Qantas locks out 3 unions - grounds all flights

[Seeker]

Australian Broadcast Company link

The airline is fighting with its pilots, ground staff and engineers over pay, conditions and the outsourcing of jobs overseas.......

[Thebean]

Australian Broadcast Company link

The airline is fighting with its pilots, ground staff and engineers over pay, conditions and the outsourcing of jobs overseas.......

The baseball season is over in North America but it appears its just begun in Oz with this hardball having been thrown.

Australia dealt with an collapse of a major carrier about 10 years ago. Others quickly filled the void. I doubt the Australian gov't is particularly fussed about this move.

[Seeker]

I doubt the Australian gov't is particularly fussed about this move.

If they aren't, they should be.

[dagger]

If they aren't, they should be.

Australia's Qantas Airways grounded its entire fleet on Saturday over a bitter labour dispute in an unprecedented move, with the government asking a tribunal to stop the conflict which it worries is putting both the airline and the economy at risk.

It appears Qantas is giving the Australian government the pretext to intervene. Unlike the Air Canada situation where the Harper government is acting pre-emptively, on a union by union basis and in advance of serious flight disruptions, the Aussie government has to allow thousands of passengers to be stranded in order to have sufficient pretext to intervene. I have to say that the Harper approach, though more controversial, demonstrates both better political acuity and puts the passenger ahead of the unions and management.

Bean: I don't think the Ansett and Qantas situations are quite the same. They play/played different roles. Ansett was only a bit players internationally, and for an island country like Australia, Qantas represents much more - and there is likely some inherent nationalism in supporting it, rather than let the solution being domination by Gulf carriers and SQ of all of Australia's key intercontinental travel corridors.

If anything, I suspect this dispute helps legitimize Harper's actions in the AC file. AC is not even talking about setting up airlines based overseas, staffed by foreigners. I actually understand the ire of the Aussie unions better on the topic of lower cost subsidiaries. The unions would have no say in wage and working conditions of Qantas-owned subs based outside Australian labor law.

[bm330]

Although this current contract dipute has only been running for a number of weeks, the underpinning issue has been around for a considerable time. Quantas started a LCC called Jetstar a number of years ago and has been steadily shifting flying from the mainline (Quantas) to the LCC (Jetstar). As Jetstar has grown, its cost structure has changed and Quantas management now wants to base a significant portion of Jetstar offshore - with its associated reduction in red tape (and cost) that goes along with getting out from under Oz labour laws.

[FireFox]

Although this current contract dipute has only been running for a number of weeks, the underpinning issue has been around for a considerable time. Quantas started a LCC called Jetstar a number of years ago and has been steadily shifting flying from the mainline (Quantas) to the LCC (Jetstar). As Jetstar has grown, its cost structure has changed and Quantas management now wants to base a significant portion of Jetstar offshore - with its associated reduction in red tape (and cost) that goes along with getting out from under Oz labour laws.

And while this has been going on their CEO, Alan Joyce, has seen his pay packet skyrocket from $2.92 million in 2009-2010 to $5.01 million this year...a 71% increase.

Sounds familiar.

http://www.smh.com.au/business/joyces-pay-soars-as-costs-mount-20111028-1moay.html

[J.O.]

Qantas has also been saddled with many of Jetstar's operating costs such as ground services and some maintenance. Not a very fair fight, IMO.

[Guest rozar s'macco]

dagger you are playing silly buggar and you know it. AC is not talking about setting up offshore entities NOW, but Rovinescu has been crystal clear in his message that Qantas/Jetstar is the model. I don't believe he is planning to ape every move, but developments like this give us employees reason to pause. Right now, lockout is not in the AC bag of tactics because there is nobody that is not a competitor to take our place. Fast forward 4 years, if LCC happens, I would fully expect management to lock mainline employees out and fill the void with LCC.

ACPA would be signing it's own death warrant if it allows a scope let with reduced WAWCON at an LCC. This Qantas fiasco is just like looking into a crystal ball for us.

[Dork]

War on the middle class is well underway.

[rudder]

dagger you are playing silly buggar and you know it. AC is not talking about setting up offshore entities NOW, but Rovinescu has been crystal clear in his message that Qantas/Jetstar is the model. I don't believe he is planning to ape every move, but developments like this give us employees reason to pause. Right now, lockout is not in the AC bag of tactics because there is nobody that is not a competitor to take our place. Fast forward 4 years, if LCC happens, I would fully expect management to lock mainline employees out and fill the void with LCC.

ACPA would be signing it's own death warrant if it allows a scope let with reduced WAWCON at an LCC. This Qantas fiasco is just like looking into a crystal ball for us.

And do not forget that this scenario requires a 'facilitator' with jurisdiction in order to be implemented. It would appear that may exist in Australia and most certainly exists here in Canada with the Federal Conservative Government.

[dagger]

And do not forget that this scenario requires a 'facilitator' with jurisdiction in order to be implemented. It would appear that may exist in Australia and most certainly exists here in Canada with the Federal Conservative Government.

Except that facilitator has passed over the chance to liberalize bilaterals to the level Australia has. The Singapore-Australia bilateral certainly facilitates this arrangement, the recently renegotiated Canada-Singapore bilateral most certainly doesn't, though it could have if Canada had wanted. The only Canadian bilateral where this might work is the Stage 4 arrangement in the new Canada-EU open skies arrangement, but I doubt I will live long enough to see Stage 3, let alone Stage 4 implemented.

Moreover, geography is a key facilitator for Australia. Singapore, where the offshore carriers would be based, lies in the major corridors Australia travel - to Bali, Phuket, Penang, the Gulf States, India, Europe. It is ideally suited for the role. There is nothing comparable for a North American airline. If you based a Canadian long-haul discount airline in Mexico or El Salvador, you would hit a few seasonal routes travelled by Canadians, but little of significance.

We can debate this forever, but people who automatically see a Singapore-based Qantas carrier as a model for Air Canada haven't thought this through.

[Don Hudson]

War on the middle class is well underway.

...and has been since the turn of the century...the Nineteenth Century, that is.

Read "Taking the Risk Out of Democracy", by Alex Carey for an accounting of this very open, legal eradication of the middle class in favour of the few. Naomi Klein's "Shock Doctrine" is another. And tune in Rachel Maddow on MSNBC for a mental health check against the status quo as well as what the Republicans continue to say in defence of the indefensible. It's going to be quite an election.

While multi-million dollar salaried and stock-option bonused CEOs fart in silk, indentured employees and future workers who are presently students with huge debts are all staring at a low wage future with no hope of taking a meaningful part in a trillion-dollar economy which the wealthy class has carefully and legally carved out for itself and around which it has erected impenetrable walls of secrecy, unaccountability and a studied indifference for everything not associated with profit and the dysfunctional imbalanced subservience exhibited in the requirement to continuously please the shareholder every quarter. It isn't good for anyone but particularly the shareholder who deserves a return on their investment but not at the expense of the investment.

By voting such incredible salary, bonus and stock option rewards for executives who fail to raise share prices or provide dividends, shareholders create a dysfunctional relationship between owners and operations which cannot possibly continue without considering the effects on the workforce. It is a recipe for the inevitable social unrest on a scale unknown since the 1960s and perhaps unheard of even post WWI.

The "Occupy..." movement, now spread worldwide, may indeed be a blip on corporate radar as has been said, compared to the social upheaval that can potentially be generated by such institutional disparities.

I think it need not have been this way. I think the development of the post-war (II) Keynesian welfare state could have been rationalized such that companies and workers, who in the "New Deal" may have entered unsustainable agreements could have been down-guaged to mutual benefit. But profit is as profit does, greed is as greed does and finally power is as power does. Deregulation, privatization such that corporations dictate social priorities and the financialization of the western world are mere facilitating details. "Farting in silk"'s time can now be measured and it is both government and business but primarily the population itself who watched Laverne and Shirely and sports instead of paying attention to what their government was doing, who need to examine why, when it could have been so good for all.

Don

[Dork]

Airline employees should have a cock your leg day for airline CEOs.

Fart in silk...indeed.

[FA@AC]

If you based a Canadian long-haul discount airline in Mexico or El Salvador, you would hit a few seasonal routes travelled by Canadians, but little of significance.

I agree for the most part, but there might be enough work to justify a Cuban ($30 monthly sallary) or Jamaican crew base for AC's LCC.

[dagger]

I agree for the most part, but there might be enough work to justify a Cuban ($30 monthly sallary) or Jamaican crew base for AC's LCC.

That's not the same as setting up a Canadian owned airline in Cuba or Jamaica, which would be the equivalent to the Qantas carrier based in SIN.

Also, domestic routes can't be flown by foreign-based crews, it would impractical for transborder routes.

The only thing that would make sense for a foreign based AC LCC would be a transatlantic service using European crews, which isn't going to be any better financially than using Canadian crews.

There are very few opportunities to run 767s across the Pacific and make a go of such a concept.

AC employees are so worried about their jobs being cannibalized by an AC LCC. They should worry about what Westjet or another non-union carrier could do to their jobs with the same concept.

A couple of very successful companies I do business with have made an art over cannibalizing their own products rather than sit idly by until a competitor comes along and does it for them. That's how they conserve control of their markets. You have more control over an AC LCC than you ever would with a Westjet widebody product.

[FA@AC]

That's not the same as setting up a Canadian owned airline in Cuba or Jamaica, which would be the equivalent to the Qantas carrier based in SIN.

Also, domestic routes can't be flown by foreign-based crews, it would impractical for transborder routes.

No, not the same thing. All I was trying to suggest, however, was that if AC wished to lower employee, or at least crew costs for its LCC hugely, it could do so by establishing bases for LCC pilots and FAs offshore. A HAV-based crew, for e.g., could easily operate trips such as HAV-YYZ-CUN (layover), CUN-YYZ-HAV at far lower cost than what AC would have to pay Canadian-based crew members, even if they worked for LCC wages, to operate the same flights.

I'm not posting this in an effort to defend CUPE's handling of LCC-related negotiations.

[J.O.]

Here's a transcript of a speech made by an Australian senator on the QANTAS financial situation. Makes for interesting reading.

Senator Xenophon

[dagger]

No, not the same thing. All I was trying to suggest, however, was that if AC wished to lower employee, or at least crew costs for its LCC hugely, it could do so by establishing bases for LCC pilots and FAs offshore. A HAV-based crew, for e.g., could easily operate trips such as HAV-YYZ-CUN (layover), CUN-YYZ-HAV at far lower cost than what AC would have to pay Canadian-based crew members, even if they worked for LCC wages, to operate the same flights.

I'm not posting this in an effort to defend CUPE's handling of LCC-related negotiations.

I understand what you are saying, too. And while it's theoretically possible, it's only a feasible concept if it were done on a large scale. For example, Delta/Northwest has a Tokyo crew base to handle its inter-Asia network. I'm not sure if the Tokyo-based crews also rotate onto the Pacific routes, but in any case, it's a large base. And they have - or at least had a decade ago - a large flight kitchen and other support infrastructure just outside Narita. I'm not sure how United handles its intra-Asia legs. It's not cost effective to have a crew base just for one three-hour flight per day. If the Cuban crews couldn't work other flights - and it wouldn't be practical or legal for them to fly within North America, they'd have to operate intercon routes. But then there are the joys of language laws. You'd need to find a lot of trilingual people because you couldn't crew a route without some French-speaking staff. Since AC is not looking to fly 777s at an LCC, it isn't going to operate on the Pacific. It looks like a pure transatlantic play with company-owned 767s displaced by the arrival of 787s. You could take marginal seasonal routes like BCN, ATH, AMS and make some decent money operating them with a lower wage, all-economy 244-seat aircraft. In winter, you flip those planes to do Hawaii, some Caribbean and maybe a couple of Brazil beach resorts under the newly liberalized Brazil bilateral. That profitability would beneficially impact the mainline operation,

The concept I have in mind, and what I think Calin is looking at, is something like the telecoms that have a regular, dominant product and a discount carrier. For example, Rogers and Fido. If you are looking for dirt cheap, no frills, no contract, you can go with Fido. (I do). If you want more comprehensive plans and coverage, especially if you are using multiple platforms (tablet, smart phone, maybe bundling with television or home phone services), you go with Rogers and get better network coverage and data plans and discounts. Yet the existence of Fido keeps a portion of discount revenues with Rogers rather than lose that business to Koodo, Wind, etc. Rogers also retains access to the Fido customer. At some point, the Fido customer may feel his or her needs have changed and that a Rogers deal is better. Bell is now doing the same. That's how you defend your market and your brand today if you are the higher cost, established player.

If I were AC, I'd make the LCC a distinct product, with a different name, different service standards, different uniforms than the mainline. I would NOT offer Aeroplan status points, and only 25% of mileage at that. Maybe I wouldn't offer Aeroplan points at all. As far as I am concerned, from the customer standpoint, the LCC would not have any obvious affiliation to AC. I would be as if AC had bought Zoom and grafted it onto its corporate structure while retaining all of its uniqueness. I would not even protect passengers on AC mainline except under extraordinary circumstances like volcanoes, extended bad weather.

[rudder]

The concept I have in mind, and what I think Calin is looking at, is something like the telecoms that have a regular, dominant product and a discount carrier. For example, Rogers and Fido. If you are looking for dirt cheap, no frills, no contract, you can go with Fido. (I do). If you want more comprehensive plans and coverage, especially if you are using multiple platforms (tablet, smart phone, maybe bundling with television or home phone services), you go with Rogers and get better network coverage and data plans and discounts. Yet the existence of Fido keeps a portion of discount revenues with Rogers rather than lose that business to Koodo, Wind, etc. Rogers also retains access to the Fido customer. At some point, the Fido customer may feel his or her needs have changed and that a Rogers deal is better. Bell is now doing the same. That's how you defend your market and your brand today if you are the higher cost, established player.

If I were AC, I'd make the LCC a distinct product, with a different name, different service standards, different uniforms than the mainline. I would NOT offer Aeroplan status points, and only 25% of mileage at that. Maybe I wouldn't offer Aeroplan points at all. As far as I am concerned, from the customer standpoint, the LCC would not have any obvious affiliation to AC. I would be as if AC had bought Zoom and grafted it onto its corporate structure while retaining all of its uniqueness. I would not even protect passengers on AC mainline except under extraordinary circumstances like volcanoes, extended bad weather.

dagger,

The issue that you are avoiding is that the LCC will not be solely supplemental, even as described by you. It will - by necessity - be comprised partly or entirely of existing mainline city pairs.

That is the issue.

[dagger]

dagger,

The issue that you are avoiding is that the LCC will not be solely supplemental, even as described by you. It will - by necessity - be comprised partly or entirely of existing mainline city pairs.

That is the issue.

And the issue you are avoiding is that some of these mainline city pairs shouldn't be mainline because they don't fit the profile of a good business/leisure mix, rather mainline assets should be redeployed on new routes that can generate that kind of mix. Part of the premise of the 787 is to extend the range now available through the 767 (and do it at a lower CASM cost). Routes that would otherwise be too far, or too risky financially with a 767 can become profitable opportunities while secondary markets that are more charter-like in character go over to an LCC which can do it profitably.

AC has quite a few well-maintained 767s that are or can be bought out for cheap, and it would be a sad day if they cannot be kept in the fleet, employing people, giving the market a different choice.

[Kip Powick]

CANBERRA, AUSTRALIA—An Australian court early Monday ended the strikes and employee lockout that had abruptly grounded Qantas Airways and stranded tens of thousands of passengers worldwide. The airline planned to speak soon on when flights will resume.

The arbitration court heard more than 14 hours of testimony from the airline, the Australian government and unions after the government called the emergency hearing Saturday. Workers have held rolling strikes and refused overtime work for weeks out of worry that some of Qantas’ 35,000 jobs would be moved overseas in a restructing plan.

The unions wanted a temporary suspension of the employee lockout, but the airline said the strikes had been too devastating and it needed certainty to continue operating.

Tribunal President Geoffrey Giudice said the panel decided a temporary suspension would still risk Qantas’ grounding its fleet in the future and would not protect the tourism and aviation industry from damage.

Qantas is the largest of Australia’s four national domestic airlines, and the grounding affected 108 planes in 22 countries.

About 70,000 passengers fly Qantas daily, and would-be fliers this weekend were stuck at home, hotels, airports or even had to suddenly deplane when Qantas suspended operations. More than 60 flights were in the air at the time but flew to their destinations, and Qantas was paying for passengers to book other flights.

Qantas CEO Alan Joyce said before the panel ruled that the airline could be flying again within hours of a decision. He had estimated the grounding would cost the carrier $20 million a day.

German tourist Michael Messmann was trying to find a way home from Singapore on Sunday. He and his wife spent five weeks travelling around Australia but found their connecting flight home to Frankfurt suddenly cancelled.

“I don’t know the details of the dispute, but it seems like a severe reaction by the airline to shut down all their flights. That seems a bit extreme,” said Messmann, 68. “After five weeks of travelling, we just want to go home.”

Australian business traveller Graeme Yeatman sided with the airline, even though he was also trying to find a new flight home to Sydney on Sunday after his flight was cancelled.

“I think the unions have too much power over Qantas. Even though this is an inconvenience for me, I’m glad the airline is drawing a line in the sand,” said Yeatman, 41.

The airline infuriated unions in August when it said it would improve its loss-making overseas business by creating an Asia-based airline with its own name and brand. The five-year restructure plan will cost 1,000 jobs.

Qantas said in August it had more than doubled annual profit to AU$250 million but warned that the business environment was too challenging to forecast earnings for the current fiscal year.

//