Governments through regulation and employment (Industrial Relations) regulation are now disabling the edge airlines like QANTAS used to have. Jetstar is the new offshoot of Qantas able to pay its staff less but now with new laws in the pipeline even this is becoming doomed.http://www.theaustralian.com.au/business/aviation/law-changes-threaten-qantas-may-force-sale-of-jetstar-joyce/story-e6frg95x-1226263480773QANTAS chief executive Alan Joyce has warned the airline group may consider selling its low-cost carrier Jetstar if legislation to keep maintenance in Australia and proposed restrictions on using foreign cabin crew is successful.

Mr Joyce told a Senate committee in Canberra that the amendments to the Qantas Sale Act proposed by independent Senator Nick Xenophon would apply intrusions and restrictions on Qantas Group airlines that did not apply to competitors.

Describing Senator Xenophon's legislation as “misguided”, Mr Joyce said :”We have grave fears for the future of Qantas if these legislative proposals come into effect.”

He added: “To take just one example, he wishes to require that a Qantas Group airline such as Jetstar conduct the majority of its heavy maintenance in Australia.

“Jetstar would then be confronting competitors who enjoy a lower cost base by doing virtually none of their heavy maintenance in Australia.

RECOMMENDED COVERAGE

IATA sees hope for airlines

“Those of us running Qantas would have to face a choice: allow Jetstar to fail within the confines of the Qantas Sale Act, or sell it to allow it to succeed outside it.

“That is a simple statement of the dilemma this legislation would construct. “

Mr Joyce said Senator Xenophon's proposed amendments to the Qantas Sale Act went way beyond its original aim, which was to limit majority ownership of the airline to Australian shareholders.

“It would strangle our capacity to run our business,” he said.

Mr Joyce reminded senators that Qantas was a non-government business that answered to its shareholders.

He denied changes the airline was making to its operations, including offshoring some heavy maintenance and contracting cheaper overseas cabin crew for its budget arm Jetstar, flouted the spirit or intent of the Qantas Sale Act.

Mr Joyce said the legislative changes would not increase protection for Qantas, warning they would have serious and unintended consequences for the airline.

“They would not make us more Australian.

“If Australians want a truly competitive national carrier this parliament cannot tie up Qantas in this way.

“You would responsible for making Qantas less competitive just when we most need the freedom to compete.”

Mr Joyce said the liberalisation of the aviation sector had not led to new or sustained international air services by foreign carriers to regional centres.

“The fact is that the Qantas Group network remains critical to maintaining and growing those direct services,” he said.

The Qantas boss defended paying foreign crew less than Australian crew when the two worked on the same flight.

It was standard practice adopted by airlines all over the world, he said.

“Strangling our international business and forcing us to pay uncompetitive wages ... is no way to make us stronger, better or more Australian.”

Mr Joyce said his view on the threat to the airline was not controversial and that Transport Department secretary Mike Mrdak had told the committee that Australian airlines needed continuing flexibility to adapt their business strategies to changing market circumstances.

He said Mr Mrdak has told the committee that the bills being considered by the committee raised significant issues for the operations of all Australian airlines and their ability to compete internationally.

Daniel

Big Government just doesn't know when to stop growing. Madness.While Politicians try to bash companies with stupid laws, all they are doing is helping overseas operators profit more by handicapping airlines such as QANTAS unfairly. This is corruption because it is simply targetting one airline. Talk about being unfair. What a bully.http://au.news.yahoo...hreat-to-fares/ Qantas warns of threat to faresGeoffrey Thomas Aviation Editor, The West AustralianUpdated February 7, 2012, 3:15 am

• tweet
• Email
• Print

Qantas will have higher costs and fares, be forced to sell its low-fare subsidiary Jetstar and abandon services to Darwin and Cairns if legislation proposed by independent Senator Nick Xenophon comes into law, according to the airline and a leading industry analyst.Appearing before a Senate inquiry into the Bill yesterday, Qantas chief executive Alan Joyce warned that the airline's board held grave fears for the future of Qantas if proposals that would essentially prevent Qantas from sending work offshore or using foreign flight crews came into law.Senator Xenophon's Bill aims to rein-in Qantas' overseas expansion plans."The legislation proposed would constitute a major threat to our business, to Australian jobs in the cities and regions, to investment and to growth … and would strangle our capacity to run our business," Mr Joyce said.He said the airline was under serious threat from international rivals increasing capacity on routes to Australia to take advantage of the buoyant local currency."We are seeing the Australian dollar result in over 10 per cent capacity growth by our major competition," he said."Like the manufacturing sector, our competitiveness has been hit because of the strength of the Australian dollar."Airlines from the Middle East and China had been the most aggressive in boosting capacity.Centre for Aviation executive chairman Peter Harbison said the proposed legislation and the inquiry was "a tragic waste of public money"."This is why we privatised Qantas to get it away from the control of politicians with their agendas," Mr Harbison said."If this legislation was ever to get through it would be the end of Qantas as we know it."Mr Harbison said that Qantas had a higher cost base than its competitors and the proposed legislation would make it even more uncompetitive.One of the major reasons for sending planes overseas for heavy maintenance is that the investment required to set up similar facilities in Australia for a relatively small fleet of super jumbos is prohibitive.The inquiry is continuing.

Daniel

Edited February 7, 201214 yr by IAF747

The issue I can see with this is QANTAS may end abandoning the less profitable routes to the more remote location in Australia. This could cut-off some remote communities if the airline can't service them. This is the reason why some government subsidies are necesary so as airlines can continue to service remote parts of the country.This could lead to flights from Brisbane to Cairns costing over $800 return and flights from Brisbane to Sydney still remaining well under $500. This makes it tough for people in remote areas and reduces tourism to those areas.

The issue I can see with this is QANTAS may end abandoning the less profitable routes to the more remote location in Australia. This could cut-off some remote communities if the airline can't service them. This is the reason why some government subsidies are necesary so as airlines can continue to service remote parts of the country.This could lead to flights from Brisbane to Cairns costing over $800 return and flights from Brisbane to Sydney still remaining well under $500. This makes it tough for people in remote areas and reduces tourism to those areas.

Instead of subsidies, give any operator that flies to these unprofitable locations tax breaks. No GST, no fuel tax, no tax at all. Until they become moderately/highly profitable this could be an excellent way to keep services alive. But the regulations are the killer. And Xenophon is clueless in this matter like many others.Daniel

Edited February 7, 201214 yr by IAF747

Instead of subsidies, give any operator that flies to these unprofitable locations tax breaks. No GST, no fuel tax, no tax at all. Until they become moderately/highly profitable this could be an excellent way to keep services alive. But the regulations are the killer. And Xenophon is clueless in this matter like many others.Daniel

That is true, Whatever is best to keep these routes alive, Otherwise places like Cairns would suffer. It is already pricey to go there compared to Brisbane but it is also the better destination.You will find similar challenges in Canada and Russia as these are the other two countries with large landmass like Australia. USA has Alaska which is remote but well served by Alaska Airlines. Not sure if the Alaskan Government assists Alaska Airlines to keep that one operating that far north, I notice they are based in Seattle so I doubt it. Without it Alaska would be out of reach to many.

Edited February 7, 201214 yr by ytzpilot

Qantas already charges a pretty high price for more out of the way routes (eg yppd where i live).A bit of regulation to keep maintenance and crew jobs local is not necessarly a bad thing.

Qantas already charges a pretty high price for more out of the way routes (eg yppd where i live).A bit of regulation to keep maintenance and crew jobs local is not necessarly a bad thing.

I agree! Look how many times the FAA has sited Southwest Airlines (Which outsourced it's maintenance to El Salvador) on serious maintenance issues. When it comes to safety and maintenance, I do think regulation is needed.

Qantas already charges a pretty high price for more out of the way routes (eg yppd where i live).

My old stomping ground, Port Hedland. Should have seen the place in the early 70s! Good old MMA back then. :dance:Cheers, SLuggy

Mma=mixed martial arts??

MMA - McRobertson Miller Airlines (Mickey Mouse Airlines), part of Ansett in ye olde days. Flew Viscounts and F27s IIRC, and then got all smick with F28s. Nothing like landing on a dirt strip in an F28!Cheers, SLuggy

MMA - McRobertson Miller Airlines (Mickey Mouse Airlines), part of Ansett in ye olde days. Flew Viscounts and F27s IIRC, and then got all smick with F28s. Nothing like landing on a dirt strip in an F28!Cheers, SLuggy

I photographed the F-28s years ago as they were retired in Perth. Skywest was operating them I think.Daniel

I can't remember if MMA (by then Ansett WA) had any F28s left at the end, I think they all went o/seas, lots to Indonesia. The WA airline industry was pretty incestuous by that time, with Ansett owning both East-West and Skywest, as well as Ansett WA. I think there was another one, something like TransWest that merged with Skywest before Ansett got hold of them, they only had 1 and 2 engined Cessnas I think. The F28s were replaced by crappy BAe 146s that were slower and smellier. Never liked them. Had a bunch of go-arounds (around 3 attempts before the landing) in Karratha during an approaching cyclone in a nearly empty F28, was like riding a spring.Ironically I've now worked for BAe for nearly 10 years, once I had a gutful of getting dirty for a living.Cheers, SLuggy

I could imagine a bit of mixed martial arts - if it was invented - happening at the pier hotel - if it was built - in the 1970's. The Pier is regularly claimed to have the highest mortality of any pub in Australia.As for planes, for Qantas it's the NG and 717's now. I did travel a lot of miles in the Bae146s when I first came up here. The pilots and crew I talked to didn't really love them very much.

Never been in the Bae146s. When I travel I go into HK and fly the 773s. The most comfortable aircraft ever....Daniel

Never flown to Hong Kong. Sailed in a grey war canoe there tho.Cheers, SLuggy

Edited February 7, 201214 yr by sluggy