THE NEWS WRAP: Qantas in showdown with unions over job cuts and wage freezes

Embattled Qantas chief executive Alan Joyce is set to begin talks with union heavyweights today after announcing 5000 job cuts and a wage freeze, following a massive $252 million loss for the December half.

“The current position is unsustainable. There are many Australian companies that have failed because they were not prepared to make the hard decisions. Qantas is not one of them,” Joyce says.

Meanwhile, Prime Minister Tony Abbott has poured cold water on the idea of a federal government debt guarantee for the troubled airline.

“Why should the government do for one what it is not prepared to do for all, or what is not necessarily available for all?” Abbott says.

Air New Zealand posts record profit

Air New Zealand has posted a record half-year profit of $NZ140 million ($A130 million) despite expectations of a $49 million loss at Virgin Australia, in which it holds a 24.5% stake.

“We have worked hard on improving our cost base in an environment where we have not grown,” Air New Zealand chief executive Christopher Luxon says.

“In fact, we have reduced our capacity flown overall as we realigned our long-haul network.”

Nationals MP raises doubts over paid parental leave

New South Wales National Party Senator John Williams has raised doubts over the future of Prime Minister Tony Abbott’s proposed paid parental leave scheme, telling the ABC the economy is too weak to support the plan.

“I’ve said all along, I don’t have a problem with the paid parental leave scheme. That is our policy so long as the economy is strong, but I do have concerns about the strength of the Australian economy,” Williams says.

“To me a strong economy in Australia [has] a four in front of unemployment – that’s currently got a six in front of it and a four or close to four in front of economic growth – and we’re currently growing at 2.5%.”

Williams says he will have talks with Abbott before announcing whether he’s willing to cross the floor over the proposal.

Overnight

The Dow Jones Industrial Average is up to 16248. The Aussie dollar is down to US89.6 cents.