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Monday, 29 August 1994
Page: 482

Senator COLLINS (Minister for Primary Industries and Energy) (3.31 p.m.) —Mr Deputy President, as Senator Spindler requested, I have waited in the chamber to hear his concerns on this matter. I make the point that the awarding of maintenance contracts is clearly a commercial matter for the management of Qantas. However, I would be interested in reading to the Senate a statement on this matter issued by James Strong, the managing director of Qantas, on 22 August 1994. Mr Strong said:

We have a definite bias in favour of Australian companies when it comes to purchasing goods and services. However we insist that bids are competitive. Qantas cannot carry extra costs as a penalty for firms that are not able to be competitive.

  We have briefed ASTAAS, the relevant unions and the ACTU on why heavy maintenance work on our four Airbus 300 aircraft was awarded to British Aerospace.

  ASTAAS were uncompetitive on costs and almost every other aspect including experience and capability.

  They would have had to lease heavy jacking equipment from overseas. They would have had to bring in engineering expertise from Qantas and from overseas sources. Their turnaround time on the four aircraft exceeded that of British Aerospace by about three months. This would have meant very significant revenue loss to Qantas. We use the A300s on high density domestic routes such as Sydney/Melbourne and we cannot afford to have them out of the operational fleet for one day longer than necessary, let alone for many weeks.

  Our Engineering staff were advised by ASTAAS earlier this year of a minor improvement in turnaround for their bid. Unfortunately they were unable to improve the terms sufficiently to be considered for the contract on the A300s.

I have read that statement in response because I am not sure whether Senator Spindler has seen it. It comprises very specific assertions that have been made by Qantas, indicating not only that the bid from ASTAAS was uncompetitive in price but also—I imagine this would be a matter of grave concern to an airline company—it would have had the aircraft out of the air for three months longer than the overseas bid. Considering the degree to which a company needs to utilise an aircraft to recover capital cost, let alone to make a profit, I imagine that must have been of very great concern to Qantas.

  Having said that, I will ensure that the specific issues that Senator Spindler has raised in the debate this afternoon are drawn to the attention of the Minister for Transport, Mr Brereton. Any response that he makes I will draw to the attention of the Senate.

  Question resolved in the affirmative.