The coalition and Labor are at odds over government steps to help Qantas return to profit, as the airline announces 5000 job cuts.
The federal government has all but rejected a debt guarantee for Qantas after the airline announced a massive loss and plans to shed 5000 jobs.
The national carrier posted a $252 million half-year loss on Thursday, due to a tough fight with a cashed-up Virgin Australia in the domestic market, fierce competition on international routes and problems with Jetstar.
The airline will cut 5000 jobs, freeze wages, retire old planes, slash capital spending and cut some routes in a bid to cut $2 billion in costs over three years.
“The current position is unsustainable,” Qantas chief executive Alan Joyce said.
Mr Joyce said the job cuts, most of which would occur within the first 18 months, were necessary to save the airline.
“There are many Australian companies that have failed because they were not prepared to make the hard decisions, Qantas is not one of them,” he said.
He said he wants to protect as many of the 27,000 jobs remaining but could not guarantee they would all be protected indefinitely because of issues outside Qantas’ control.
The cuts triggered a feisty debate in federal parliament, as Labor said it might support a debt guarantee but ruled out backing changes to legislation to allow the airline to lift its foreign ownership above 49 per cent.
Noting it was a difficult day for Qantas workers, Prime Minister Tony Abbott was cool on a debt guarantee, telling parliament the airline was not a special case.
“Why should the government do for one what it is not prepared to do for all, or what is not necessarily available for all?” he said.
Virgin Australia boss John Borghetti said if the government gave Qantas a debt guarantee, he would seek a similar pledge “within 24 hours”.
Mr Abbott strongly argued for enabling Qantas to secure more foreign capital and take the fight up to its competitors.
“We want to ensure that Qantas is not competing against its rivals with a ball and chain around its leg,” he said.
Opposition Leader Bill Shorten said there was no excuse for the government not to step in.
“This is the worst day for aviation people since the collapse of Ansett,” he said.
Opposition transport spokesman Anthony Albanese said changing the Qantas Sale Act was a distraction for government inaction.
He said if foreign investment were an issue, the airline would already be at its 49 per cent foreign ownership limit and not the current 39 per cent.
Changing the act would have other ramifications, including thousands of jobs going offshore, rural and regional routes being dropped and the likely split of Qantas’ operations into separate domestic and international companies.
Independent senator Nick Xenophon has called for a judicial inquiry into the company’s financial mismanagement, particularly in relation to Jetstar, and called for Mr Joyce and the Qantas board to be sacked.
“The jobs that should have been lost are Alan Joyce and his board,” he said.
But Mr Joyce believes he’s the right person to take the company through the challenges it faces and has a plan to fix the business.
“Again what we are only after is a fair go for Qantas.. we don’t have a fair go at the moment,” he told ABC.
Transport Workers Union national secretary Tony Sheldon urged Treasurer Joe Hockey to meet airline executives.
“If Joe Hockey’s not prepared to do that, then it’s industrial action that the workforce should be considering,” he said.
The airline plans to shed 1,500 management and non-operational roles, as well as operational positions affected by fleet and route changes and the restructure of maintenance operations.