Since its pilots voted overwhelmingly to support any union call for lawful or protected industrial action, Qantas management has started arguing with its pilots about its plans to restructure the airline group rather than their pay claims for a tiny 2.5% three-year pay deal.
This may prove to be a game-losing own goal.
To boil down the management response, it is that union demands that all Qantas pilots be trained to current Qantas standards and have their jobs paid and located in Australia are “excessive and unsustainable” and a “veto on change”.
Hello Treasury, the ATO, and members of parliaments? Can you drag your heads out of the trough in the Qantas Chairman’s Lounge long enough to digest something more important than your perks?
This is dangerous ground for Qantas, given that this implies that current piloting culture of excellence is unaffordable, and that jobs sent abroad will somehow translate into bigger profits at a time when mismanagement continues to drive a shrinking Qantas market share further towards oblivion.
The notion that a smaller Qantas, but one increasingly augmented by Qantas-controlled-and-financed entities flown and serviced by labour paid under Asian terms and conditions, is going to be a better Qantas, has become the real issue in this dispute.
The Australian and International Pilots Association has wedged management by taking on the role of defending public perceptions of Qantas excellence rather than promoting their claims for improved pay and conditions.
Qantas Group CEO Alan Joyce has already committed himself to a wide-ranging restructuring announcement on August 24, the day it reports its full year to June 30 results to shareholders who haven’t had a dividend for two years.
Joyce’s frequent claims that Qantas international is unsustainable and his equally frequent brushing aside of requests for disclosure as to how much that situation reflects the paying of costs associated with the Jetstar franchise can be read alongside claims by Jetstar group CEO Bruce Buchanan, that lower-paid, lower-experience pilots are better than those whose pay and conditions reflect a much more costly company investment in safety standards and professional experience.
Joyce was the CEO of Jetstar when it nearly destroyed an airliner in 2007 because it improperly changed and consequently degraded the standard operating procedures for a missed approach in its A320 fleet, one of which then nearly flew into the ground in fog trying to climb away from Melbourne’s Tullamarine Airport with the engines set to reduced rather than go-around thrust settings.
In his own public guidance, Joyce has talked up the merits of offshore alliances, ventures and service agreements, all of which remove from the direct control of Qantas those very things the public expect it to uphold, and that obviously threaten union jobs too.
After the very serious QF32 incident on November 4 last year, in which a defective Rolls-Royce engine disintegrated and severely damaged an Airbus A380, Joyce attacked the engine maker for its secrecy in not telling Qantas things it knew about that engine, and about its decision to “fix” the deficiencies in its own sweet time.
Yet Joyce continues to support such service agreements, where Qantas saves money, but is at the mercy of service failures by third parties that are replacing its own maintenance and engineering facilities and their decades of experience.
Similarly the airline is resisting Qantas pilot concerns that the carrier’s professional piloting standards are being traded in for external providers of pilots, some of whom will replace Australian pilots by being based somewhere in Asia, and flying to and from this country and then onwards to Europe and other destinations.
In what has been interpreted in pilot ranks as an effort to reduce redundancy costs in the impending August 24 restructure, Qantas last week told its pilots that they could apply for leave of absence for three years to fly as first officers for Emirates, its most aggressive and successful long-haul competitor.
For travellers uninterested in labour-management disputes, this is also a row about what Qantas will be in the future. Will it continue to be “the Spirit of Australia”, and will it continue to chest beat over being the national flag carrier when more of its experienced pilots are flying for foreign carriers, having been replaced by lower-paid, less-experienced foreign pilots?
It is a very perverse outlook. Experienced Qantas pilots forced abroad, to strengthen the likes of Emirates and Singapore Airlines, while the pilots they reject get hired by Qantas Asian franchises because they are cheap, inexperienced and supposedly good for the bottom line.
I havent been on a Qantas OS flight for 20 years as I found most other airlines flying out of Melbourne better and cheaper and I dont have to waste 3 hours of my valuable time going via Sydney just to save them money.
The perception that QA are skimping on maintainace and servicing and now looking for inferior pilots just reinforces my desire to not fly with them.
QANTAS once one of the most prestigious airlines in the world… with an enviable safety record (thanks to the quality of Australian trained Pilots) now reduced to an inferior THIRD WORLD Country airline, because of the past 2 CEO’s who
have gutted it and continue to gut it so they can make a bigger profit. Get rid of the latest CEO and put in someone who
knows that quality and safety can never be replaced by money. In fact when are they going to learn that there are some
things that money cannot buy. That is why fewer and fewer people are flying Qantas. Take away the only Gr8 thing that they have left, namely, the quality of Australian Trained Pilots and they will see their customers follow in the footsteps of their best pilots… travelling on Emirates!!! That will be goodbye Qantas and goodbye to Alan Joyce.
Ben, I find your articles to be very one sided and unbalanced. Contrary to your articles, pilots are not the only stakeholders in the Qantas business. Believe it or not, Qantas does have shareholders!!! Those shareholders have not received a dividend from Qantas for quite some time. Your articles completely ignore the plight of shareholders, who actually own the business, and are almost totally centered on the interests of the staff with some minor consideration given to the interests of customers. You have no balance in your comments.
Firstly the pilots are employees. They do not own the airline and they do not have the right to direct the airline as to how it must run its business. Their views, as experts in their field, and as employees will always be taken into consideration but they do not have a right of veto over the airlines decisions.
Secondly you have completely failed to comprehend the competitive airline landscape. Customers are increasingly refusing to pay a premium for international flights. Some may pay a premium to get better service/facilities but they wont pay a premium to fly an airline to ensure its pilots are amongst the highest paid in the world. Customers want to see value for money. Its not their only driver but it is their most important driver. It may be hard for you to face up to the reality that it is not Alan Joyce that is killing Qantas International – it is the customers who are voting with their feet. Customers are increasingly choosing to fly other airlines because they are cheaper and offer equivalent service levels and equivalent safety levels.
Thirdly your arguments on safety are bordering on racism. Australia does not have a mortgage on good and experienced pilots and it does not have a mortgage on good engineering practices. Your articles are based on a sweeping assumption that everything done by Australians is done better than it can be done by foreigners and that simply is not true.
It is about time the Pilots wake up and smell the roses. By taking this industrial action they are shooting themselves in the foot and increasing the probability that Qantas will move down the off-shoring path. The pilots are not giving Qantas much choice but to move down the off-shoring path. If the pilots were truly interested in the future of Qantas they would be looking at ways to make themselves more efficient and therefore more competitive with overseas pilots – a win-win scenario for Pilots and Qantas – and an appropriate path to take if you wanted to decrease the probability of Qantas off-shoring. But the Pilots are not interested in a win-win. This is all about their self interest and not about the airline.
If Qantas does decide to go down the off-shoring path the pilots should take a bow for they have been a key contributor to that decision. For it is the pilots who are kicking the own goal!!!
Flying High,
You appear to have overlooked the reference to no dividends high in the story.
You also appear to have missed detailed reports I have written on the failures of this management to deliver a profitable and growing and relevant Qantas to its shareholders.
You may have missed the governance questions concerning the transfer of assets away from the full service brands to the low cost franchise to fit an agenda rather than preserve the value of the Qantas brand.
The notion of running down Qantas to make it better is an absurdity, and one that greatly assists it competitors.
I think there are some shareholders who will blindly go about accepting without question the destructive consequences of current management policies, and media coverage that does nothing more than repeat press releases. You need to consider carefully the possible reasons for a lousy share price and a lack of dividends, and quietly review the glorious history of Australian investments in Asia in general and China in particular, where business relationship are built over may decades, rather than based on vague assertions.
Incidentally the racist claims are ad hominem and offensive. No one is claiming, nor would I tolerate, an assertion that Australian pilots are racially superior to any others. What is being asserted is that Qantas has an investment in high training standards and experienced pilots that it now finds too costly to maintain, as it does with its engineering standards.
It wants to become an average carrier, not an excellent carrier, and it is prepared in my view to bank the savings from this based on risk analysis that says being average will save it billions of dollars but kill a few hundred customers every few decades.
The Jetstar incident at Melbourne in 2007 contains critically important lessons you appear unable or unwilling to comprehend, but if you are serious about share holder values, you will do everything you can to prevent this internal attack on the core values of the brand.