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Qantas has trashed itself.



No matter who wins in the war of attrition involving the great Australian icon, Qantas, the airline has trashed itself beyond belief.

Leaving 80,000 people stranded around the world is the worst PR in the world and already thousands are saying they will never fly with the airline again.

As Adele Horin reported in Fairfax papers: “A chill wind blew across the union movement last night when Alan Joyce and the board of Qantas took the unprecedented step of grounding flights indefinitely and locking out the many thousands of staff who are currently negotiating awards.

It is a tactic rarely seen in Australia, and is reminiscent of Chris Corrigan and the waterfront and Rupert Murdoch a few decades ago when he locked out journalists in Britain for weeks in an attempt to crush, and starve, them into submission.

The move will have profound ramifications for industrial relations in this country.

For the many Australian companies that have been wanting to destroy unions for years, it will be an exciting ride. But for now it has made a mockery of the Fair Work Act, which was introduced to bring harmony to industrial relations and create an atmosphere of good faith in negotiations.

By locking out staff, Qantas hasn’t breached Fair Work in the sense that it doesn’t need to give 72 hours for a lock out, but it is bad faith in that it is supposed to give notice to staff. In addition, it has embroiled short haulage flights in the lockout, when their negotiations don’t even begin until next September.

For this reason, the lock out and grounding of long and short-haul Qantas flights leaves the federal government no option but to intervene and try to sort out a mess that will have savage repercussions on both the tourism industry and industrial relations.

From the day Qantas management decided to take on the unions, it became a philosophical fight about industrial relations rather than pay and conditions. And it was a fight that had been brewing since Leigh Clifford became the chairman. Clifford is renowned for his anti-union stance and played a similar tough role in breaking the unions in the mining industry when he worked for Rio Tinto.”

The reality about this whole industrial issue is that passengers have been voting with their brain full in gear for weeks now and Virgin has become the winner with thousands swopping from the Flying Kangaroo to the alternative.

And despite what Mr Joyce says, this type of disruption does not happen in a few hours. It has taken weeks to reach this point and there can be little doubt that Qantas has been biding its time and waiting for the right moment – the right moment in their view no doubt.

It is a tactic of taking no prisoners.

While the unions have not been acting like angels in this dispute you can’t blame them for some umbrage when Qantas announced plans to shift some of operations offshore, particularly the new full-service carrier in Asia. As if rubbing salt into the wound, they announced that 1000 jobs would be lost in Australia, an astounding announcement during wage negotiations.

And how did we get to this.

Here are some facts about the stand-off:

  • Industrial action by three unions, representing engineers, baggage and catering staff and long-haul pilots, has been ongoing for several months over pay and conditions.
  • Qantas says that the strike action had until Saturday resulted in 70,000 passengers being affected, more than 600 flights cancelled and seven aircraft grounded.
  • The fleet grounding will impact 108 planes at 22 airports, domestically and internationally.
  • Jetstar flights, QantasLink flights and Qantas flights across the Tasman operated by Jetconnect will continue.
  • The dispute has cost the airline about $70 million in damages so far, with costs mounting at $15 million each week. Grounding the entire fleet will cost $20 million a day.
  • In July Qantas pilots on international routes began their first industrial action in 45 years with unauthorised in-flight announcements telling passengers about their dispute. Rolling strikes by engineers also began delaying thousands of passengers.
  • In August Qantas announced a restructure which will see 1,000 jobs slashed as part of a new emphasis on Asia, a move met with a firestorm of criticism from unions.
  • Later that month Qantas announced it had more than doubled its full-year net profit to $250 million but warned of challenging times ahead as it revamps its loss-making international arm.
  • In October Prime Minister Julia Gillard urged unions and Qantas to sort out their differences.
  • The airline flies to 208 destinations in 46 countries, operating more than 5,700 flights a week across all its brands domestically and more than 970 international flights. It moved 44.5 million passengers in the year ended June 2011.(Source ABC news)

The Australian public has a right to ask the Labor government of Julia Gillard why it did not intervene earlier. After all, this is not just about Qantas; it is about the thousands of tourism jobs around the nation that will be lost if the dispute is not settled soon. Even if the unions are forced back to work and Qantas puts its fleet of aircraft in the air again many people will question whether or not to book a business trip or holiday with the airline, uncertain of their plans and whether they will get there and back without disruption. The Qantas brand has gone and all it took was a little Irishman to do it.

The managing director of the Australian Tourism Export Council, Felicia Mariani, says it is vital that a solution is found quickly.

“There’s going to be two sides to this story and I understand both of the issues on both sides of the equation,” she said.

“Our issue right now is not who is to blame but rather as an industry we want the two parties back at the bargaining table seeking a solution and resolving this issue – not only now for the good of the tourism industry but for the good of the country as well.”

David Goodwin from the Queensland Chamber of Commerce and Industry is predicting the Qantas workers who have been taking industrial action will now be sacked.

“I think there will be substantial job losses and for those perhaps who thought that going out on strike and disrupting their employer was a clever thing to do I think they will find out the hard way that if fact what it did was sign away their jobs,” he said.

And what, if the workers are sacked, will that cost the Australian economy? Thousands without a regular income; mortgages teetering on the edge, less spending on essential items such as food and if the workers are ‘sacked’ they government will have to start paying them unemployment money or train them for other jobs at more cost. Meanwhile, Mr Joyce sits back on his salary of $5AU a year – what a joke. And what makes me even angrier is that this man has been given the Order of Australia medal – for what? Destroying the second oldest airline in the world.

And don’t think for a moment people will forget.

As the announcement of the grounding came through 1,500 travellers at Heathrow’s Terminal 3 scrambled to find alternative flights home or accommodation, and say Qantas is providing very little help.

One passenger commented that she would now be flying with Singapore Airlines.

“I have been a loyal gold frequent flyer for some years now and will never fly Qantas again. Enough is enough.”

British Airways flights between the UK and Australia are not expected to be disrupted, but passengers booked on code share flights, such as BA services operated by Qantas, will be affected.

Qantas’ other Europe hub, Frankfurt, is also affected.

While Qantas has fiddled as the airline burns many will have missed the encroachment by airlines such as Singapore into Australia. After all it is not Qantas who is sponsoring the Melbourne Cup but an Arab airline, Emirates. Slowly and smoothly these airlines have been moving their bases to Melbourne (where landing and slot fees are cheaper) and quietly taking over.

Qantas now runs the risk of turning many in cabinet against it, even those who may have been ambivalent about the merits of both sides. And, it is vital for Qantas to have the government on side.

In the pilots’ strike in 1989, which was a long time brewing, some contingency plans were able to be made by the government, such as calling in the RAAF and allowing international airlines to carry traffic domestically.

This time, Qantas has given no advance warning. It will leave a toxic legacy within Qantas as it embarks on its most aggressive push into Asia, where it wants to set up subsidiary airlines employing workers on lower pay rates and conditions than their Australian counterparts.

The Sydney Morning Herald held a poll on the decision by Qantas to ground its fleet.

Poll: Qantas lockout

Has Qantas gone too far by grounding its entire fleet and locking out workers engaged in industrial action?

Yes 56%

No 44%

Total votes: 45844.

Perhaps one of the most galling statements comes from the CEO himself. Mr Joyce is reported to have said “They are trashing our strategy and our brand,” said Alan Joyce, chief executive. “They are deliberately destabilizing the company and there is no end in sight.

“If this action continues as the unions have promised, we will have no choice but to close down Qantas part by part.”

Mr Joyce said that he would not take “the easy way out” and agree to union demands. “That would destroy Qantas in the long term.

“I’m actually taking the bold decision, an unbelievable decision, a very hard decision, to ground this airline,” he said. He added that grounding all the planes was the “fastest way to ensure the airline gets back in the air.”

Qantas has 65 per cent of the Australian domestic market, but its international operation has been making losses. The company is trying to restructure, shedding 1,000 jobs from its workforce of 35,000. The slow international market and industrial action caused Qantas’ share price to slump 46pc over the last year.

With an estimated 80,000 passengers stranded around the world there will be little sympathy for the CEO and that in turn will flow on to customer loyalty and the tourism industry.

This action will hurt Australian tourism for many decades.

Qantas, until now, was an iconic global brand known for safety, reliability, and above all trust.

But as the saying goes, a reputation is built up over decades and lost in a day.

That day has arrived and regardless of any breakthrough, Qantas for many is now just another airline trying to survive in a globalised world.



The BEST holidays

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