THIS ISN'T ABOUT VIRGIN: Senate Committee To Alan Joyce

Qantas CEO Alan Joyce. Getty Images / Sean Gallup (File)

The senate committee has launched its inquiry into Qantas’ decision to shed 5000 jobs in Sydney today.

Facing the senate, company CEO Alan Joyce said for Qantas to compete with its competitors it needs to have the same access to foreign finance, arguing the company is facing an “un-level playing field” which is threatening its future.

Referring to one of its major competitors Virgin Australia on numerous occasions throughout the sitting, Joyce was told by the senate to keep his responses relevant to Qantas saying the inquiry isn’t about Virgin.

In his opening remarks Joyce said unlike its competitors the company receives no preferential treatment from government.

“No tax concessions, no discounts on fuel, no preferred access to airports, no government-mandated travel, no assistance in raising capital or in the cost of our capital, and less favourable aircraft depreciation rates than our foreign competitors,” Joyce said.

“Even airlines without official government backing, in markets like Japan, Canada and the United States, have been able to undertake restructuring with the benefit of government sponsorship.”

Joyce has been unable to rule out if more jobs will be added to the chopping block should the amendment to the Qantas Sale Act be passed next week.

Joyce says the challenges the company is facing are:

  • Growing competition from airlines with partial or full government ownership
  • High Australian dollar
  • Record fuel bill – expected to be $4.6 billion this year
  • Carbon tax bill of $106 million last year
  • The Senate asked Joyce if he would take responsibility for the share price drop, lack of dividends paid, and profitability drop which has occurred during his tenure in the top job.

    In his response Joyce blamed the poor performance on external factors out of the company’s control and said he will take responsibility for the turnaround and hard decisions that management will be making.

    He told the Senate Committee the company is attempting to:

  • Lower its cost base, which will include job losses
  • Cut capital commitments
  • Suspend growth in non-essential areas
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