Qantas is on track to receive $ 2 billion in government support by the end of this year, sparking criticism over the government’s failure to seek a stake in the company in return and fears that it will fail. dominates the sky once Covid-19 restrictions are lifted.
The airline raised more than $ 1.2 billion in federal government assistance last year, including specific aviation and job retention programs, more than three times the amount received by its small competitor Virgin Australia.
Virgin Australia, which came under administration last year after the government refused to bail it out, is said to have received around $ 368 million while regional airline Rex is said to have received around $ 150 million.
Figures for Virgin and Rex include aviation financing and Guardian Australia’s estimates of employee payments, which were disclosed by Qantas but not the other two companies.
The Transport Workers Union estimates that by the end of the year Qantas will have received $ 2 billion from the federal government.
Qantas is also receiving support from the state governments of New South Wales, Queensland and Victoria in the form of tax breaks and tourism funding, which were not included in Guardian Australia’s calculations.
“By any stretch of the imagination, $ 2 billion should justify a return guarantee for taxpayers,” said TWU National Secretary Michael Kaine.
“In many countries of the world, large investments in airlines include equity interests or the potential for equity interests, as we have seen in New Zealand, Germany, Korea, Hong Kong and others. “
He said polls conducted for the union by YouGov last year showed that 62% of people agreed that if the government bailed out private companies “it should insist on receiving a partial share of those companies in exchange of that money ”.
Instead, Qantas had “violated the mind of the job keeper” and outsourced the jobs of 2,500 ground workers during the pandemic, he said.
“The federal government has not put any conditions on Qantas funding. It did not set any rules on job retention, ban on outsourcing, guarantee air travel to regional Australia, cap on top management salaries, ban bonuses and ban dividends, ”Kaine said.
The Morrison government has always opposed a stake in Qantas.
“The government has no intention of nationalizing the airlines,” then Deputy Prime Minister and Transport Minister Michael McCormack said in May of last year.
“We want them to continue to be commercial operations. We want the aviation industry to come out the other way as best it can. “
Greg Bamber, a professor at Monash University’s business school whose specialties include aviation, said it would have been smarter for the Morrison government to take a stake in Qantas in exchange for the money.
“Smarter governments that have backed airlines can insist on appropriate terms, for example by prohibiting those airlines from paying far too high rewards to their shareholders and executives,” he said.
He said federal involvement could also have helped shape the post-Covid economic recovery by giving the government a voice on Qantas “by accepting huge funding from taxpayers, which has helped fund very high pay levels for Qantas CEO and executives, while outsourcing 2,000 jobs to workers who are paid less than their Qantas counterparts were paid ”.
“Because Qantas is responsible only to its shareholders, it is less attentive to its customers and its dedicated workforce – Qantas has laid off thousands of them. “
Bamber said regulations should be tightened “to tame Qantas’ fierce, short-term competitive tactics that attempt to crush small rivals Virgin Australia and Rex” on regional and established routes.
“Such unregulated competition could lead to the collapse of another airline,” he said.
“A collapse of competitors would be against the interests of the Australian community as it would allow Qantas in the medium term to become a monopoly, charging high prices and providing poor service. “
A Qantas spokesperson said the company had lost $ 16 billion in revenue since the start of the pandemic and was on track for a loss of around $ 2 billion this year – in addition to a loss from $ 2.7 billion last year.
“Qantas has 70% of the domestic market and is the only Australian airline with international flights, so it’s no surprise that we have received a significant portion of government aid to airlines,” he said. declared.
The majority of government support Qantas received was job retention, the spokesperson said, “which was a lifeline for our employees who were made redundant.”
“The rest was fee-for-service, including repatriation flights to get Australians home and vital freight services to get goods in and out of the country. This in turn generated paid work for our employees.
Qantas “has fully complied with the spirit and purpose of JobKeeper, including recognizing when jobs don’t come back and eliminating those jobs,” he said.
And he said the company had not engaged in predatory pricing on regional routes.
“With the closing of international borders, there is more demand for national and regional travel. We don’t start routes if we think they won’t be commercially viable for us.