The Guardian April 16, 2003

Qantas uses economic conditions to sack workers

Last week Qantas management announced that it was going to sack 1700 of 
its workforce. This comes on top of recent reductions equivalent to 3500 
full-time positions. The company pleaded financial problems, pointing to 
the downturn in the industry since the start of the war and the impact of 
the SARS virus in Asia.

The Australian Services Union (ASU) described the company's actions as 
short-sighted, with the company acting in undue haste.

For some time now the company has been using the depressed economic 
conditions in the aviation industry to argue against wage rises and defend 
attacks on the working conditions of its staff.

Yet Qantas made a profit of $350 million last year, some of which could 
surely be used to maintain jobs and services during the downturn.

Assistant National Secretary Linda White said that Qantas had not informed 
ASU members who was being sacked or when the sackings would occur.

Ms White said the union expected to be holding series of meetings over the 
coming weeks and would be demanding that Qantas abide by its enterprise 
bargaining agreement provisions.

Under the existing agreements, there are a number of steps that must be 
exhausted before redundancies can be made. These include:

1. Redeployment and/or job swapping where there is a reasonable skill and 
location match.

2. Employees taking extended leave and exhausting accumulated leave.

3. Employees taking periods of unpaid leave.

4. Full time employees converting to part time.

5. Full time employees converting to jobshare.

6. A process of expressions of interest in which are suitable number of 
volunteers may be found.

The day after Qantas announced the job cuts, the Australian Competition and 
Consumer Commission (ACCC) and equivalent body in New Zealand issued a 
draft ruling rejecting its proposals for a $550 million investment in Air 
New Zealand.

Qantas management has expressed outrage at the draft ruling that a proposed 
alliance between Qantas and Air New Zealand is not in the public interest 
and should not proceed.

Under the alliance, Qantas would gain a 22.5 percent stake in Air New 
Zealand and the airlines would agree on flight schedules and fares on 
common routes.

This agreement would particularly affect passengers travelling between 
Australia and New Zealand. The Trans-Tasman route, which accounts for 16 
percent of all travel to and from Australia and is the biggest sector of 
the national air passenger market.

It is a crucial transport link for both countries.

The agreement would mean that Qantas would dominate the route and could set 
exorbitantly high (monopoly priced) fares.

The ACCC warned that it would also jeopardise competition on the vital 
Australia/North America route, on which Air New Zealand no longer operates.

At the moment the two other carriers on this route are United Airlines and 
Air Canada, both of which are in financial difficulties.

ACCC Chairman Professor Allen Fels commented: "If the proposed alliance 
goes ahead they will jointly control more than 90 percent of the (trans-
Tasman) market. The market would move from a two-airlines market to an 
effective one-airline market.

"Passengers will be denied choice and increased air fares will be 
inevitable. Even if Virgin Blue enters, the alliance would still dominate 
the market. .

"The Alliance would deter Air New Zealand from re-entering the 
(Australia/North America) route and providing critical competition to 
Qantas if either of the other operators . falters, as is currently 

In this situation Qantas would also be left as virtually the sole operator 
on this route.

"In Australia, the proposed alliance would see Qantas domestic operations 
capture those passengers flying internationally with Air New Zealand. .. 
The alliance would shrink the portion of the domestic market available to 
other carriers and constrain them from entering or expanding that market", 
Mr Fels said.

It is clear that as long as Qantas' main purpose is to make profits for 
shareholders, it cannot ride-out the lows without causing pain and hardship 
to its workforce.

There is only one way of overcoming that  that is by returning the 
national carrier returned to public ownership and control.

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