Thursday, 27th February 2014

QANTAS ENTITLEMENT

Qantas this morning reported a $252 million half-year loss and announced it would cut 5000 jobs as part of an overall plan to reduce costs by $2 billion over 3 years.

The results come as the government weighs up assistance measures for the struggling airline.

Here's the conundrum: Joe Hockey and colleagues have spent the last few months banging on about the end of the "age of entitlement" and stopping corporate welfare to companies (and people) that are undeserving. But here is a company that has been seriously mismanaged and is now crying poor.

Qantas already receives significant benefits from being Australia's "national flag carrier", in terms of airport/route access and public service and defence personnel travel arrangements. It has cash reserves of $3 billion and a frequent flyer program that could be sold off as an separate entity, worth $1.5-$2.5 billion.

But it needs help because some other airlines are state-subsidised? This should be beside the point, if we are to take the government's broader arguments about economic rationalism to their logical conclusion.

The argument for assistance in fact rests entirely on its sense of corporate entitlement: it's Qantas. It's just different because it's our "brand" and of national importance.

Which is perfectly reasonable, but let's not kid ourselves.

Nick Feik
Politicoz Editor

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