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First Qantas jobs to go today

First of 5000 Qantas workers set to lose their jobs receive notice today, with the majority of job losses to take place in the airline's Sydney headquarters. Nine News.

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Adele Ferguson: Impasse turns spotlight back on Qantas bosses

Matt O'Sullivan: Shifting jobs to be a big benefit to Qantas

Tony Abbott is right, offering Qantas a government loan guarantee is difficult to justify.

"True firendship demands honest": Qantas chief Alan Joyce (front), with David Epstein in 2008.

"True friendship demands honesty": Qantas chief Alan Joyce (front), with David Epstein in 2008. Photo: Rob Homer

As a former Qantas executive who's valued a friendship with Alan Joyce, it's been difficult to watch the company take the path it has. True friendship, however, demands honesty and sometimes tough things need to be said. Qantas needs to end self-referential special pleading.

Much of what Qantas has lobbied for is inequitable, short-sighted and irresponsible: commercially, economically and, most likely, fiscally. It has no place in a well-governed, democratic and functional market economy. That said, the Qantas Sale Act should go, though it's not crucial to Qantas's issues, and the ALP should not stand in the way.

The ALP should remember the prospective constraints the Act imposes on a company playing in an international services market. Remember is the operative word. The ALP had amendments to deal with this ready to legislate in 2009. It cannot claim consistency is on its side.

It's puzzling when a party claiming to be progressive wants to compound out-dated interventionism with a market distorting loan guarantee specific to Qantas. This is a step down the Argentine road.

Apparently Qantas needs a loan guarantee because it is at risk of catastrophic commercial failure, allegedly caused, in significant part, by its inability to secure repeal of the Qantas Sale Act.

If true, this is actually a good reason for a government to refuse Qantas a loan guarantee.

A loan guarantee is not an assured risk; taxpayers would face a real prospect of being on the hook for billions if Qantas were as vulnerable as some have us believe. That is not in the national interest.

The Sale Act is one of a number of "big problems" bandied about in the Qantas debate, many of them red herrings and few connected by a logical thread. Qantas is to blame for much of this, as it has often led the discussion with sentiment and spectacle rather than substance.

Not essential

Anyone who believes Qantas is the victim of a concerted conspiracy of three foreign governments should be ready for a call from someone selling the Sydney Harbour Bridge. Singapore and the Emirate states are in intense competition to be global aviation hubs, while Wellington was selling down Air New Zealand shares on the day Qantas launched its latest political crusade. All encourage Qantas traffic or investment.

Qantas is not essential to the integrity of the national financial system and the 1989 pilots' strike showed the nation wouldn't grind to a halt if a major airline restructures. Nor is it true Qantas has unique "national carrier" obligations to provide airlift capacity in times of need. Qantas has made great contributions in the past, but its status is no different to that of Virgin Australia. Government often uses more readily available charters and the RAAF now has unrivalled heavy lift capacity in C-17 aircraft. Watching the Qantas campaign, one is reminded of Paul Keating's one-liner about the Catherine Wheels of public debate, "(they) . . . go off and they'd take off, spreadeagle the kids, burn the dog, run up a tree and then fizzle out going around in circles".

Qantas's tactics have alienated most of its important stakeholder groups in crucial ways over the past three years: investors, passengers and the government. The noisy debate has left a Prime Minister unimpressed and the share price has dropped below a dollar twice.

The much-heralded Derby Day grounding saw Qantas's Reputation Index rating plummet 49 places among 60 Australian brands in 2011, but led to minimal change in industrial relations practices. To draw on Qantas's latest advertising tag line: "It's about, what?"

One can only imagine how Aviation Minister Warren Truss felt reading about correspondence to him on the front page of a newspaper before he had a chance to digest it in the privacy of his office.

Fuelling a public debate about corporate welfare is an odd ploy for anyone looking for friends in Canberra when a new government was grappling with GrainCorp, the car industry and SPC Ardmona. Reinforcing it with front page leaks and a website borrowed from California community politics is odder still.

Governments don't like special interest monstering at the best of times, but it's even worse when they can't be sure of what you're really asking for other than to hamstring competitors by any means fair or foul.

David Epstein is a former Qantas group executive and federal government ministerial adviser. These are his personal views.

This piece first appeared in The Australian Financial Review