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Qantas boss Alan Joyce has warned Scott Morrison not to nationalise Virgin Australia despite the coronavirus crisis threatening its business.
Speaking to Sky News on Friday morning, Joyce said, “It would be completely unfair to our sector. We’d be competing against the Australian government. Qantas couldn’t do that, it would be an unbalanced, uncompetitive environment.”
On Thursday, Qantas made the unprecedented decision to “stand down” two-thirds of its workforce to survive a series of international travel bans. And with Virgin Australia’s share price now significantly below 10 cents, Sky News asked the Qantas Group chief executive his views on a government buyout for its biggest rival.
Joyce said, “The government can’t pick winners and losers, the government has to be fair to every company. Whatever aid it’s giving to one company it must give to everyone in the sector.
“This is worse than the GFC. This will be quite a large recession and the government has to be careful with how they spend money.”
He added that the nation shouldn’t choose to look after “badly managed companies” in an apparent dig at Virgin Australia.
Early on Thursday, Qantas said it would suspend two-thirds of its 30,000 employees until “at least” the end of May.
During what the business is terming a “stand down”, employees will be able to:
- Drawdown annual and long-service leave;
- Take leave at half pay;
- Have early access to long-service leave;
- If their leave balances are low, they can have access to four weeks leave in advance of accruing it; and
- Access ‘additional support mechanisms’.
Virgin Australia has yet to announce similar plans, though it has said it will cancel 90 per cent of its international flights from 30 March to 14 June, and reduce domestic capacity by 50 per cent for the same time period.
The cuts, which include Virgin and Tigerair, amount to the equivalent of grounding 53 aircraft.
Virgin Australia chief executive Paul Scurrah said earlier, “We have responded by making tough decisions, which include reducing our domestic capacity and phasing in the temporary suspension of international flying for a period of two and a half months.”
Scott
says:Joyce fails to forget the government assistance he asked for 5 years ago to save Qantas.
I notice Australian Aviation only reports on Qantas too. They should put this magazine on board the QF aircraft as their inflight magazine.
Richard
says:It’s just a matter of time, Virgin are paralyzed with indecision as they don’t have any real options. When your rival who is 10 times or more your size, cuts 100% of its international flights, why are they hesitating, similar with only cutting there domestic flights by 50% when there rival cut deeper.
They are doomed, sadly.
Anthony
says:Theres a time and a place. Classy.
Andrea Shearer
says:What a disappointing “corporate greed mentality” statement by Alan Joyce. This country built it’s reputation on fair play and competition within various industries. We need both Qantas and Virgin in our skies for our tourism to be sustainable . He is not running the country, so his comments about what action Scott Morrison should implement are not how we as a nation operate.
Shane McKenny
says:I couldn’t agree more with Alana Joyce, the people I’ve spoken to seem to believe we should be building up Qantas as our national airline as it’s majority Australian owned. Many people mistakenly believe Virgin (Australia) is Australian owned, because its name says so, but most educated people reading your publication would know it’s not. Virgin is their >90%, foreign-owned competitor.
Etihad Airways owns 21 per cent of Virgin, along with Singapore Airlines (20 per cent), Chinese conglomerates Nanshan (19.9 per cent) and HNA Group (19.8 per cent), and Richard Branson’s Virgin Group (10 per cent) – give or take 1%. Doesn’t leave much room for the Australian owned component, hey?
Around 40% of that ownership matrix is Chinese, which as we understand is the very country of origin of the virus causing these worldwide issues. If anyone is going to bail Virgin out it should logically be their majority owners or their associated countries. Australian’s should be properly appraised and should not have to foot the bill, more than ever our money should be spent and kept in the country.
As for job losses, if Virgin failed, Qantas would again logically need to scale up as demand increases. On the topic of future demand, that quantum (demand) would remain the same whether there were one or two carriers, and one would imagine that Qantas would seek to employ ex-Virgin employees. That’s one perspective and it would be interesting to hear others, supported by facts and figures.
Brian Richard Allen
says:Well said! The business/traffic/customer base will be whatever it will be — and regardless of whose name is on the aeroplane. But Virgin’s foreign owners took a brash business model that worked well, for all and ponced up its cabins in its effort to play in the majors. (Domestically, make that major, singular)
If it has failed? Sad and too bad — and regardless of the CCP’s Wuhan Flu — entirely the business of those foreign owners. And, on the upside, who knows what great opportunities might its failure offer startups? And We, The Passengers
Ian Harwood
says:I think the real issue here is much more significant than who owns Virgin.
I am an employee of Virgin Australia. Along with the many thousands of my colleagues, we are all Australian and are determined to see our Company prosper.
We all contribute to the community through our work and taxes.
I have an obligation to provide for my family.
All that stops if we lose our jobs.
Harry
says:Any assistance given to the airlines or other large businesses should only be in exchange for equity so that taxpayers eventually get their money back rather than shareholders benefitting
Richard H
says:No problem. Bail both Virgin & QANTAS and let the tax payers take a stake in both airlines. Sell the shares back post-recovery. If the taxpayer is helping them on the downside,why shouldn’t they get something on the upside too?
Tom
says:Yeah stuff the 20,000 workers hey Allan!!
Scott
says:Alan Joyce fails to forget the handouts requested by him some 5 years ago.
Stewart Lowe
says:Well, I guess that this is an “opportunity” for QANTAS to do heavy maintenance in their fleet. I mean this seriously. In a way it’s a kind of fight back. Carry on as normally as possible.
AgentGerko
says:I seem to recall QF insisting on being privatised because they couldn’t compete fairly with other airlines whilst owned by the government. Now Mr Joyce is saying the reverse about Virgin.
Max
says:What a creep, Qantas wouldn’t even be in existence if it wasn’t for government support. How low can a person go, using a global crisis for his own company’s posturing. This is a serious national crisis, where we all need to support each other the bast we can, the crisis should not be used as a game of chess to attempt to knock off a rival.
Peter Ritty
says:Then they can continue losing at tax payers expense, even more than now. Are you insane Morrison???
William GOODE
says:Again rationalise sector, been about jobs rather than carbon reduction for far too long, what ever level of emissions reduction we can get down to Globally we should endeavour to maintain, through efficiency enhancements in integrated travel rather than “competition”, which plainly hasn’t worked, as there is no tax and Fossil Fuels are priced too low !
Jason
says:As some have previously mentioned,Qantas has received a great deal of assistance over the decades. AJ people remember things mate and it’s not your place to be telling the PM how to do things. Air Lingus performedso well whilst you ran it didn’t it ? NOT.
Gary
says:Joyce and the corporate juggernaut that is Qantas, drunk on its own bathwater….. what a despicable thing to play off Qantas and Virgin. The only way Qantas will be reasonable is a strong competitor…… this is the reason I dont ever …and will never….fly Qantas
Aubrey
says:Alan Joyce channelling Reg Ansett
Peter
says:Very short memory Joyce and not an ounce of Aussie spirit or mateship. You just stand down 20000 so the government can look after them. Disgraceful behaviour.
Scott
says:Simple – spend the money re-nationalising Qantas and Virgin. Sack Joice, wait until COVID-19 is over and force the company to split in two, to recreate the competition. That way taxpayer money is spent more effectively by governement during the crisis and hands it back to the market when conditions become normalised in a year or two.
James
says:I believe a confident and competent PM would realise airlines like Virgin Australia did not offer refunds to the tons of Australians, whom flights were impacted. If Virgin goes, so will the credits that substitute the refunds. If those individuals lose credit/money, it’s very likely the person who shirt fronted responsibility and failed to acknowledge the impact, will have more than failed optics to manage at the behest of the political party they represent.