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Crikey Says

Feb 13, 2014

Crikey says: Joyce wants reward for bad management

Unemployment is up, but beware the wage war. Qantas goes begging to Canberra -- but is Alan Joyce on the run? Closing the gap: why indigenous prison rates matter. It's been a bad year for press freedom (blame the rich). Telstra's new take on broadband -- and separation. And behind the TV mini-series: life on the road with INXS.


Qantas has clearly taken the hint from the government’s hard line on automotive assistance and SPC Ardmona. It’s flagged (yet another) major round of job cuts while its executives and lobbyists stalk the corridors of Canberra hoping to convince the government to lend a hand to the ailing airline.

The Qantas Sale Act, a relic of the Paul Keating era when the process of privatising the airline was commenced, must be changed to allow greater foreign investment in Qantas, which is currently restricted in the means by which it can raise capital. That the result might be that Qantas ends up foreign owned is not relevant: the Foreign Investment Review Board provides a process by which that can be assessed as to whether it is in the national interest. At the moment, the Qantas Sale Act in effect prejudges the issue, assuming anything beyond the current foreign investment and shareholding limits is not in the national interest.

But Qantas’s problems go far beyond its ability to source capital. The airline has been appallingly managed, not least in the apparently systematic trashing of what was once a truly iconic brand for Australians, and in CEO Alan Joyce’s reputation as an industrial relations-obsessed ideologue rather than a competent CEO who has struggled to deal with the basic challenge of an aggressive domestic competitor — something most business managers across the country have to deal with every day they go to work.

Joyce may well be able to meet the government’s new criterion for industry assistance: a willingness to slash jobs and screw down wages and conditions. But he doesn’t appear able to address the more fundamental problem that, under current management, Qantas’s core problems won’t be addressed.

Any government assistance beyond fixing the Qantas Sale Act would be a reward for bad management and not an investment in an airline’s future.


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