Abbott grieving for 5000 redundant Qantas workers

PRIME Minister Tony Abbott told parliament he personally "grieves" for the 5000-odd Qantas workers waiting for a redundancy letter on Thursday.

Mr Abbott made a statement in Question Time when he said he grieved for those expected to lose their jobs.

His comments followed Qantas reporting a $235 million loss in the last half of 2013 and expected job cuts of 5000 employees to save the company $2 billion.

Chief executive Alan Joyce told the stock market the company was facing the toughest conditions "ever seen", as part of its biggest ever transformation, during the past four years.

He specifically named a 46% rise in international competition since 2009, and in part blamed "Australian aviation policy" for its downturn.

"The Australian domestic market has been distorted by current Australian aviation policy, which allows Virgin Australia to be majority-owned by three foreign government-backed airlines and yet retain access to Australian bilateral flying rights," Mr Joyce said.

While the airline has not specified where all the jobs will come from, it has indicated a likely round of cuts at its corporate and Frequent Flyer headquarters, as well as potential cuts to regional and south-east Asian flights.

Deputy Prime Minister Warren Truss described Qantas' announcement as a "tough day" for the company and its workers and families.

Earlier this week, Mr Truss had also indicated the government was inclined to change the Qantas Sale Act, which prevents the company being majority-foreign owned.

While he did not specific whether the government would consider a debt guarantee, which Mr Joyce has previously asked for, that issue is likely to come in future negotiations.

Despite the government facing a tough first budget, it has not ruled out meeting with Qantas to discuss its ailing fortunes.

Likely negotiations came as unions threatened a mass-strike on the company, with Transport Workers' Union chief Tony Sheldon saying the workers had the right to withdraw labour.

He and Australian Council of Trade Unions national secretary Dave Oliver did not rule out potential industrial action should the government and Qantas be unable to come to agreement.