The solution to airline crisis
The February 27 collapse of the Tesna bid from millionaires Lindsay Fox
and Solomon Lew for Ansett will almost certainly mark the final end of
that airline. As a result, Australians can look forward to fare rises,
worse service and a loss in frequent flyer benefits.
Those who will suffer the most, however, will be workers in the aviation
industry.
Three thousand ex-Ansett workers will be signing on for unemployment
benefits at Centrelink in the next few months. Others queuing up as a result
of the collapse will include former workers at Ansett terminals, those
working for the now-defunct catering and cleaning companies and employees
of tour groups.
Qantas management has already announced its intention to use the final
collapse of Ansett to drive the wages and conditions of its workers down
to a “competitive level”. Virgin Blue already spends 40% less per employee
than Qantas — because of its low pay, poor conditions and minimal training.
Qantas has been involved in a pitched battle with its maintenance workers
since it announced a proposed wage freeze in October. Despite attempted
management injunctions, workers have maintained overtime bans for three
months, arguing for a 6% wage claim.
In the same month as the wage freeze was announced, CEO Geoff Dixon
described Qantas as “the healthiest airline in the world”.
The collapse of the Tesna bid took few economic analysts by surprise.
According to the February 28 Canberra Times, at an aviation press
conference in early February, nobody rated the bid's chances of getting
Ansett flying as more than 4 out of 10. No bank would finance the deal
(although Fox and Lew are certainly rich enough to do it themselves), and
Virgin Blue owner Richard Branson claims his accountants found a $100 million
black hole in the business plan.
Many suspect that the Tesna bid was an elaborately disguised attempt
to buy the lucrative leases on key airline terminals. The trigger for the
bid being dropped was the decision by Sydney Airport to refuse to only
offer the terminal leases for as long as Ansett Mark II was functioning.
The terminal buildings are the most valuable assets of the defunct company.
As the privatisation of Sydney Airport Corporation proceeds, a feeding
frenzy is likely to ensue as private operators bid to get control of the
terminals.
Domestic air traffic is notoriously unprofitable in Australia. At the
time of its collapse, Ansett was losing $1.3 million a day. Since then,
its losses have averaged nearly half a million a day. Fox and Lew proposed
to tackle this problem by asking the federal government for an extensive
tax break, and subsidy scheme. Qantas already benefits from significant
write-offs. It is unclear whether Fox and Lew were asking for better, or
equal, treatment.
Since the first collapse of Ansett, regional airlines Hazelton, Kendell
and SkyWest have limped along with heavy subsidy from state governments,
desperate not to isolate regional centres.
But public subsidies for any airline to operate at profit is madness.
It is tantamount to Australian workers handing over money to fill the pockets
of multi-millionaires in the hope of getting to pay for air travel.
This has been the end result of deregulation.
There is a better way. Air transport, like rail transport, should be
run to meet the needs of the population — not to make corporate profits.
This can only happen if Qantas is nationalised, and the assets of Ansett
added into one, publicly controlled and run company. Only then can we ensure
reasonable servicing of regional areas, high safety standards and secure
employment for airline workers.
From Green Left Weekly, March 6, 2002.
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