Qantas ends Tasmanian mainline services

QANTAS had lost the right to be regarded as the country's national carrier after deciding to no longer call Tasmania home, unions and MPs say.

QANTAS had lost the right to be regarded as the country's national carrier after deciding to no longer call Tasmania home, unions and MPs claimed last night.

The troubled airline faces a backlash after yesterday telling staff it had decided to completely withdraw Qantas mainline flights from Tasmania, leaving the island to its QantasLink regional subsidiary.

Independent MP for the Hobart-based seat of Denison Andrew Wilkie said the decision - making Hobart the only capital not serviced by mainline Qantas - showed how much trouble the airline was in, but also undermined the case for taxpayer assistance.

"It does call into question their status as the national carrier - how on earth can you have the national flag carrier not servicing one of the capital cities?" Mr Wilkie told The Australian. "The fact that they are having to take such drastic steps highlights the grave difficulty the airline is in. But at the same time it makes it harder to make the case for federal assistance when you're not behaving like a national carrier."

Qantas argued it would still service Tasmania via QantasLink B717 aircraft, but Mr Wilkie said these services would be provided by a sub-contractor, Cobham Aviation.

"QantasLink is a regional airline, operating small aircraft with sub-contractors; they are not even Qantas employees," he said. "Where else in Australia are they going to pull out Qantas aircraft and replace them with QantasLink run by contractors?"

Qantas last night rejected the claim its decision to end mainline services to Tasmania meant it could no longer call itself the national carrier. "The Qantas tail will continue to fly to Tasmania with QantasLink, just as it does to many ports across Australia," a Qantas spokesman said.

Qantas, whose debt rating was downgraded to "junk bond" status by Moody's this month, argues it is hamstrung by federal legislation imposing a 49 per cent limit on foreign ownership. The company last month announced a strategic review, with the aim of cutting costs, after revealing forecast losses for the first half of the financial year. There have also been calls for the government to step in to shore-up the future of the national carrier.

The Australian Services Union said the decision to end mainline services to Hobart not only meant the loss of 35 Hobart-based Qantas jobs but - unless reversed - would also mean the airline would lose market share and the right to be known as the national carrier.

"All the ground-staff and people at the ticket desk (in Hobart) will be contractors who won't have the same service level as Qantas, so why would you bother (booking with Qantas)?" ASU assistant secretary Igor Grattan told The Australian. "How can it be the national carrier when there's one whole state where they don't even have a footing?

"I hope with enough political pressure that they will rethink it because it's not a decision that will make them any money."

He said Virgin Australia would be the big winner from the move. "(Qantas) did a similar thing on the Gold Coast and after 12 months had to start flying in again because they were losing their share of the market," Mr Grattan said. "They are giving their share of the market away to Virgin. It's a good decision for Virgin."

The union had seen the "writing on the wall" after Qantas began introducing QantasLink Dash 8 propeller aircraft to Tasmania last year, but had sought to avert a complete shift to the regional airline by suggesting cost-cutting measures. "Staff put forward a range of real cost-cutting ideas to management, but they didn't have the good grace to explore these," he said.

Qantas confirmed it was cutting its mainline services to Tasmania but insisted QantasLink B717 jets would increase the number of flights to the state, while still catering for business passengers.

A spokesman confirmed 35 jobs would go from Hobart Airport but said QantasLink would start a tender process for ground handling work, while cabin crew and pilots for the B717s would be recruited from Hobart.

"This change is about making sure we have the right aircraft on the right routes in support of leisure and business travel opportunities between Tasmania and the mainland," the spokesman said. "This decision forms part of the Qantas Group's strategy of transforming its business to remain a competitive force in Australian aviation and continue to offer the best services it can to customers."

Qantas argues that the overall number of Tasmanian jobs in its group of companies will increase with the shift to QantasLink B717 jets flying from Hobart. It also argues that the number of weekly flights will rise by 14 and that propeller planes will no longer be required. As well, it says sub-contracting is not uncommon in aviation, at least for ancillary services such as ground handling, and all work done for QantasLink meets the group's standards.

Federal Infrastructure and Regional Development Minister Warren Truss last night appeared to back Qantas, despite the Tasmanian Liberals describing the decision as "a disappointing blow".

"The government wants Qantas to be strong and internationally competitive," Mr Truss said through a spokeswoman. "The commercial decisions of Qantas are a matter for Qantas management, but job losses are always regrettable. In this instance it is important to note that Qantas has announced the establishment of a crew base in Hobart for 30 cabin crew and 15 pilots - creating 45 new jobs - and that the current ground handling services will still be required by QantasLink.

"It is not right to suggest that QantasLink services are substandard. Every day, QantasLink provides reliable, quality services to communities throughout Australia, including capital cities."

The airline also won support last night from Tourism Industry Council Tasmania, which welcomed the introduction of B717 jet services on the Sydney and Melbourne to Hobart routes.

"Today's announcement ultimately means more frequent and better scheduled services into Hobart, which is what travellers want," chief executive Luke Martin said.

"The fact the services will be run by QantasLink is not cause for concern, as the QantasLink services into Launceston and the northwest coast have proven very popular with locals and visitors alike. Indeed, most travellers will be pleased with these new services, as they will offer the full on-board Qantas experience in new modern jet planes, while their connections and booking process through the Qantas network will not alter."

Tasmania's Liberal opposition, which polls suggest will form government after the March state election, said the decision was "a disappointing blow" to local workers. "I urge Qantas to do everything they can to provide alternative employment options, including redeployment, to these workers," Opposition Leader Will Hodgman said.