The dramatic decision by Qantas to ground both it's international and domestic fleets of aircraft until a dispute with the unions is resolved will have implications for the national economy. It also signals that our national carrier believes that major change is necessary if the airline is to survive in a rapidly changing marketplace.
Qantas - as a stock exchange listed company owned by it's shareholders - is now competing with several new national airlines which are fully owned by their governments. While Qantas aims to make a profit, these competitors do not have the same profit necessity. Their purpose is to achieve national pride - and to enhance the tourist industry in their home country.
Qantas runs a three class airline both domestically and internationally. Seats are available first class, business class - and what are often termed " Coach ", " Tourist " or " Economy ". Our national airline spun off a one class tourist airline - Jetstar - and this is not affected by the grounding.
Qantas has made it clear that to survive in the near future some of it's operations will need to be based in an Asian hub and that will involve the loss of at least a thousand Australian jobs. It intends to start two new airline companies - and these will not necessarily bear the Qantas name and logo. The purpose of this move is to compete on equal terms with others who have lower costs because of lower crew and servicing wages than those prevailing in Australia.
The various unions servicing airline personnel are determined to force Qantas to remain based in Australia and have launched a very effective guerrilla campaign to bleed the airline financially. One of the tactics has been to announce strikes - and then at the last minute - when Qantas has cancelled some services and used bigger planes on others to move a greater number of passengers - cancel the strike. As a result, their members retain full pay, passengers are inconvenienced, the Qantas brand is trashed and this is costing the airline fifteen million dollars a week.
Qantas counters that the unions are demanding an unreasonable log of claims, including retaining work practices that no longer apply to the most recent designs of aircraft, and most importantly - insist on job security provisions being included in awards that can not be guaranteed, given the uncertainty of the recession engulfing both the US and Europe.
The Qantas grounding is designed to bring this whole matter to a head - one way or another. The grounding only applies to Qantas brand aircraft and Jetstar, Qantaslink and the two freight arms will continue to fly. Qantas will pay hotel costs for stranded passengers, and assist them to complete their journeys on other airlines - but the shutdown will cost the company twenty million dollars a week while it continues.
This action has forced the hand of the Federal government, which until now has stood aloof. It will try to involve Fair Work Australia as the entity to negotiate resolution, but that will be suspect by many people because of the close links between the Labor government and it's union allies - and Fair Work Australia is the creation of a socialist government.
This is a high risk situation and the bargaining chips are huge. There is no guarantee that any order from Fair Work Australia would be obeyed by either side and it is quite possible that Qantas could simply quit this country for a new life in a new city hub.
Hopefully, negotiations between Qantas, the unions and Fair Work Australia will be conducted with honesty and the intention of keeping Qantas Australian. If it degenerates into a pure political fight - there will be no winners !
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