In March an ACNielsen poll showed that 56 per cent of people disapproved of the Howard governments’ decision to give the green light to the proposed take over of Australia 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 chief executive Steve Dixon. The battle for APA now is to convince 90 per cent of the shareholders to agree to the takeover. This could be a long and drawn out affair.
The government has 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 the 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 unionisation, in recent years Qantas staff have had pay cuts forced upon them under pressure of threats of jobs going offshore. Qantas has also started the process of cutting workers’ pay through the introduction of Australian Workplace Agreements (individual contracts). On this basis Qantas has 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 themselves Qantas workers have 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.
So far the unions have been lobbying to ensure that if the takeover is successful jobs will not be sent offshore. Whilst 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 as it has been Australian bosses backed up by the federal government pushing wage cuts on these workers for years.
These same bosses have also slashed many jobs and outsourced many of their maintenance departments. The point is that regardless of their nationality bosses will always try to screw workers in order 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 that 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.