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Issue #1922      July 6, 2020

Nationalise Qantas!

The job losses continued to mount with Qantas announcing the immediate sacking of 6,000 workers on 25th June. It did, however, say that it would continue with the stand-downs of another 15,000 workers and that their leave would continue to accumulate. The future of these 15,000 workers is uncertain with JobKeeper due to wind up at the end of September.

In all more than two-thirds of its 29,000 workforce are either stood down or unemployed. Many of them may never regain employment with Qantas or in the aviation industry.

Unions representing Qantas workers reacted angrily, demanding the company wait until it knew what the government was planning in relation to JobKeeper and possible assistance to the industry.

“The federal government must urgently act to implement an AviationKeeper payment system to support the industry for as long as it needs,” the Transport Workers’ Union (TWU) demanded.

“Instead of cutting workers’ jobs and continuing stand-downs, Alan Joyce should redouble efforts to secure urgent government intervention,” Australian Council of Trade Unions president Michele O’Neil said.

Aviation workers are pushing for specific support from the Australian government. “As one united industry, we’re fighting for an AviationKeeper,” the TWU said. They are also, importantly calling “for a national plan to ensure the long-term stability of the industry and fairness for thousands of workers.”

Meaner leaner

The company has a three-year plan for when flights can resume. This is centred around becoming “a much smaller airline.” Qantas CEO Alan Joyce spoke in terms of a “meaner leaner” airline.

One hundred aircraft will be grounded for up to twelve months or longer. Its A380s will be grounded and put into storage in the US for three years. It will also retire its six remaining Boeing 747 planes immediately, six months ahead of schedule. It is raising capital of around $1.9 billion to tide it over, including funding the 6,000 redundancies.

Qantas has indicated that half of the stood-down workforce will not be back at work until international flights resume. While CEO Alan Joyce optimistically suggests that this might be as early as July 2021, it is more likely they will remain in that position for some years to come. A great deal depends on when a vaccine is found and produced in adequate quantities.

Demand will take time to build when the skies are opened up again, and there will be fewer planes in operation. The “leaner and meaner” airline will be out to cut costs by every means possible. The remaining workforce and their unions will be in a far weaker bargaining position with a large experienced reserve labour force eager to get back into the industry. They can expect an all-out assault on wages and working conditions, reduced staffing levels, etc. There are also risks that short-cuts could be taken in maintenance and other safety provisions.

Highly profitable

Qantas is one of the most profitable airlines in the world.

Last year, the company made a before tax profit of $1.3 billion and a return of 18.4 per cent on invested capital which is good by any capitalist standard. These figures include the operations from its budget subsidiary, Jetstar. It was wallowing in cash to the extent it returned to shareholders $1 billion in the form of dividends and share buy-backs.

Qantas has made billions of dollars in profits over recent years. All of these profits could and should have been flowing into government coffers, not lining the pockets of senior executives and private shareholders.

Yes, it has taken a hit from COVID-19, but Joyce has repeatedly said it was in a strong position to ride it out. The company is able to raise capital to tide it over. Joyce has not taken the begging bowl to government as Virgin has done. It was in Qantas’ interests to see its main competitor Virgin go under.

Virgin carried huge debt, accumulated when attempting to compete with Qantas at the higher end of the market, leaving it unprepared for such a crisis. This left it extremely vulnerable, with the airline eventually going into voluntary administration last month. It had already sacked thousands of its employees, and many more are expected to lose their jobs as new owners, Bain Capital, take over the company.

Bain Capital has a bad reputation for ruthless downsizing and attacks on wages and working conditions. The multinational corporation was set up in 1984 and now claims to have US$100 billion of assets under management. Its takeover of Virgin might have saved Virgin, but at what cost to the staff and their trade unions.

Background to Qantas

The company was founded in Queensland in 1920 as the Queensland and Northern Territory Aerial Services, its present-day name an acronym of the original. Once a privately owned company, it was nationalised by the Chifley Labor government in 1947.

The Keating Labor government began the privatisation of Qantas in 1993, with the Howard government transferring the final tranche to private ownership in 1997. This not only denied the government an important source of regular income, but meant that today Australia’s national carrier is privately owned.

Qantas, as we have seen during the pandemic, played a key role in bringing stranded Australians back from around the world.

It should be nationalised.

Guardian readers can support the aviation workers’ campaign for a national plan for the industry by signing the petition on the TWU webpage – twu.com.au.

Next article – Report: World Beyond War webinar, 20th June 2020

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