Australia: Public opposes big business takeover of Qantas airline

37,000 workers face threat to jobs, wages and conditions

Last March, an ACNielsen poll showed 56 per cent of people in Australia disapproved of the John Howard governments’ decision to give the green light to the proposed take over of the Australian airline, Qantas. Amongst Qantas workers the figure is closer to 100 per cent. This is mainly due to the concern people have about cuts to jobs, wages and services.

If successful, the $11 billion takeover of Qantas by a private equity fund, called Airline Partners Australia Limited (APA), would be the biggest airline takeover in the world. APA has, so far, refused to make any commitments to the workforce about wages or job security. The workers and their unions are rightfully concerned that either jobs or wages or both will be cut to cover the huge debt that will be incurred by the takeover. A large component of the proposed finance to be used to purchase Qantas is borrowed money and the company’s debt levels could double if the takeover is successful.

Senior Qantas executives are keen for the bid to go ahead, as they are set to share in a $110 million incentive scheme, with $8 million personally going to Qantas Chief Executive, Steve Dixon. The battle for APA now is to convince 90% of the shareholders to agree to the takeover. This could be a long and drawn out affair.

The government approved the takeover, based on conditions spelled out in a deed of arrangement, which covers areas such as frequent-flyer points and regional aviation services. However, the deed does not provide any concrete protections for workers.

The vagueness of the deed for the workers is more than likely because the takeover of Qantas by APA will be the first step towards the reduction of thousands of jobs. Currently, Qantas employs around 37,000 staff, of which more than 90 per cent are union members.

Despite these high levels of unionization, in recent years, Qantas staff suffered pay cuts forced upon them under pressure of threats of jobs going offshore. Qantas also started the process of cutting workers’ pay through the introduction of Australian Workplace Agreements (individual contracts). On this basis, Qantas confirmed that its full-year profit result for the 2007 year is likely to rise 30 to 40 per cent above the prior year’s figures.

According to the unions, Qantas workers experienced an average pay cut, in real terms, of more than 3 per cent in recent years. At the same time, salaries for senior management have risen by more than 40 per cent.

Re-nationalise Qantas!

So far, the unions have been lobbying to ensure that if the takeover is successful jobs will not be sent offshore. While this is important, it wrongly gives the impression to workers that this is a national issue. The union campaign focuses on keeping Qantas in Australian ownership. The idea that Australian bosses will be nicer to Australian workers is ridiculous. For years, it was Australian bosses, backed up by the federal government that forced wage cuts on these workers. These same bosses also slashed many jobs and outsourced many of their maintenance departments. Regardless of their nationality, bosses will always try to attack workers to boost profits.

The best way to ensure jobs, wages and conditions are protected is by campaigning for Qantas to be re-nationalised. The public ownership of Qantas, with workers’ control and management, should be the key demand in the unions’ campaign. Only through public ownership and workers’ control can we ensure that a key service, like a national airline, is run safely and efficiently. It is also the only way to ensure jobs are kept locally and wages and conditions are not attacked.

Putting Qantas in private hands, be it Australian or foreign, will only ensure the airline is run for profit. This will be a recipe for putting jobs, wages and services at risk.

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April 2007