The Abbott government requested advice from investment banks and PricewaterhouseCoopers before opting to ignore a plea for a debt guarantee, according to The Australian Financial Review.
A request for a guarantee and $3 billion loan facility was on the cards until Monday when the reports of PwC, two investment banks and Treasury were put before cabinet. It led the government to press for a repeal of section three of the Qantas Sale Act instead of offering a guarantee.
“[The reports] all basically said Qantas was in good shape, change the Act,” a source told the AFR.
However, the report added that the process and comments made since have angered Qantas, with Prime Minister Tony Abbott yesterday hinting that the Coalition was not confident in the current management team.
“Under good management, there is no reason why Qantas cannot be very profitable; there’s no reason why Qantas can’t continue to be one of the world’s great airlines,’’ he said.
The push to repeal part of the Qantas Sale Act will be taken to parliament tomorrow, but appears certain to be shot down in the Senate.
Meanwhile, the company is today expected to make the first batch of redundancies under a push to slash 5000 jobs. According to the Herald Sun, 1500 executive and support staff will be made redundant, with the focus of job cuts on its head office at Sydney Airport.
It is not the only jobs news at the national carrier, with The Australian reporting that Qantas is requesting employees cede two previously agreed wage increases as it looks to freeze wages company-wide.
The news has been met with stern resistance from unions.
“This isn’t a wage freeze, it’s actually a wage cut,” ACTU secretary Dave Oliver told The Australian. “It is Qantas trying to take away previously agreed to wage increases without a proper process of engagement to find alternative ways to secure the future of the airline.”