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Qantas upgraded to bailout class: inside the plush pollies’ lounge

Politicians have been enjoying the largesse of Qantas for years, from membership to the exclusive Chairman’s Lounge to free flight upgrades. Business writer and director John Addis says now it’s time to pay the piper.

The frosted glass door marked “private” is easily missed by design. But a few minutes spent noting the people who pass through it quickly reveals the power of corporate Australia’s most effective influence machine.

While Qantas Club lounges are stacked with greyed-out sky warriors and hi-vis miners loading up on chips and Cascade, the Chairman’s Lounge is altogether more sedate and exclusive.

Quite sensibly, Qantas doesn’t often comment on it publicly, although chief executive Alan Joyce once described it as “probably the most exclusive club in the country”. The political gift disclosure laws, however, offer an insight into the subtle but extensive long-game strategies the airline uses to influence politicians.

The Chairman’s Lounge is invitation-only, with all new members personally approved by Qantas chairman Leigh Clifford, or so the story goes. Even on a 2013 package of $604,000, critics may feel relieved that Clifford, who along with his CEO has so neatly supervised the airline’s decline, is confined to admin duties.

There is no joining fee, the lingua franca of membership being more about influence than wealth. Specifically, the extent to which you can influence the wealth of Qantas. Given the size of their travel budgets, it’s likely Australia’s top 100 CEOs are members, along with celebrities keen to avoid the gated throngs.

All of this makes perfect commercial sense, as does having Australia’s 226 federal politicians and senior state representatives — it is thought ascension to these rarefied ranks triggers an invitation — rub shoulders with captains of industry and top public servants on Qantas premises.

Entries from the federal Parliament’s members’ interest statements frequently declare complimentary Chairman’s Lounge membership. Prime Minister Tony Abbott and his wife are members, as is Foreign Minister Julie Bishop and Treasurer Joe Hockey, although Communications Minister Malcolm Turnbull appears not to be on the list.

But where Qantas exerts real leverage is in its use of complimentary upgrades. A review of Abbot’s declaration from his time as leader of the opposition is instructive. In mid-2011, Abbott and his wife were upgraded to business class on a Qantas flight to the United Kingdom. The following year Abbott’s daughter Louise was upgraded to business, again to the UK, and his wife was twice upgraded on flights from Sydney to Auckland. Margie Abbott and two daughters were upgraded to premium economy from Sydney to Los Angeles, and Abbott himself received an upgrade from Sydney to Jakarta.

In the same year, Bishop received Qantas upgrades on return flights from Australia to Africa, Perth to Singapore and Sydney to New York. Qantas also gave Bishop an iPad in 2010 and two bottles of wine around Christmas 2012.

The airline appears scrupulously impartial in handing out these treats. Senior Labor figures like Tanya Plibersek and Opposition Leader Bill Shorten are current Chairman’s Lounge members and Labor politicians appear just as likely to get upgraded as Liberal figures.

With a Qantas business class return from Sydney to London costing about $9000, many politicians and their families are getting tens of thousands of dollars in free travel each year.

The public is right to be suspicious. In offering these favours Qantas may not explicitly expect something in return, and its activities in this regard are perfectly legal, commercial and sensible. But the activity itself creates a sense of obligation in our politicians. Whether by accident or design, that’s where the power of the strategy lies.

Abbott, Hockey and the rest of cabinet will argue they aren’t influenced by these gifts. They may say that having received complimentary upgrades from Emirates, Virgin Australia and United they don’t favour one airline over another.

They may also claim that in the period leading up to winning government and since, they’ve reduced or in some cases eliminated the number of freebies they accept. That position is supported by reports of Abbott declining a recent offer of an upgrade for him and his family, and his most recent declaration. But scientific research suggests these arguments don’t wash.

Way back in 1971 social psychologist Dennis Regan confirmed what most of us instinctively know: when someone performs a favour for us, whether we want them to or not, we feel an obligation to return it. Even if we dislike the person, the urge to reciprocate is incredibly strong. Eminent psychologist Robert Cialdini and others have since confirmed these findings.

And now, with Qantas asking for government assistance, it’s payback time. Having benefited from Qantas’ gifts worth tens of thousands of dollars, to say nothing of their frequent flyer balances, which would be worth zero if Qantas goes under, these politicians should be the last people to decide whether the taxpayer should support it.

*John Addis is a director of Private Media (publisher of Crikey) and of Intelligent Investor Share Advisor  — for help finding profitable stocks for your investment portfolio that don’t need politicians to bail them out, take out a 15-day free membership

13
  • 1
    drmick
    Posted Wednesday, 19 February 2014 at 1:45 pm | Permalink

    So; the age of entitlement is only over for some eh?

    Perhaps this is why the other 99.9% of customers Qantas abuse, feed rubbish to, ignore, are rude to, leave cold ar$ed on the tarmac in a foreign country really dont give a flying fart if they go under.

  • 2
    Arthur Moore
    Posted Wednesday, 19 February 2014 at 2:30 pm | Permalink

    No wonder the board is still employed and are exempt from the “No more Business Bailouts” by the Government”
    The age of democracy is ended in Australia we are now governed by the Media, the Miners, the Millionaires and the Money Men, no need to vote anymore guys

  • 3
    rhonaj
    Posted Wednesday, 19 February 2014 at 3:13 pm | Permalink

    Why should anyone be surprised?

  • 4
    zut alors
    Posted Wednesday, 19 February 2014 at 3:56 pm | Permalink

    Congratulations John Addis, the description of the Qantas Club lounge is a classic : ‘…stacked with greyed-out sky warriors and hi-vis miners loading up on chips and Cascade…’

    With the Chairman’s Club full to the gunwales with politicians I’m thankful not to have been invited to join.

  • 5
    Brian Williams
    Posted Wednesday, 19 February 2014 at 4:42 pm | Permalink

    While accepting John’s point that the airlines are no doubt hoping for some kind of reciprocal gift, if and when it may be needed, the actual ‘cost’ of an upgrade is a fraction of the amount he claims.

    Upgrades to Business Class are only given if there are unsold seats available in Business, or if someone else has paid for a seat in Business and is then bumped up to First to make a Business seat available. Either way, the poli and/or his family are merely taking up a seat that was going to be empty anyway, and having already paid for their ‘cattle class’ seat, the only benefit they’re getting is better meals and drinks and more leg room. As they were never going to pay for an upgrade in the first place, the real cost to the airline of these ‘extras’ is probably under $100.

  • 6
    Bill Parker
    Posted Wednesday, 19 February 2014 at 4:58 pm | Permalink

    Hey, I cannot wait to join!

    I have the A frame billboard “BUY QANTAS SHARES” ( sub-head “They’re going cheap”) nearly ready. Just jump in the ute and walk up and down St Georges Terrace with my trusty megaphone.

    Is that enough?

  • 7
    macca
    Posted Wednesday, 19 February 2014 at 5:16 pm | Permalink

    Do Virgin do something similar?

  • 8
    John Addis
    Posted Wednesday, 19 February 2014 at 6:13 pm | Permalink

    @ Brian Williams. That’s completely correct. But my point was about the obligation it creates in our politicians, not the absolute, and in this case negligible cost, to the company that delivers it.

    @ Macca. Yes. Current Virgin CEO ran the Chairman’s Lounge for QF when he was there and is now building ‘The Club’ invitation-only lounges for his new gig. Politicians are also getting free membership to it.

  • 9
    Liamj
    Posted Wednesday, 19 February 2014 at 10:34 pm | Permalink

    Really we should thank Qantas, isolating the aristocrats from the peasants keeps the State blind and brings the guillotine that much closer.

  • 10
    MJPC
    Posted Thursday, 20 February 2014 at 7:20 am | Permalink

    Liamj, I agree. Any society is only 3 Chairman lounge political invitations from a revolution.

  • 11
    drmick
    Posted Thursday, 20 February 2014 at 7:51 am | Permalink

    The other beauty of the system is that if ever the military embraces the use of drones, the “quaintarse livery” on a drone with a homing device set for the various chairmans lounges will have the added stealth advantage of not being seen through the frosted glass, nor be insulted at not being invited to enter. Solidarity bruvvers

  • 12
    macca
    Posted Thursday, 20 February 2014 at 8:40 am | Permalink

    Pardon me. Chairmans Club members are to vote on giving the airline a bail out? No, I’m not cynical …

  • 13
    Honest Johnny
    Posted Thursday, 20 February 2014 at 1:59 pm | Permalink

    Democratic politics was never meant to spawn members to the “most exclusive club in the country”. They are our representatives, elected by us and should therefore be prepared to mix with us and be one of us. If they want to avoid being approached or solicited by a member of the public while they are travelling, they are in the wrong job. Perhaps Crikey should do a head count of who among our representatives have opted in and who has opted out.

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