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Call to probe health of Qantas
A SENATE inquiry into Qantas has said a repeal of the Qantas Sale Act to allow more foreign ownership was an inadequate solution for the airline and has called for an “urgent” review of the national aviation sector.
A Senate committee says Qantas, led by chief executive Alan Joyce, has ‘no clear and consistent policy in terms of its future direction’ The rural, regional and transport affairs references committee, dominated by ALP members, said the government should first determine the “current financial situation” of Qantas beyond public reports before deciding on the type of parliamentary action required to help the airline.
“The ‘Qantas problem’ cannot be fixed with a band-aid solution such as the Qantas Sale Amendment Bill 2014 proposed by the government or the debt guarantee proposed by the opposition,” the committee reported.
It called for a review of the “broader aviation sector in Australia” and the “challenges faced by Australian Airlines on a geographical and regulatory basis”.
“(We recommend) that the government take no further action on legislative or other reform and provide no assistance or guarantee to Qantas until an independent audit of the company has been completed,” the committee wrote.
“(That audit) should also seek to establish the level of any costshifting between Jetstar and Qantas.”
The transport unions — in claims pushed by committee member and independent senator Nick Xenophon — allege Qantas has shifted some of the costs of its Jetstar International expansion on to Qantas International operations.
The unions argue the Jetstar foray into Asia, a key aspect of Qantas chief executive Alan Joyce’s tenure, has been a disaster and the failures are being masked to some degree by “cost sharing”.
Qantas has repeatedly and strenuously defined those claims.
The committee called for the Air Navigation Act 1920 to be amended to “address the apparent loophole that allows the foreign investment cap to be obviated” as was “demonstrated by the restructure of Virgin Australia”.
The government “as a matter of urgency” should consult with industry and other relevant bodies to formulate terms of reference for a “comprehensive review of Australia’s aviation sector”, the committee said.
That review should include examination of the Open Skies policy and its impact on operators and consumers and should be undertaken by the productivity commission, the committee said.
It criticised Qantas as having “no clear and consistent policy in terms of its future direction” or at least not one “they are willing to discuss in the public sphere”.
“Legislative changes made by the government or other measures, including a debt guarantee, may not have the intended impact if there is not the ability or the will within Qantas to take advantage of them”.
The committee said Qantas had not stated a “strong position: on what specific changes it needed to recover, “other than insisting it is operating on an ‘unlevel playing-field’ compared to Virgin Australia”.
“It would perhaps be more useful and inspire greater confidence on the part of employees and consumers if Qantas were to have a clear strategic plan and a ‘wish list’ of actions for the government. This would demonstrate an engagement on the part of Qantas and assist the parliament in ensuring any action taken has the desired outcome.”
Committee member and Greens senator Lee Rhiannon accused the ALP of siding with Qantas via the committee.
“This inquiry was set up to investigate options available to the government to financially assist Qantas in the interests of protecting jobs and the national carrier,” Ms Rhiannon said.
“It’s clear Labor has caved to the pressure from Alan Joyce and senior Qantas management.
“They are willing to sell off the heart and lungs of the airline while trying to dud us into believing they want an Australian owned Qantas,” she said.