Qantas Union Joins Chief Executive Alan Joyce in Seeking Federal Assistance, Virgin Australia Stakeholder Urges Abbott Gov’t Not to Prop Up the Weak

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By Vittorio Hernandez | December 6, 2013 10:16 AM EST

Known for their disagreements on many issues, Qantas Chief Executive Alan Joyce and the Australian Council of Trade Unions (ACTU) are on the same side this time in seeking financial support from the Australian federal government to save the flag carrier from a financial crash.

The unexpected alliance is due to an announcement by Qantas on Thursday that it would axe 1,000 jobs in the next 12 months as a result of the expected $300 million loss for the first half of its financial year ending Dec 31.

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ACTU General Secretary Dave Oliver said the planned job cuts deeply concerning as he joined Mr Joyce in seeking a taxpayer-funded assistance package to the embattled air carrier.

Mr Oliver said in a statement, "This is not the time for (Tony) Abbott and (Joe) Hockey to drag their heels ... The ACTU expects the government to step in to ensure a strong, viable national carrier that provides well-paid, secure decent jobs."

Mr Joyce is proposing a share purchase or ownership by the government of Qantas's international division which has been losing money due to foreign competition. He also insisted that rival Virgin Australia, which has also been eating its domestic market share, do not deserve benefits given to an air carrier with an Australian designation since it is only 20 per cent Australian owned.

However, analysts said the Australian Parliament could be reluctant to heed Qantas's request over charges of protectionism after the federal government stopped American agribusiness giant Archer Daniels Midland from offering $2.5 billion for GrainCorp.

IG Markets strategist Evan Lucas pointed out that "Turning Qantas public again by a share purchase buyback would look very, very poor from a protectionist standpoint" even as the Abbott-led government struggles to live up with its "open for business" boast after it blocked GrainCorp's sale.

Virgin Australia sought equal treatment from the federal government if it were to grant Qantas financial assistance, while British billionaire Sir Richard Branson, whose Virgin Group owns a 10 per cent stake in Virgin Australia, joined the call in opposing the financial aid to the ailing Qantas.

Mr Branson said the federal government must not "prop up the weak" as he tweeted that "Qantas won't succeed in bleeding @Virgin Australia dry. Our superior team & service offer customers more choice & value."

He added, "Government should encourage competition, NOT prop up the weak when the going gets tough."

He blamed Qantas's financial woes on mismanagement and poor service.

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