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Fuel pain not over: Qantas
QANTAS chief executive Geoff Dixon last night threatened to again raise airfares and cut more routes if global oil prices continued to climb, saying the airline would do whatever it took to look after shareholders.
And he said the hardline approach would extend to the airline ’s increasingly hostile battle with unions threatening to strike over pay negotiations, with Qantas refusing to budge on its 3 per cent offer.
"They have every right to strike and I respect that," Mr Dixon told The Australian. "But we have every right to try and protect our customer base and the profitability of the company, and they should respect that.
"So I say, Yeah, you can strike.
That ’s your business ’. Do they think we will just sit there and let them do this to our company?" On Wednesday, Qantas unveiled plan~ tu cumbat a $2 billion blowout in its fuel bill in the coming financial year by cutting 5 per cent of its capacity dropping flights to destinations such as Uluru, the Whitsunday Islands and Hobart and pursuing redundancies.
Last night, Mr Dixon said any further rise in the oil price, which directly affects the cost of aviation fuel, would mean "all bets are off", with the company forced to cluded claims that Qantas was using illegal strike breakers, as "1950s unionist stuff". look at raising ticket prices, closing more routes and selling parts of the business.
According to analysts at investment bank JP Morgan, fares could rise at least a further 5.5 per cent if fuel prices remain at their current near-record levels.
"At this level, we have to be very diligent on all of our costs and have to recover more from our passengers," Mr Dixon said.
"Every thing is up for grabs and everything is up for review.
Like every business, we have to look after our shareholders. I am ruling nothing out." Unions yesterday stepped up their campaign of industrial action against Qantas, accusing the airline of using the fuel increase to pad its profit margin.
The airline is attempting to keep all its unions to a 3 per cent pay increase, and is in dispute with its engineers, who want a 5 per cent rise.
About 170 engineers yesterday walked off the job in Sydney for four hours, cancelling a handful of flights, with further action in Brisbane last night and Melbourne today.
Mr Dixon said Qantas, which brought in management personnel from around the country to deal with yesterday ’s industrial action in Sydney, would not negotiate with the union during strikes.
Mr Dixon described the unions ’ campaign, which has in-"I am pretty basically supportive of the unions ... but scablabour strike-breakers? I feel like I am back in the 50s." TWU national secretary Tony Sheldon yesterday described Wednesday ’s news of capacity cuts as a trick.
"It reeks of industrial espionage," he said. "Qantas needs to be honest about what it is up to.
Their announcement seems more like an ambush designed as part of an industrial relations strategy than a genuine response to higher fuel prices." ACTU president Sharan Burrow described the Qantas statement on its planned cuts as "an astonishing tactic". She said profit growth at Qantas in the past three years had been double wages growth, with workers contributing better-than-industryaverage productivity gains.
"And of course in addition to that, notwithstanding price pressures, the airline industry is still expanding," she said.
"So you put all that together and you think why would Qantas cut its capacity, threaten jobs, all of which means it can ’t accommodate growth and, secondly, it can ’t maintain its standards?" But Mr Dixon rejected the Continued Page 6
Fuel pain not over: Qantas From Page 1 union claims. "It ’s total bullshit," he said. "We didn ’t plan the escalation of oil at this time." Mr Dixon revealed that 80 per cent of the routes cut this week were losing money and said demand had dropped off in some domestic and international leisure travel. "It ’s not pronounced yet but it could change of course because everybody is indicating in other industries that things are getting tougher in the bottom end of the market," Mr Dixon said.
The Qantas chief claimed that talk of the end of the era of cheap airfares was "a nonsense". "I do think we will work our way through this, but it depends what happens to oil," he said.
The Australian
30 May 2008
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