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Qantas chief says airline survival in national interest

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(Globalpost/GlobalPost)

Qantas chief Alan Joyce said Friday the Australian airline's survival was in the national interest as he held crisis talks with unions and stepped up pressure on the government to help stem massive losses.

After a round of breakfast interviews in the wake of a Aus$235 million (US$210 million) loss in the six months to December 31, Joyce met with union heavyweights to explain his decision to axe 5,000 jobs and freeze wages.

It follows complaints of no consultation and threats of strike action.

"It's easy for him to start bandying about numbers but what we're talking about is 5,000 livelihoods," said Australian Council of Trade Unions secretary Dave Oliver, pre-empting what could be bruising discussions over the heavily unionised airline's future.

The Flying Kangaroo was crippled by a series of rolling staff strikes in 2011 that culminated in Joyce grounding the entire fleet for two days, stranding tens of thousands of passengers worldwide.

Joyce said industrial action would only add "oil to the fire" and urged unions to work with him and the government to move the airline forward.

"We need this to be resolved and we need this to be resolved soon," he told ABC radio.

Qantas's drastic restructuring, which also involves deferring delivery of new aircraft, is part of a plan to save Aus$2 billion over the next three years as it battles record fuel costs and fierce competition from subsidised rivals.

Its major domestic competitor, Virgin Australia, is also suffering, posting its own first-half net loss of Aus$83.7 million on Friday, blaming its battle with Qantas for domestic market share and economic uncertainties.

Joyce wants the Qantas Sale Act, which limits foreign ownership in the airline to 49 percent, changed so it can access more capital, while appealing for the government to guarantee the carrier's debt.

"Having a national airline is a national interest," said Joyce, who pointed to the carrier previously rescuing Australians in Egypt and Bali during times of turmoil.

"We are there at times of defence needs and there is a national interest for us."

While Canberra said it was open to pushing for changes to allow majority foreign ownership -- a move opposed by the Labor opposition and the Greens which can block it in the upper house Senate -- it appears to be backing away from a debt guarantee.

"The difficulty is this -- what we do for one business, in fairness, we have to make available to all businesses," Prime Minister Tony Abbott told parliament when asked about the issue.

Joyce said Qantas only wanted "a fair go" on a level competitive playing field and that any debt guarantee would just be a standby facility to be used in an emergency.

"The best way to guarantee the security of Australian jobs is to have a profitable, fit Qantas that can compete in the current environment," he said.

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http://www.globalpost.com/dispatch/news/afp/140227/qantas-chief-says-airline-survival-national-interest