Monday, October 31, 2011

Qantas Lock-out

Australian Financial Review reports after lengthy negotiations with three unions that produced no results, chief executive Alan Joyce was faced with three choices: meet union demands; continue operating in the same way, with frequent strikes and uncertainty; or fight back.

He chose to fight back.

And so Australian flag carrier Qantas on Saturday took the unprecedented step of grounding all aircraft amid an industrial dispute. The carrier, which has been walloped by a rolling strike action, said employees would be locked out from Monday evening and flights grounded from 0600 GMT (2:00 PM Malaysian time) Saturday.

Months of strikes by baggage handlers, engineers and pilots were costing the company A$15 million ($16 million) per week, and the total financial impact already hitting at least A$68 million. Some 70,000 passengers had been affected ahead of the announcement and more than 600 flights cancelled. The embattled company's shock decision to ground all aircraft will affect 108 planes at 22 airports.

"I'm actually taking the bold decision, an unbelievable decision, a very hard decision, to ground this airline" Joyce had said. But before we start to shoot at Joyce, let us at least hear his explanations.

The cost of us agreeing to (union) demands is the future of Qantas," Joyce said, accusing unions of seeking to straitjacket the company through their demands.

Joyce also told shareholders at Friday’s annual general meeting in Sydney, “They want to tell us what we can and can’t do in our company,” and added, “(And) they want to be paid to do work that no longer exists.”

But unions claimed that the airline was just seeking to save money by sending jobs overseas – a key plank of the strategy to boost falling international revenues is for Qantas to refocus on Asia. The unions are seeking guarantees on wages and job security. And representatives of pilots, engineers and ground staff are also outraged by Qantas's decision to boost Joyce's pay package by 71 percent, from A$2.9 million in 2009/10 to A$5 million ($5.2 million) in 2010/11, just as he disclosed his intention to axe 1,000 Qantas jobs. Even accounting for that, the airline still posted a net profit of A$250 million in the last financial year.

I don’t have full clarity on the issues that caused this fractious quarrel – except for the information detailed above. But as far as I am concerned, Joyce’s action was really extreme and even unwarranted. Furthermore, by making that lock-out decision, he has surrendered all moral authority.

I have troubling questions. Can Joyce make the unilateral decision to shut down Qantas? Did the Qantas board agree? Was Transport Minister Anthony Albanese informed? Surely there were other options to consider? What was Joyce’s real motive behind this decision? Was he trying to force the government’s hand to clip the unions’ wings permanently? Can the Qantas management's greed be satiated? And whatever happened to their passengers’ interests?

Anyway, after the government made an emergency application, independent arbitrator, Fair Work Australia intervened – ruling in the early hours of this morning to terminate industrial action by both the airline and the three unions. This means the Qantas fleet could be returning to the skies from this afternoon - hopefully. Prime Minister Julia Gillard said the parties now have 21 days to resolve the dispute. And if they are unable to do so, then Fair Work Australia would impose a solution on them at the end of this 21-day period.

Qantas is a global brand with a carefully cultivated reputation for reliability and safety over the past 90 years but when Joyce abandoned his passengers with impolite haste and without the decency of a prior notice, he must take the blame as the transgressor who single-handedly thrashed the Qantas brand – don't fault the unions! And the Qantas reputation quickly went down the drain! The Qantas management are being selfish – they’re not wanting just to survive in a globalized world; they want to make as much money as they can for their shareholders, come what may! Doesn’t Joyce personify the 1 percent that the OWS is up in arms against? Isn't the 99 percent that will end up paying the price for his avaricious business direction that wants profit at any cost with scant regard for ordinary workers? It is the vile specter of evil capitalism rearing its ugly head.

Tourism chiefs said Qantas’s status as Australia’s flag carrier and arguably their best known global brand meant the Joyce decision had implications that went far beyond the company. Tourism Accommodation Australia managing director Rodger Powell said the country’s “Brand Australia” was also in jeopardy, threatening a tourism industry worth A$34 billion a year.

Thanks, Joyce!

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