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Qantas continues to suffer from turbulence, not only because of the $252 million first-half loss reported on Thursday and the looming job cuts of 5,000 spread over three years.
The threat of being unemployed had angered the unions that are now threatening to strike which could further cripple the financially ailing air carrier. To add fuel to the raging labour fire, Qantas is shouldering the $4 million bill of flying the cast and crew of American TV show Modern Family which is shooting a one-off special in Australia.
The Age reports that Qantas staff tried to persuade their bosses not to foot the bill because of the flag carrier's financial woes, but it seems the management of the airline saw it from another light: That the Australia episode will be aired to 125 million viewers who would watch Qantas commercials and would hopefully choose the air carrier next time they travel. A 30-second advert on Modern Family costs about $280,000.
The cast has actually been in Australia for two weeks and Qantas has played the gracious host to them. Ahead of the cast's arrival, Qantas had already spent about $3 million on the Modern Family deal on top of $700,000 for the advanced team.
Angered by what it perceived as unnecessary spending while everyone else is tightening their belt or faces unemployment, ACTU Secretary Dave Oliver said, quoted by The Age, "This is an example of why we want Qantas to look at all options to save costs rather than sack workers. Bringing Modern Family here resulted in Alan Joyce cutting how many jobs?"
Of the 5,000 jobs to be axed, 1,500 would be managerial posts, while the remaining 3,500 would come from the rank-and-file. Qantas is also trimming it services to Singapore as part of its $2-billion cost-cutting programme with the aim of improving the flag carrier's finances on the long term.
The 80 cast and crew of modern family flew aboard an A380 jet, dubbed the Modern Family Flyer, and Qantas has reportedly hosted an expensive party for them in Sydney last week where one of the stars, Sarah Hyland, was groped by a fan.
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Former Qantas chief economist Tony Webber joined the unions in questioning the sponsoship of the Modern Family trip. "If you're losing $252 million a [half-} year, it seems to me to be relatively risky and irresponsible spending that much money," he said.
The deal could be the last straw for the Qantas unions which had threatened to paralyze Qantas operations through strikes, following the announcement of the massive job cuts.
AusFil, an industry-government body, lobbied for the sponsorship of the Modern Family trip by Qantas which in the past and similarly sponsored special shows of Oprah and Ellen shot in Australia.
Amid the seemingly questionable decisions by Qantas Chief Executive Alan Joyce, Chairman Leigh Clifford has stated that the embattled chief executive wouldn't be included in the 1,500 officials to be booted out of the Flying Roo.
In a Fairfax Media editorial, Mr Clifford wrote, "Hard decisions have been needed to reduce Qantas' cost base and improve productivity relative to its major competitors. More hard decisions will be needed in future."
Mr Joyce is scheduled to meet with unions in a bid to quash the crippling strikes. The union would likely bring up the Modern Family deal in the talk.
For sure, among many Qantas employees whose future and career are at stake, one decision they would probably make is not to watch the Australian episode of Modern Family, not wanting to see a TV series that could be one of the reasons they lost their jobs.
Meanwhile, Qantas competitor Virgin Australia also reported over the weekend a $71-million first-half loss. Virgin Australia Chief Executive John Borghetti explained, "The Australian aviation market continues to be impacted by the significant capacity growth which occurred during the 2013 financial year, compounded by weak economic conditions and the inability to recover the cost of the carbon tax."
He said the carbon tax added A$27 million to Virgin's costs.