PM must brace for possible Qantas crash

In The Australian today:

“With Qantas apparently on today’s cabinet agenda, the flying kangaroo seems beleaguered in each major area of its operations. But while Tony Abbott has taken a debt guarantee off the table, repealing the Qantas Sale Act not only faces Senate hurdles but may not be sufficient to address the airline’s problems.”

About Henry Ergas

Henry Ergas is a columnist for The Australian newspaper and the inaugural Professor of Infrastructure Economics at the SMART Infrastructure Facility at the University of Wollongong. The SMART Infrastructure Facility is a $61.8 million world-class research and training centre concerned with integrated infrastructure solutions for the future. Henry is also Senior Economic Adviser to Deloitte Australia. Prior to these concurrent roles Henry worked as a consultant economist at NECG, CRA International and Concept Economics. Henry's previous career was as an economist at the OECD in Paris, where amongst other roles he headed the Secretary-General’s Task Force on Structural Adjustment and was Counsellor for Structural Policy in the Economics Department.
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24 Responses to PM must brace for possible Qantas crash

  1. 2dogs

    Repealing the carbon taxwould pay for the costs imposed on QANTAS by its recent downgrading by Moody’s.

    No need for a debt guarantee, it just needs a level playing field.

  2. Andrew

    Just waiting for 1 CEO to have the balls to say “it’s not rocket science – a tax of $X million that no other country on earth pays – OF COURSE it’s destroying / destroyed our business.

    They all privately admit it, but then say something stupid at home that ALP uses as a gotcha quote against Abbott666. Then we hear that they “need to work with” future govts and can’t say it – never stops the “renewables” (sic) parasites from abusing A666 though.

  3. Ed

    Just waiting for 1 CEO to have the balls to say “it’s not rocket science – a tax of $X million that no other country on earth pays – OF COURSE it’s destroying / destroyed our business.

    The fact that they don’t say it speaks volumes about the calibre of Australian CEO’s.

    Then we hear that they “need to work with” future govts and can’t say it

    They’re a bunch of gutless pandhandlers.

  4. Bruce of Newcastle

    Yes, the very first thing that Abbott should do in Parliament is to challenge the Opposition to pass the carbon tax repeal legislation, which will save Qantas $106 million each year.

    Every single press release issue for the next week should say this in 20 pt font.

    Every question the Government asks in Question Time should ask Mr Shorten to do this.

    Every media spot by a Government MP should include this. If the MSM will not report it, then give them nothing else to report.

    And then if Qantas goes under everyone in Australia will know exactly who is to blame.

  5. Andrew

    Btw is that number actually true? Did QAN get the free “make sure you don’t close down during Gillard’s term” credits that Alcoa et al got?

  6. Bruce of Newcastle

    Andrew – Mr Abbott said this:

    “I am fighting to ensure that Qantas is not shackled by a $106 million carbon tax bill for one year and a $168 million carbon tax bill the next year.”

    You know what scrutiny he is under.

  7. crocodile

    The Australian government does not levy the carbon tax on international flights. Qantas raised their domestic fares by a whopping $3.50 to a max of $7.50 for the longest flights. Virgin did the same. It is set to raise $122 million this FY. The tax is a pain in the arse but on these figures doesn’t look anything like the reason for a potential demise.

  8. egg_

    Wasn’t Jetstar said to be the future model of Qantas operations, at least domestically, as all airlines were said to be headed in the budget airline direction?

  9. brc

    I bet qantas has some pretty sizable electricity bills that have doubled or worse. What about refrigerant? The planes have air conditioning – I bet recharging one of those at the new carbon-taxed rate isn’t cheap.

    Are these responsible for the airlines troubles? No. Would the airline be better off if they didn’t have to throw these particular virgins into the volcano? Yes.

  10. candy

    Bill Shorten and Christine Milne are holding the cards, unfortunately, and they would rather see Qantas fail and blame Tony Abbott as a political move.
    Nothing to do with caring about salvaging Qantas and caring about its future, it’s all self serving political moves to destabilise Tony Abbott with an unworkable parliament.

  11. Jock

    OK I will ask the question. What happens if Qantas intentionally breaches the Sale Act. I would suppose the sanctions would involve the government taking them to court. But would they?

    The Act was passed 22 years ago and in the words of an old boss: “there must be a way around that”.

  12. steve

    Off topic, but the Autralian is reporting that the fat, hairy Greek is stepping down at the end of the year……..two years too late.

  13. Walter Plinge

    I can’t see why Qantas doesn’t recover the carbon tax by passing it on to departing passengers. Annoying of course but it would be tit-for-tat for the distance-dependent carbon tax passengers get slugged when leaving Europe.

  14. Baldrick

    I think the old paddock rat needs a bullet to save it from a miserable death, and the sooner the better.

    Alternatively, leave it to the union crows and they’ll pick the eyes out of it.

  15. Bear Necessities

    Old unionised workforces have no incentive to give up their perks and redundancy packages. Like Holden, Ford, Toyota and SPC they are happy for the company to close down and leave because they receive massive payouts which are highly tax effective.

    Post June 2014, they may be able to change the QANTAS Sale Act but they won’t be able to amend the workplace agreements they have in place.

  16. H B Bear

    Bill Shorten and Christine Milne are holding the cards, unfortunately, and they would rather see Qantas fail and blame Tony Abbott as a political move.

    Surely Tits and Tubbsie should hold one of those joint news conferences that worked so well for Gillard. McSporran is obviously being missed.

  17. Outraged

    What of the unions? Will we let these groups send Qantas the way of BHP in Newcastle and the Illawarra, the car building industry and our building and shipping industries? What of the CO2 tax. Are we just goind to bend to Shorten and the ALP and allow them to rail against our will? Of course we are.

  18. Leigh Lowe

    Off topic, but the Autralian is reporting that the fat, hairy Greek is stepping down at the end of the year……..two years too late.

    It is decidedly not off-topic when talking about inefficient operators in a market pleading for and getting assistance from the governing body.
    Sydney Swans = The Car Industry. Been around forever under various guises and claims to be part of the fabric of AFL but in reality the grass-roots support is non-existent and survives on various disguised subsidies (eg “marketing and promotional allowances” paid by the AFL to high profile players)
    Gold Coast Suns = The Solar Panel Industry. Sunrise industry that the spruikers say offers so much for the future but, in truth, won’t ever survive on it’s own without subsidies.
    Brisbane Lions = The Film Industry. Constantly sucks up money, has a history of employing flashy spivs and never does any good without star imports.
    Greater Western Sydney = The Multi-Culti Industry …. The core business of this club has nothing to do with football. It is a vehicle to chisel multi-culti money out of the Gumment.

  19. hzhousewife

    Like your summary Leigh.

    Professional Sport is a Rort.

  20. DMS

    Basically only just topic, but a great found quote from James Taranto’s occasional “Fox Butterfield”-like quotes.

    “Venezuela is now the world champion of inflation, homicide, insecurity, and shortages of essential goods–from milk for children to insulin for diabetics and all kinds of indispensable products. All this despite having the greatest oil reserves in the world and a government with absolute control of all state institutions and levers of power.”–Moisés Naim, TheAtlantic.com, Feb. 25

    (end quote)
    If you can’t see that government control/involvement is part of the problem, then you’ll never see the solution.

  21. Squirrel

    “Andrew

    #1210534, posted on March 3, 2014 at 6:11 am

    Just waiting for 1 CEO to have the balls to say “it’s not rocket science – a tax of $X million that no other country on earth pays – OF COURSE it’s destroying / destroyed our business.

    They all privately admit it, but then say something stupid at home that ALP uses as a gotcha quote against Abbott666. Then we hear that they “need to work with” future govts and can’t say it – never stops the “renewables” (sic) parasites from abusing A666 though.”

    His language may not have been quite as vigorous as one would hope for, but John Borghetti has made the point:

    http://www.theaustralian.com.au/business/aviation/granting-qantas-debt-guarantee-would-deter-foreign-investors-virgin/story-e6frg95x-1226840427781#

    ….”“The best assistance the government and the opposition can provide is a removal of the carbon tax, which has cost this industry hundreds of millions of dollars,” Mr Borghetti said.”….. Interestingly, that quote was carried on the ABC, too.

    Earlier today, I believe I heard Dave Oliver argue for the Qantas debt guarantee as it would allow “high paying” Australian jobs to be maintained. The unwinding of the current incarnation of the “Australian settlement” is not going to be pretty.

  22. .

    Leigh Lowe
    #1210664, posted on March 3, 2014 at 10:57 am
    Off topic, but the Autralian is reporting that the fat, hairy Greek is stepping down at the end of the year……..two years too late.

    It is decidedly not off-topic when talking about inefficient operators in a market pleading for and getting assistance from the governing body.
    Sydney Swans = The Car Industry. Been around forever under various guises and claims to be part of the fabric of AFL but in reality the grass-roots support is non-existent and survives on various disguised subsidies (eg “marketing and promotional allowances” paid by the AFL to high profile players)
    Gold Coast Suns = The Solar Panel Industry. Sunrise industry that the spruikers say offers so much for the future but, in truth, won’t ever survive on it’s own without subsidies.
    Brisbane Lions = The Film Industry. Constantly sucks up money, has a history of employing flashy spivs and never does any good without star imports.
    Greater Western Sydney = The Multi-Culti Industry …. The core business of this club has nothing to do with football. It is a vehicle to chisel multi-culti money out of the Gumment.

    What about Fitzroy’s banner at their last game?

    Seduced by North
    Raped by Brisbane
    Fucked by the AFL

    Basically the Government rort ended up taking Fitzroy out of existence.

  23. Fisky

    They all privately admit it, but then say something stupid at home that ALP uses as a gotcha quote against Abbott666.

    Abbott must refuse to meet any CEO until they have publicly condemned the Labor Party. That is the precondition for a meeting.

  24. Large Brass Ears

    Maybe the FHG is angling for Joyce’s job.
    Either that or there’s a safe Liebor seat coming up soon.
    Socialist Gleek Plick.

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