“Won’t somebody please think of the company?”: The failure of Morrison’s airline bailout

Tens of thousands of workers have been stood down, while the government's airline bailout disappears to the top of the company.

In early February, my father flew the last evacuation flight out of Wuhan. After a few hours in the air from Hong Kong, he spent seven hours of the night waiting in his cockpit while the evacuees underwent medical tests and boarded, before flying another seven hours to Darwin, where the evacuees were quarantined.

Upon his return, he was invited to a ceremony with QANTAS CEO Alan Joyce where Scott Morrison was to present medals to the pilots and crew of the evacuation flights. He didn’t attend.

In current discourse, the financial health of (usually large) businesses such as QANTAS, which employs 30 000 Australians, is one of the gravest concerns during economic crises. This crisis is no different. QANTAS and airlines everywhere are in enormous trouble, as the demand for their services is effectively non-existent and will continue to be so for a few months at best.

Accordingly, an amnesty on airline fees to the value of $715 million (backdated to 1 February, which guarantees at least $159 million cash to domestic airlines already) was hastily granted by the Morrison government in mid-March.

The most common justification for this public largesse to the corporate sector is the fear of job losses. If thousands rely on the corporation as their benefactor, then the loss of a corporation results in the loss of livelihoods for thousands of citizens.

Regardless of the issues with a system that thus renders employees economically dependent on the corporate behemoth, loss of livelihood is a serious issue which must be guarded against in times of crisis.

We must ask, then, how effective the company really is as a guardian of its employees, when, merely a day after receiving this financial boon from the public purse, QANTAS (followed closely by Virgin and the rest of Australia’s airlines) decided to stand down 20 000 employees (two-thirds of its workforce) without pay.

Indeed, if the government were serious about guaranteeing the livelihoods of workers, it would have directly covered their wages (or part thereof). Instead, the money has been filtered through the airlines themselves, without any guarantee or assurance that it will be used for the good of the worker. As such, at least $159 million (with up to $556 million more in the future, if the airlines use the full amount of the fee amnesty) has disappeared into the corporate world, in a bad case of trickle-down economics, never to be seen in the hands of the employees for whom it was (allegedly) intended. Indeed, given that Virgin Australia is 95% owned by foreign shareholders (the majority holdings belonging to Chinese, Singaporean, and Emirati state-owned enterprises), much of this money has effectively disappeared overseas.

At best this was a bungling waste of funds, where public money was granted to companies that have used all legal avenues to pay no tax and yet maintain healthy executive remuneration and dividends to shareholders. At worst it was collusion between members of the government and airline executives to maintain the latter’s lavish wages which, like the remuneration of most of the executive class, have increased at a rate much higher than those of other wage-earners in the last few decades. Perhaps when Deputy Prime Minister Michael McCormack said, “I’ve been speaking with Australian airline executives every day and will continue to work with them to make sure they receive the support they need,” he really did just mean the airline executives themselves. Meanwhile, union leaders such as ETU Secretary Allen Hicks, who said that “any federal monetary aid [should] go directly to those experiencing loss of work and income,” were never consulted on how best to implement the aviation relief package. Of course, no less than 55 Coalition MPs, from the Prime Minister himself to junior members such as Jason Falinski, have been granted access to Virgin’s exclusive The Club, a luxury airline lounge whose membership is hand-picked by Virgin’s CEO.                                                                

The government’s approach belies the issue with neoliberal conceptions of the company as the alma mater or ‘nourishing mother’ of its employees. Even before Milton Friedman handed down his infamous economic commandment, that the “one and only social responsibility of business… [is] to increase its profits,” the financial health of a company has been misaligned with and sometimes (as in the case of redundancies to free up cash) inversely proportional to the financial health of its employees. As such, a company will pay its workers as little as it can against the power of unionised labour, in order to maximise profits to its owners, i.e. its shareholders, while also reserving healthy bonuses for the executive class.

Consequently, 20 000 workers were abruptly cut off from the totality of their income, allegedly to save QANTAS. However, the benefit of keeping a company afloat is supposedly the retention of livelihoods, which has not occurred in this case.

Short of the government completely covering all QANTAS employees’ wages, some pay cuts proportionate to the loss in revenue is evidently needed. What must be examined, however, is who sacrifices how much and why.

In QANTAS’ case, there has been a sacrifice of the many for the sake of the few. To much glowing praise, Alan Joyce forewent the remainder of his pay for the rest of the financial year, which turned out to be just over a measly eighth of his total remuneration of $23.8m, thanks to him not including bonuses and other compensations in this humble gift. Meanwhile, employees, many of whose work is essential to the daily operation of the airline, have suffered not a pay cut of 13%, but of 100%. Indeed, QANTAS executives were so zealous in standing down their employees that the engineer based in Santiago who was to carry out the safety check on the last commercial QANTAS international flight was mistakenly stood down shortly before take-off, leading to a delay of several hours before he could be temporarily reinstated.

These are the baggage handlers and highly-skilled engineers who spend hours on tarmac that can reach up to 60º in summer, and pilots and crew who spend hours awake on long-haul flights. 50 of them have already contracted COVID-19 while continuing to work through the crisis. They are the workers who created the $1 billion which was paid to shareholders last financial year and without whom QANTAS would be nothing but the name of an airline lounge and a Woolworths rewards programme. Yet, it is their pay which is sacrificed first and sacrificed entirely.

While it is debatable how best government intervention in the airline industry might have been harnessed to the benefit of the workers (whether through renationalisation, direct payments to the workers themselves, wage subsidies, or employees taking over direction of the company as a whole), this failed bailout has exposed two faults in capitalism: that those whose labour creates the most wealth for a company are the least rewarded and that to guarantee workers’ livelihoods the company is inadequate at best, and negligent at worst

My dad usually stays awake for about 36 hours (due to changes in time zones and his insomnia – a curse of the job) each trip he does. He is slightly deaf in one ear, due to the sound of the airflow going supersonic over the hump of the cockpit for the thousands of hours he spent there before noise-cancelling headphones were mandated some twenty years ago.

As the sun rose for the last Friday of March, my Dad flew low over Sydney Harbour, taking the second last commercial flight of the 747-400 ER aeroplane home from Tokyo. A few hours later, when he arrived at his front door, he was stood down indefinitely without pay.

While he and my family will be much better off than many others who have been stood down or made redundant all over the world, he is one example of the tens of thousands of hard-working aviation workers who look out at a future without a livelihood, discarded by the very companies for whom they gave their labour and for whom they created so much profit.

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