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(generated from captions) 82 of every 100 Australians travel trafl on another airline. We have to recover

that. We need an Asian hub and the whole idea of the Asian

carrier is to give us access to

traffic rights that we do

have to set up a hub in

Singapore at KL to allow us to feed corporate traffic into

range of destinations. Where we provide a network where corporate traffic travels with

us to North America, yurpt, South Africa and South Africa and Australia. I

wants to travel with us but we're not competitive in aiz y with whatteer offering and we need to do something in ord to

do that. That will strengthen

every Qantas job. Amid the

existing Qantases in Asia have more repeat business existing Qantases in Asia we'll

have more repeat business on it. The existing services of

Qantas into Asia will get stronger and my belief stronger and my belief is

allows us to start growing the

Qantas brand

We'll say goodbye to

viewers on ABC 1 continue watching you viewers on ABC 1 but to

continue watching you can continue on ABC News 24. Have a good weekend.

spending. We're spending $2.8

massively investing in the billion next year. We are

our cash flow

at the moment is $1.7 billion. at the moment is $1.7

We're spending $2.5. That means We're spending $2.5. That means we're borrowing the rest. That

means that like the equivalent

of an individual having a mortgage that their income is

not covering. That's where we

are. We have a gap of over $700

million unable to pay for the We need to close it. Ewe need

to be in a position to close

that gap by turning around that gap by turning

Qantas international otherwise we won't be able to replace we won't be able to replace the

feet and then the scenario you're talking about, quuns leaving, customers leaving Qantas and going to

other airlines would occur. My

task is to turn that we have a viable and task is to turn that around so

to be able to afford the successful business and we need

replacement of the fleet and we

can't today. Before I go to can't today. Before I go

Senator Abetz I would like to just clarify something if I

Gallagher. questions from Senator may, Mr Joyce, in

Gallagher. Firstly, Senator

Gallagher, I think you said

about been booked in 20000 and

there was a number mentioned

Singapore 600, 800. And I'm

shire - sorry, I just missed

the answer. You said something

about you continually book

rooms around the world. I'm

told that we have not booked

accommodation that we would any additional hotel

accommodation that we would

normally do on periods that

occur. So we can take it on

show that's the case but there notice and come back to you and

wasn't any forward planning

booking excessive hotel rooms.

Is it normal Qantas practice to every Friday and Saturday night

in LA book 2,000 rooms? I don't

know the details of that particular, but I've been told

in relation to it that there

was no more additional rooms booked than would have been normalful. I will go back to mine, it must be common

night to book 2,000 rooms in practice for Qantas every sat

Los Angeles. You will take that

Singapore. I will go to Senator on notice and do the same for

Abetz. Senator Gallagher asked you about the briefing on the grounding of the flooed and so I can clarify this and grounding of the flooed fleet

you briefed mainly government you've spoken to you've spoken to members of all

political persuasions, I

believe. Why would you, Mr

Joyce, have been talking about believe. Why would you, Mr

grounding the fleet. What would

the reasons have been that you

would tell people that you

might have to ground the

fleet? As we made the decisions, the reason why grounded the fleet was as a

result of the lockout Clearly on the lockout? The reasons we ground the on the lockout? The reasons why

we ground the fleet, I did not

talk to people about lockout. If you the decision making for If you look out I'll go through

the decision making for the

the grounding because we were lock out and what we did with

in the position where we had

when we made the decision for

the lock out we had done some

planning on it and the planning

goes back a long while,

a decision on the planning showed that if

a decision on the lock out for

human factors reason we had to

make a decision to ground the

airline. That was the advice I

was getting from the safety

department. That was the advice

I was getting - that was

advice I was getting from the

AOC holder who is AOC holder who is responsible

for the operation of Qantas. So

when we decided to do the lockout from 8pm on Monday and

we decided once we'd made we decided once we'd made that

decision because of those human

factors issue there needed to be immediate grounding of the

airline. So the lockout

then the grounding was as a then decision was made first and

consequence of that. I'll just

go back f you had come to me

and said to me that you have to ground the airline and said to me that you might

have to ground the airline and you hadn't mentioned

do you think it would have been

fair that you should have, if you're talking about grounding

given a reason why or do you think that the politicians that think that

you did you did brief, whether they ministers, shadow ministers or you did brief, whether they be

whatever, could actually you seriously that you would ground the fleet because there's one-hour stoppages or the pilots are wearing ties? It the pilots are wearing red number of different reasons. I

wasn't just one. The commercial

damage to our operation, as I

said, was getting a lot worse,

our forward bookings had deteriorating and we collapsed, our operation was

deteriorating and we were

grounding aircraft, as you

know, Senator, each week. We had already grounded some

aircraft and that there was an

underpinning safety concern

because as I mentioned I had a

note from CASA to say that we

were keeping an eye on the

potential implications of

industrial action. So a combination of any of factors could have resulted in us grounding the us grounding the airline. At

the end of the day we grounded

the airline as a consequence of

the industrial action that took

place to allow us

take the only viable mechanism

that was available to us to get

a negotiated settlement and that's why

that's why we made a lockout decision. OK, Mr Joyce, I'll

come back. There are a number of questions because at the time I'm quite sure that on the

Saturday morning there wasn't any industrial action going any industrial action going on

and I don't think a red tie

would bring your company

down. Can I answer some of

questions you had because I've

got them coming through.

Printers and couriers, as I said we did do some planning

for a potential lockout and they had been retained for some

time but the printers were only

- the printers were only contacted

contacted on Saturday and not authorised for authorised for distribution until after 5pm announcement.

They were confirmed as a final

go at 8pm on Saturday.

relation to rooms booked, there were 2,000 rooms booked

they were booked after the announcement OK, and you announcement OK, and you can

table ings in that shows that. We can get that information to you, yes. They information to you, yes. They were printed Saturday were printed Saturday morning,

you said you printed Saturday

morning. The printing commenced

on Saturday and were not authorised for authorised for distribution until after 3pm. And the time

of the printing was authorised? 11:30 after the

board meeting. And you will

take that on notice written proof of the rooms that

had been booked in Singapore and LA. After the

and LA. After the announcement. You've got announcement. You've got the most honest face at the table, Mr Joyce, I'm not denying that you you would do anything different. You'll provide that.

It's the rest of the committee

we've got to appease. On

clarification now you said, Mr Joyce, that the decision was taken by yourself and put to

the board and endorsed Saturday

morning of the lockout, why did you continue or you continue or the company, the Qantas company

sell tickets after that? It was a mistake because it again

shows you that even with all

the planning we had done and

we'd done a lot of planning, we did - It's not a little one, - It's not a little one, Mr Joyce? I know it is. Senator, we do take it seriously. we do take it seriously. I'll

tell how we discovered we had

tell how we discovered we had a problem

problem there. We heard problem there. We heard at

about 8:00 on Saturday night that the website was still open. Honestly no-one had

thought about

by 8.30. No-one had thought

about it. I thought the

passengers were the important thing but no-one

thought to shut down your company, put 100,000 people in

turmoil and no-one thought about it? You've got to

understand our number one

priority at that point in time was the safe was the safe grounding of the

airline. I would have thought it would be your passengers. And 70,000

passengers who were being

affected. Can I say on this,

customers are a huge concern

and a had to save, from my

perspective, that you know, my

heart went out to us having to

make this decision and the

disruption it caused but I have to say to say we had 70,000 customers disrupted because of disrupted because of the action

that took place until then

we had talked of 40 hours of

disruption. That would have

caused this all ofr again by the unions. If the LAMEs had

walked off the job for 48 hours the airline would have been grounded. There would have been

a lot more customers grounded

continued for a year. I brought

to a head, Senator,ened I do apologise to all apologise to all of those

90,000 customers that 90,000 customers that were

impacted by it but we had to

bring it to a head because we were going to have so many more

hundreds of thousands hundreds of thousands of

customers impacted over the

next year and Qantas would

never have got them back and

the uncertainty was the uncertainty was creating for our customers was so great that

that we were just losing that we were just losing them. They were not going to come

back to Qantas. So we were

customer focused in our

thinking on this. It was thinking on this. It was the

best thing we could best thing we could do to keep the customers with

the customers with Qantas. Rather Qantas. Rather than take up other senators time we will

have varying difference of

opinions but I ask you to take

on ngts how many tickets were

sold, how many people were

affectled. I ask that you provide to the committee what

measures you will take to

remedy that. I've read pieces

in the paper but we'd rather

hear from you. We have been in dialogue with the ACCC dialogue with the ACCC and the

ACCC have made some suggestions

about what they want to see

from Qantas and above what we already

offered. We are going to meet

those ACCC requests and we're

going to go above and beyond that. You were only going that. You were only going to go

to midnight until the ACCC gave

you a backhander. Mr Johnson, if you had popped into the airports with that airports with that defence you

wouldn't have got too

far. Senator, can I say, it was always our intention and always our intention and when

you see on Monday when we

comment on what we're doing we're going

we're going way above to apologise to apologise to the customers

about what took place because

as I said, it was a deep regret that this happened to them and

we are doing whatever we can we are doing whatever we can to

make sure we can recover the

damage that's done to those customers, make sure nobody's

out of pocket and we will giving people

above and beyond what the ACCC

have asked for. We look forward to

to that, Mr Joyce, if you take

that on notice for me, it's not me you've got to win over. I still travel Qantas because I

believe it's been a great

airlieb line and I support the employees. Just a few up questions. Mr Joyce, you told us that forward told us that forward bookings had collapsed, is it too commercial in confidence to give us an indication as to extent of that collapse? We

can, I think. I'll get it from

Olivia. But I will give you

some indications I know off the

top of my head. For example, we

do a survey each month do a survey each month and

asking people their intentions

to fly with Qantas would they consider Qantas for the next trip and trip and usually

internationally 5% of people

will say no and that had risen to 30% of people were no longer considering Qantas for their

international trips. Sixfold

increase on it. We had on east coast coast I think Olivia will get

it for us now. We had similar

impact on the domestic market

where we see the protensity of

people not to travel with

Qantas actually doubling our

trebling as well. Most

importantly the core corporate

markets, the core corporate

market was not travelling with

Qantas on east coast and east

west uncertainty it was created.

I'll get you the exact numbers but it was quite but it was quite significant.

We come up with then a financial

financial number which was

costing us $15 million a week

for the ongoing uncertainty

around the airline. In

around the airline. In addition

to the discorruption ruption

caused for - disruption caused

for the actions taken place. I can confirm your indication that CASA had concerns because

I asked CASA some questions at

Senate estimates as to whether they woor

Qantas in relation to the industrial action. Can I ask,

however, in relation to the grounding of the fleet grounding of the fleet had grounding of the fleet had you been grounding been grounding individual

aeroplanes and part of your

fleet during the course of what

I might describe as the rolling industrial action? Yes, industrial action? Yes, we

have. As a consequence of the

industrial action by licensed

engineers we had to ground

aircraft, multiple aircraft

over a number of weeks and we were making scheduled

cancellations to services as a consequence consequence of this. So this

was already in train as we said

we had the overtime bans were

resulting in less resulting in less time being made available for us made available for us to

actually complete the work on

aircraft and that made us take the decision instead of seeing the entire fleet deteriorate

and the operation of the entire

fleet get worse like it did in 2008

2008 when we had the last licensed 2008 when we had the last

licensed engineers dispute that

we were better off taking aircraft out of operation, cancel those bringing certainty to our

passengers. Going to the Act,

or bill that we are looking at,

you indicated earlier that 38% of Qantas groups capital

investment was in Qantas

international. Is that what

this year, over the last 5

years, what's that 38%, what

period does that relate

to? That's in total, that's to? That's in total, that's the amount of capital we have today

in Qantas international and it

is continuing to be the big part of

into Qantas. Can you take on notice for us then the notice for us then the more

recent years, let's say the last five years of investment will do that Senator. Can I come back on come back on one of your

questions, we've now got the

information. So we have high

fare flexible fares which is

our corporate travel our corporate travel in the

month of October the week of month of October the week of 17

October on the east coast they

were down 40% on the previous

years. Down 40. On east west

thaes trans continental they were

were down 14% and to Canberra

they were down 20%. So we had a massive collapse of

period. Alright, so forward

bookings collapsing, I think,

on those figures would be a

fair description but can I come back to the capital investment

in Qantas international. What

percentage of your turnover or gross income is represented gross income is represented by Qantas

Qantas international? Again, I

take that on that on notice. Whilst we're taking things on taking things on notice, one of

the good things of these Senate

inquiries is you get

submissions from a whole lot of different parties that often

conflict and it is hard to know

exactly where the truth may

lie. I would invite Qantas to

have a look at have a look at the Transport Workers' Union submission and also

also the Australian licensed Aircraft Engineers Association

and just take on notice aspects to, of course, but for my

purposes on question - on page

4 of the TWU submission it says

4 of the TWU submission it says taken together it

to see how Qantas as a company

can effectively control Jet can effectively control Jet Connect JetStar plus the two

foreshadowed airlines and still comply

comply with the Qantas sale act

in spirit or otherwise. These

entities may not use the Qantas

name but Qantas will set the strategic direction and operational decisions on a day-to-day basis. What is

Qantas' response to Qantas' response to that allegation. There's a further

allegation in the very last paragraph of

paragraph of page 4, the third

last paragraph of page 5 and with the licensed engineers I

think it was - oh, and another one on page 14 of the Transport Workers' Union submission and page 10 of the page 10 of the licensed engineers. Unfortunately we won't have time to go through

all of them now but could give us written responses that would be very

that would be very helpful. My

general counsel he's general counsel he's been

involved in the Qantas sale involved in the Qantas sale act for some time. The last

this was debated and back in

2007 and he testified to the Senate committee on it. I Senate committee on it. I then have some have some questions

specifically. We'll give you

written responses, that's definite definite but just so you

understand it, the Qantas sale act was drafted primarily to effect the sale effect the sale of Qantas, effect the sale of Qantas, the privatisation of was then provisions put in to

ensure, to protect Qantas, will

continue to operate as an Australian based and Australian

designated flag carrier. At the

point in time parliament

Qantas sale act there was a

definition of Qantas which is Qantas Airways Limited and a

definition of Qantas

subsidiaries. In the act where

the Parliament wanted it to apply to Qantas and apply to Qantas and its

subsidiaries the act said says Qantas and Qantas subsidiaries.

In relation to the provision

affecteding which you are talking about the protection of Qantas the

Australian flag carrier the act

only applies to Qantas. Dit uz

not apply to Qantas subsidiary.

The intent at that point in

time was to ensure Qantas - the

Qantas airways limited was

protected but there was no nenction at that point of nenction at that point of time to to restrict Qantas from investing in sub-Sidaries. We

had a subsidiary. There was

called Australia Asia airline which which operated between

Australia and Taiwan. There was

a question raised by Senator

McGibbon who was in the time. He had confirmation from Government that there was no intention for the Act to apply to Australia Asia Airlines. So does quantity accept - Qantas does quantity accept - Qantas

accept that it applies to the

total group or would you keep the subsidiaries separate? Those separate? Those particular

provisions only apply to Qantas

Airways Limited. Just that

entity. The amendment being proposed

proposed in the bill before us, that would

no t onl - not only to the

Qantas group as a whole but individually to each subsidiary, subsidiary, is that

correct? Correct, it would make those specific those specific provisions apply

to Qantas Airways Limited, its subsidiaries and associates. So if I were to pick JetStar

Japan, that is only for

internal flights within Japan s that

that correct? And potentially some regional flights from

Japan but not in Australia. But then there would be maintenance requirements and provisions for JetStar Japan to JetStar Japan to have its servicing done in Australia? If

the act applied - If the bill

was to be enacted. What would happen is the majority of JetStar Japan's operations would have to be based in

Australia and a majority of its

maintenance would have to occur

in Australia. Right, alright. In relation to your board of directors board of directors there's a suggestion as to two qualifications or two qualifications or two directors with certain qualifications,

can I just ask, I suppose you, Mr meetings but how often meetings but how often are professional flight operations or engineering issues or engineering issues discussed

at Qantas board meetings? Very

rarely. We would have a Qantas safety committee meeting we

would get into some of the

issues but we're issues but we're well

represented by our chief pilot, our chief engineer and our head

of operations that attend of operations that attend those Qantas board safety committee

meetings for both airlines and it covers off all of the

airlines within the group. And

can I ask what other company to can I ask what other company to

your knowledge has a provision,

either legislatively or within

its articles that 100 members

with 5% of the shares could

stop Qantas or stop the company by application to a court? I

don't think any I'm aware of would have any

such restrictions. That is what

my research indicated so the next question is next question is if such a

limitation were to be placed on Qantas what would be the consequences as to your

viability capacity to compete

in what I think we can all

agree on is a very competitive market? I think we have the same view of obviously the

Department of Transport and the

Minister that these amendments would seriously risk the would seriously risk the

viability of Qantas going

forward and as Senator gal

Gallagher said about the

prospect of breaking up the

Qantas group as a negative, which

which I think was on the which I think was on the table,

which I do think would be negative and the management,

the current management absolutely believe it would be

a negative. This would force us

into doing it and that would expose Qantas, we would expose Qantas, we would lose the profitability of JetStar, we would lose we would lose the

profitability, I would lose profitability, I would lose the

ability to operate some services which means Qantas internationally we couldn't that would suffer a huge

reductions in operations reductions in operations going forward and it would put the

viability of Qantas at risk. The perverse outcome risk. The perverse outcome of this proposed legislation was rather than protecting

Australian jobs it actually

gives in what is already a tough battle tough battle with foreign

airlines flying into Australia,

it provides a leg up to our

foreign competitors and really

puts the Australian Airlines at

a massive disadvantage in

competing in what is an

intensely competitive

environment. What we've seen over the last 10 or 20 years is

a real

market share as it is and that

would exacerbate that. Rather

than JetStar being able to

compete into flying into places

like Thailand and Indonesia and compete with the Chinese carriers and the Thai carriers

and Indonesian carriers this would put an additional burden just on the just on the Australian

carriers, wouldn't put an additional birden on anyone else and tip the landscape

against Australian carriers and therefore destroy therefore destroy Australian

jobs. Can I ask, it seems like ages ago, but I think it was

only last Saturday when Wu only last Saturday when Wu -

when you were busy making phone calls noting the Opposition was

called last, and I accept that, that's the lot of an

Opposition, but if it had been indicated to you that Government would have Government would have been minded to use section 431 of

the Fair Work Act. Would the

Qantas fleet have been grounded

o - last o - last Saturday? I notice

there's been a huge amount of speculation on it and think it is very hypothetical around this. The reason why we

grounded the fleet was because

of the lockout. If the lockout wasn't occurring because wasn't occurring because there

was a call off of all

industrial action then the

fleet wouldn't have been

grounded. So I think we've made grounded. So I think we've made

that clear but I think again

everything's hypothetical. We are where we are where we are. I take full

responsibility for the

grounding of the fleet. It was

my call. There's nobody my call. There's nobody else

that's responsible for it and

there's nobody else that we'd

say should have done something

to avoid it. I take full it's the only thing I could

have done in order to bring

this to a head. There was nothing else nothing else that could have taken place. Be u you accept that the that the Government could have stopped you from implementing the lockout under the lockout under section 431? Absolutely, 431 is 431? Absolutely, 431 is very clear. 431 would have stopped

me taking the industrial action

I was taking if it was declared and that would have stopped the lockout. And in those

circumstances, because the grounding was subsequent to the

lockout if the lockout couldn't

or didn't occur then the grounding would not grounding would not have occurred? That is correct. Alright, thank

you. Can I ask you. Can I ask in relation to

the phone calls you made what

was the reaction of government

ministers? Was it cool, calm,

collected or was it somewhat

warmer, heated in fact? I think

we got reaction which was as

you'd expect from both you'd expect from both the

Governments and from the Opposition that was

professional. It was professional. It was - they were professional, courteous responses to the calls that

were made and I wouldn't have expected anything else from

ministers from Opposition members or from State Governments. So everybody were tidy? Everybody was tidy? Everybody

tidy. Right, that's reassuring

because since then there have been some been some quite untidy

statements made and so it's

just interesting to see that when they opportunity to talk face to

face they were fliet - polite,

calm and collected by the sounds

sounds of things but when had the floor of the parliament

or media to talk to they got some extra courage that clearly

they didn't have earlier they didn't have earlier on

Saturday but look, I will leave

that at that. Can I go to that at that. Can I go to your

submission on page 2. Senator It shows how little Senator Cam ron

take the interjection. I got take the interjection. I got it from the staff member. Senator Abetz. ... injected into the

public debate. If you have

questions to stay focused and ignore the interjections. I do

indeed. I shall. Page 2 of your

sub mission, third last paragraph

in the ex-plantry memorandum

that foreign contracts do not

include the same flight duty

limitations that apply

Australian crew is simply not

correct and I think that correct and I think that was

the bases of your commentary to

Senator Xenephon's questioning

but I just want to nail that

down absolutely that you stand by that statement categorically. Absolutely. Any

of the constraints that apply

certificate around human

factors of management apply to crew irrespective of where they're employ ed and where

they're based. Now that things

have cooled down a bit at other end of the table, can I

ask in relation to your phone calls to government ministers

on Saturday early afternoon did

they ask for more time to

consider their position? consider their position? Did

they say look, can you hold off

with this announcement past

5:00 so

our position? Was there any

request made that you were put

things on hold so things on hold so the

Government could consider Government could consider its

position? No, but to be fair I

did say that the timing we had - we

- we had made the decision and

that the airline had to be

grounded because of those human factors issues that factors issues that we mentioned. We did say that if potentially it did leak we

could bring it forward. We made

it very clear that that was the

time frame. discussion about changing that

time frame, nobody asked, nor

did I done what they

suggested. Nobody asked. In the event

event that you would have been asked would you have taken a request from a prime minister or a minister for transport

seriously and one that would

make you reconsider your make you reconsider your plan of action ? I think that's a

hype thet Senator Abetz. I've

defended Mr Joyce on the questions from government senators about hypotheticals. I

think it is hypothetical and I

don't know what context it

could be raised in or

could go so I'd prefer if we

didn't go in to scenarios from either side about the hypotheticals. I don't think

that's fair to either side. But

we have, but we have had

confirmation and let's nail

this one down, that the Government did not ask for

extra time? Or for you to delay

the course of action that you

had ind - indicated? Nobody

asked for any extra time and nor was it suggested by me in

fairness. We talked about the

time frame and in fact

forward if it was a leak. I was

very concerned about very concerned about the - because of the risk assessment

that was done at the human factors that's why we did it so fast and

fast and the human factors

issues we did emphasise if it did leak we could bring this

forward. They were the only

time frames discussed in the dialogue. Once again the only reason for the grounding was

the safety

the safety factor? Yes, because

we're very cautious when it

comes to safety and we did when

the A380 incident occurred now

a year ago to the day, the A380s because we were

concerned, we were concerned about the issues around

about the issues around it and

they were grounded, I think,

for 12 to 18 days. We did during

during the volcanic ash, we were the only airline, the

first airline to ground our fleet

fleet here as a consequence of

that so we're always going to

take a very cautious position

when it comes to safety. When

we were doing the planning we were doing the planning for the lockout which, as I said, had been done for

one of our people, and it was

part, as I say, the planning

for this was part of a range of

options and a range of

scenarios that we were doing.

Our head of Qantas operation s

involved his chief pilot and

his chief pilot did the risk assessment. That risk assessment said that we would

have had a problem in doing the

- keeping the airline flying