want to kill the airline off bit by bit (The damage they are doing is because they are incompetent not malicious … I chuckle the news gets out last week they are examining a uniform change when all this is going on … Really quite sad) .
The bottom line, and I recognise that it is a hard thing to do, both sides need to agree on an outcome and get on with competing urgently. In the interim other airlines will continue to steal market share by offering and reliable and superior service. Also, if QF continues to focus only on its backyard then it will become irrelevant on the world stage, leaving a shell of it former self (Assuming it will continue to exist).
So, there you have it Ben … why don’t you commit to offering a clear, unbiased (Difficult I know) commentary because this is not a game, this is QF on the brink which I think people fail to realise. That $4bn QF keeps saying they have in cash will disappear more quickly that Dolly Parton’s virginity in her teens if the world economy goes south … Which it seems to be doing again!
Some food for thought for you.
Luckily there’s next to zero chance of this getting up. Section 28CA by itself would result in the immediate sale of Jetconnect and Pacific Blue to a NZ company so they wouldn’t be instantly driven out of business by Air NZ.
Aviation Management,
Whoa. I’ve been boiled in oil by the pilots for years for supporting the expansion of low cost carriers, and have several times criticised the ‘don’t fly Qantas’ calls, both here and on radio, not just because it is silly, but it is Qantas/Jetstar way or the highway, as Virgin Australia isn’t into growth in a hurry.
In the current situation it is clear that the legacy media is lazy and disengaged with the full picture. The whole picture is important, regardless of where people identify their particular interests or persuasions. So I feel it is an obligation to bring those matters into view.
You have already confused, as people often do, the process of reporting a development, in this case a Senate inquiry and two proposed bills, with bias on my part. Would you rather that this matter not be raised, and that the bills not be discussed in the media, and that the public, the shareholders, the employees and indeed those working in Australian trade relations just discover one day what the parliament has decided, for better or worse.
Ad hominem arguments are pointless when in fact you raise a number of common sense concerns, and also try to totally rewrite history, with a cute little detour in 50s reds-under-beds. Oops, Ad furniture arguments from me, Sorry.
Qantas is as we all know (and some of us know is a lie) is the world’s only investment grade airline, so it can hardly be teetering on the edge of doom. And the indentured labor from Thailand for Jetstar is Thailand’s best practise. We are blessed. Can you imagine the benefits this brings to Australia. A disciplined fearful work force. People who have to pay you, the proprietor, a few months base wages if you fire them for any reason. Introducing them to our skies at the end of 20 hour shifts when they are at their best, when they aren’t trained to our standards in first aid, heck, this is cultural enrichment on a grand scale. Toughen up Australia.
I could go on. Let me tell you a secret. My approach to air transport stories is to report the things the captured media doesn’t, who thus censor the material that their readers can consider in making their own views. I do have close to 51 years experience as a reporter, starting as a copy boy who impersonated reporters and wrote stories, and then became a shipping cadet. I saw the rise of compound radial engines as well as the jet age come, and the end of the age of the great ocean liners, and, while infatuated by the rise of modern transport mobility, have become intrigued by the contest between what is real and what is contrived in communications between those who see themselves as rulers, and those who are ruled.
Well Ben I for one am glad you raise these issues in a forum. As you say the mainstream media probably has commercial interest in presenting the QANTAS side of the current arguments.
Only the ABC appears to have an unbiased approach. (mind you they can be very selective also).
“Aviation management” comments try to appear even handed however its easy to read between the lines.
I must say I’m sick to death of major companies in Australia professing the “look after shareholders” line. What it basically means is pursue profit at any cost. They fail to realise that they have customers and as a forced frequent international traveller of 30 years I have had to put up with the whims of school boy managers such as Dixon and Joyce and previously the kiwi Ansett mob and the master of spin James Strong.
The simple fact is that when QANTAS lost its free ride on monopoly routes to the UK and USA the existing management didn’t have a clue what to do. I remember when China began booming that QANTAS gave away slots to Beijing and cancelled that route . They did the same with Mumbai. Their next major step with Dixon was to centralise everything to Sydney which, to this day , forces anybody outside of Sydney to have terrible connections to anywhere in Europe. He also spent zillions on lounges which remain in Sydney half occupied most of the time but I suspect looked after his “mates”.
Joyce and his board clearly have a sub agenda. Remember Joyce was in the chair only a month when he tried to suggest buying the almost bankrupt BA!
I could list many more points that suggest that the QANTAS board has an ulterior motive for basically dumping the international business however I think it is simply a matter of incredible incompetence viz the latest nauseating full page ads of the last month. Are they really that STUPID. I think so.
Bear, on checking Qantas was “privatised” in three tranches – the final one where the Government disposed of it’s remaining shares (and any ability to control the enterprise) was held in the 1996-97 Financial Year (Source Australian Budget Papers via Wikipedia). Effectively the Australian Government lost all control of Qantas during a Conservative Government – who sold off the remainder of a number of former Government Businesses for which “the unfortunate consequences of which will be with us forever more” as you rightly state.
Bear, The extract below is from the ABC PM archive.To me it looks as though the Coalition may have sold Sydney Airport.
Sydney Airport sold
PM Archive – Tuesday, 25 June , 2002 00:00:00
Reporter: Ian Henderson
COMPERE: The Prime Minister, John Howard, and the Treasurer, Peter Costello, have just made a whole lot more money to repay part of what remains of Commonwealth Government debt.
The Southern Cross Consortium, led by Macquarie Bank, is the successful bidder for the airport and the purchase price is a fraction less than $5.6 billion.
Macquarie Bank CEO, Allan Moss, told a press conference in Sydney this afternoon, that he and his colleagues in the consortium believe the purchase is good business.
Where does this “Qantas is the world’s only investment grade airline” nonsense coming from in every other thread here lately? That is utter nonsense. There are many airlines with superior credit ratings, profit margins, operating margins, debt to equity ratios, return on equity, stock price performance, operating performance, punctuality, reliability, etc., etc. – choose your metric, this statement is simply not true, so why do you keep repeating it?
Aviation management – cupla things
Sandilands doesn’t need me to defend him but I take issue with what I would characterise as a somewhat one-eyed view and I think your accusations are unfounded, broad and inaccurate.
1) you’ve got a couple of facts in here a) QANTAS is in dire trouble – mmmm? Maybe but if so, Joyce should be fully disclosing this and he’s not so maybe the trouble is not quite so dire as you believe. (and it’s ‘apportion’ not ‘proportion’). b) ‘there is no such thing as job security’ – this has been dealt with earlier so its unfair to say Sandilands has not dealt with it. At any rate, under Australian law, it is perfectly legal, reasonable and appropriate for a union to make such a claim and equally reasonable (in a legal sense) for the employer to reject it. Our system then allows a period of industrial action as a way of resolving the dispute. The system may not be to your liking but that’s the system we have.
2) Purvinas didn’t say ‘don’t fly QANTAS’ although this is substantially what was reported. What he said was far more measured and responsible that that. It’s unfair to keep verballing him and the unions in this way. The point about the public engagement has also been dealt with comprehensively in earlier posts so the accusation against Sandilands is again unwarranted.
3) ‘Most unions claim…’ I don’t see how such broad simplisms achieve much. I’ve spent a lot of time in and around industrial campaigns and unions are keenly aware of how rare and fickle public support is – even for the most meritorious claims. Newspaper polls are notoriously inaccurate as they are based on a flawed methodolgy and their object is not to inform but to allow people to feel they are participating.
4) The slave labour reference was a reference to staff being ‘bonded’ to the airline. It’s a specific reference to specific acts not a general reference to overseas-based staff. If you go back through the blogs you’ll find the story. The practice was reprehensible and completely at odds with values held very broadly in Australia.
I don’t remember Sandilands advocating pay equalisation but I recall him saying that using the lowest common pay rate is a bad idea, commercially and morally. I’m happy to be pointed to the blog that supports your accusation though.
5) Don’t know can’t comment. You could be right.
6) Again, a few things in here a) ‘seriously trying to argue’ as Sandilands points out, reporting isn’t arguing. It might be worth reading the post again. b) I don’t know what evidence you have for the assertion that union representatives on a board mean they get to vote up any proposition put to the board or that they are unable to vote intelligently and responsibly but I think you are mistaken. Nor do I see any morally acceptable reason why employee representatives should be prohibited from being on boards – they have as much (and often more) stake in the companies success than speculators do. I don’t know of any board in a corporation where unions hold the majority of votes necessary to do what you say they did. I do know that Australian industry super funds, that always have an employee representative, consistently out perform the private for-profit funds. I also know that board members, whoever they represent, have fiduciary duties and it would be dishonest and probably criminal (to say nothing of completely counter-productive and illogical) for them to deliberately milk a company dry.
7) ‘The bottom line, and I recognise that it is a hard thing to do, both sides need to agree on an outcome and get on with competing urgently.’ I think this is absolutely right but if you look at the history of these disputes you see that QANTAS management seem intent on a blue. In order of merit I think the pilots, LAMEs and TWU have conducted themselves well within the bounds of reasonable behaviour. You might not agree but my analysis is based on greater industrial relations experience than yours (yes that’s a guess but it’s a good guess)
Finally, is QANTAS ‘on the brink’ or do they have $4billion in cash? The two position don’t seem compatible to me.
So overall I think your spray misses the mark. Thanks for reading to the end
Having personally been involved in a Senate Inquiry which exposed the blatant mis-management of CASA by an autocratic CEO I believe it’s an excellent platform to ask Qantas all the tough questions at the most senior level to seek out any hidden agendas. The side issues that also come out during the direct questioning process are also very useful to expose attempts to bury the dirty management laundry.
TomTom : Well, the ‘world’s only investment grade’ airline may be an exaggeration, as there are a few others (Air NZ, Lufthansa). The ‘investment grade’ airline refers to the bond, not to the shares.
http://www.theaustralian.com.au/business/aviation/qantas-shares-gain-as-ratings-agency-upgrades-outlook-from-negative/story-e6frg95x-1226127175793
Qantas does not carry a lot of debt, which is not true of most other airlines.
The Qantas board right now does not include anyone with piloting experience, which unfortunately means they do not fully comprehend the airline business. It doesn’t matter how much money you save on maintenance : when one planes falls out of the sky due to poor maintenance, your share prices will plunge. If two planes falls out of the sky, your airline is finished. Furthermore, route is more important than price, as travellers hate transfers, especially to a different airline. Some of the recent route decisions are ‘suboptimal’, to say the least.
>”Qantas does not carry a lot of debt, which is not true of most other airlines.”
All airlines are heavily leveraged, most of them losing buckets of money.
>”Furthermore, route is more important than price, as travellers hate transfers, especially to a different airline. Some of the recent route decisions are ‘suboptimal’, to say the least.”
On heavy traffic routes, like LA and London, the new planes are used with a high rotation and high capacity.
The very high depreciation cost is offset by the higher revenue stream as these planes have less down-time for maintenance.
On the lower traffic routes and in the between-schedule times, old crates are used, which are much cheaper to run but also generate less revenue because of down-time.
The higher maintenance costs of an old plane do not outweigh the much lower depreciation (and interest) costs.
Aviation Management……by your pure title it seems you want your audience to show you respect…..for you are about to grace Mr Sandilands with your ‘managers’ knowledge. But sadly you earnt the respect similar to that of a schoolyard bully. Your wild tirade towards Mr Sandilands was uncalled for and commands no respect.
All humans are entitled to their opinion including Mr Sandilands and yourself. However you agression would be better suited to boxing ring than discussing issues with seemingly intelligent and well informed people on this site.
In my time spent in management change and corporate insolvency I have seen alot of anger similar to yours but seldom do your ‘facts’ actually stack up. A full forensic audit would solve many questions here, for you and for the audience reading Mr Sandilands column. I think you have no right at all to address the man responsible for this column in the manner you just have. It really is quite disgusting.
Has anyone seen this following article????
http://news.ninemsn.com.au/article.aspx?id=8361272