Qantas boss Alan Joyce has delivered a blunt message to a Senate inquiry about proposed changes to laws regarding the airline's sale.
Independent senator Nick Xenophon has introduced draft laws that require Qantas to maintain its principal operation centre in Australia as well as the majority of its heavy maintenance of aircraft, flight operations and training.
Mr Joyce delivered a blunt message to senators when he appeared for the fourth time before an upper house inquiry hearing in Canberra on Monday: 'We must adapt or die.'
He described Senator Xenophon's legislation as 'misguided'.
'We have grave fears for the future of Qantas if these legislative proposals come into effect,' he said.
The legislation would constitute 'a major threat' to the airline's business, Australian jobs and to investment and growth.
Mr Joyce said Senator Xenophon's proposed amendments to the Qantas Sale Act went way beyond its original aim which was to limit majority ownership of the airline to Australian shareholders.
'It would strangle our capacity to run our business,' he said.
Mr Joyce reminded senators that Qantas was a non-government business that answered to its shareholders.
He denied changes the airline was making to its operations, including offshoring some heavy maintenance and contracting cheaper overseas cabin crew for its budget arm Jetstar, flouted the spirit or intent of the Qantas Sale Act.
Mr Joyce said the legislative changes would not increase protection for Qantas, warning they would have serious and unintended consequences for the airline.
'They would not make us more Australian.'
Senators were told Jetstar would face competitors who were enjoying a lower cost base overseas and were not restricted by government-imposed limitations.
Qantas was faced with prospect that Jetstar could fail within the confines of the Qantas Sale Act or it could be sold to allow it to succeed outside the law, Mr Joyce said.
'If Australians want a truly competitive national carrier this parliament cannot tie up Qantas in this way.
'You would responsible for making Qantas less competitive just when we most need the freedom to compete.'
Mr Joyce quoted the head of the federal transport department, Mike Mrdak, to back the airline's argument against the legislative changes.
Mr Mrdak had said the draft laws raised significant issues for the operations of all Australian airlines and their ability to compete internationally.
Mr Joyce said the liberalisation of the aviation sector had not led to new or sustained international air services by foreign carriers to regional centres.
'The fact is that the Qantas Group network remains critical to maintaining and growing those direct services,' he said.
The Qantas boss defended paying foreign crew less than Australian crew when the two worked on the same flight.
It was standard practice adopted by airlines all over the world, he said.
'Strangling our international business and forcing us to pay uncompetitive wages ... is no way to make us stronger, better or more Australian.'
Mr Joyce told senators they needed to be aware of global and national realities.
'We confront very serious global economic challenges in Europe and the United States,' he said, citing warnings by the International Monetary Fund and the World Bank.
'We must adapt if we are to survive.'
Mr Joyce said the company was merely pointing out the advantages its overseas-based competitors had rather than asking for government assistance.
'We're not asking for a free kick, we're not asking for a free handout,' he told the committee.
'What we're asking for is the ability to be able to manage our business and to change and make sure it's flexible to be able to adapt with that environment.'
For instance, he believed a current review of heavy maintenance could identify efficiencies without compromising the carrier's safety record.
With safety increasing for airlines across the world, Mr Joyce said passengers were no longer willing to pay a premium for Qantas flights because of its safety record.
Jetstar chief executive Bruce Buchanan said the most substantial part of Qantas' capital investment was going into upgrading its ageing fleet, not into operations in Asia.
Mr Joyce said the airline's exposure to three different carbon pricing schemes - in Australia, New Zealand and Europe - would also put upward pressure on costs.
Last week, Qantas announced fuel surcharge increases on domestic ticket flights of between $1.80 and $6.80.
These will apply to bookings from February 15 for flights from July 1, when the government's new $23 per tonne carbon emissions pricing regime begins.
Mr Joyce said Qantas would have preferred to have a single global carbon pricing scheme.
'We'd have preferred a system that would apply to all airlines so you don't have distortions associated with it and the complexity of managing a huge amount of different types of schemes with the different requirements on them,' he told the senators.
Qantas was already doing things to reduce its carbon footprint - and reduce its fuel costs - including using more efficient planes, like A380s and Boeing 787s, and testing sustainable aviation fuels from March.
The committee hearing was adjourned after senators finished questioning Mr Joyce and Mr Buchanan.
