THE levels of toxicity between staff and Qantas will hit new highs this week if the international pilots union lodges an application with Fair Work Australia to allow it to instigate protected industrial action.
If the application proceeds, and is followed in four weeks with a ballot by the pilots to take action, it will be the first industrial action taken by Qantas pilots in 45 years.
The 1989 pilots’ strike action was taken by Ansett pilots and was one of the most dramatic industrial disputes in the country’s history, with the then Hawke government calling in Air Force pilots to help break it.
For Qantas pilots to reach the point where they are finalising an application with the Fair Work Australia shows how far the relationship between staff and management has deteriorated. An application is expected to be lodged by the Australian and International Pilots Association (AIPA) tomorrow.
The first stage of industrial action is expected to include a work-to-rule campaign and an overtime ban, which would result in big disruptions as nothing would run on time. If this doesn’t work, the campaign would be ratcheted up.
A similar campaign was conducted in 2008, when the Australian Licensed Aircraft Engineers Association (ALAEA) conducted a work-to-rule campaign, which resulted in widespread delays at the airline. The ALAEA is on the brink of a new campaign after winning approval from Fair Work Australia earlier this month.
It opted to delay any industrial action for the next few weeks after discovering that the airline had some “unexpected aircraft unserviceabilities” of which many are engine related. “We don’t feel it in the interests of either party to compound the problems with protected industrial action at this time.”
The pilots are seeking guaranteed flying hours after the expansion of the airline’s budget carrier, Jetstar, lowered labour costs.
The big concern of the pilots, and engineers, is the trend by the company to outsource jobs. For instance, Jetstar flight attendants who are hired in Thailand are paid a fraction of the Australian minimum salary. Jetstar pilots are paid less than Qantas pilots and have fewer conditions, and the company is outsourcing some maintenance.
Nobody denies Qantas boss Alan Joyce inherited a tough gig: record high fuel prices, a blowout in debt from the need to replace its ageing fleet over the next decade, vigorous competition on the international sector from carriers such as Emirates and a share price that is trading just above its issue price more than 15 years ago.
Qantas has one of the highest cash operating expenditures among regional peers. To date, it has been able to offset this with its yields – an industry gauge of profitability.
But its yields are under attack. Intensifying competition in the shape of lower prices, better-quality products and a perception that the company is running down the Qantas brand are forcing those yields down.
With some of its bigger institutional shareholders putting pressure on the board to restore dividends and lift the share price, Joyce and the Qantas board have used wages and outsourcing as a key way to cut costs and maintain margins and yields.
But Joyce’s handling of staff and the disengagement and poor morale that is rife throughout the company cannot be underestimated.
Nor can the erosion of customer service in an effort to cut costs.
Who will win the industrial dispute will boil down to who plays the PR game best. Customers hate disruptions to their travel plans, even if it is a couple of hours, and if they think the EBA claims by the international pilots are outlandish then they will lose patience with an airline that is already suffering from brand damage after a string of mid-air emergencies last year and a decision by Qantas to reduce the quality of service to a point where it is being destroyed by better product being flown more directly to more destinations.
However, if Australians believe that the quality and safety of Qantas is in jeopardy – and there is a growing belief that it is – customers will be sympathetic to the unions in their endeavours.
One pilot said: “Qantas pilots don’t believe a word that comes out of the words of management. They have been lied to for too many years … Even Jetstar pilots have come to realise the same thing. No one is safe from this rapacious management, least of all the Qantas safety culture. So the time has come to stand up and let the chips fall where they may.”
Tough words that weren’t helped with news that the company intends to introduce a business class product at Jetstar in Asia rather than Qantas.
With so much discontent it is not surprising that the results of a staff ”engagement” survey have been suppressed from release because they are worse than the last survey about a year ago.
What is fascinating about the industrial relations disputes is that its toxicity has spread inside the company. One of the key architects of Qantas’s industrial relations strategy is an outsider, former ACTU official Ian Oldmeadow, who is renowned in union circles for being confrontational.
During calm times it is easy for a human resources manager to outsource key aspects of industrial relations, but when things turn sour, as they have now, it highlights the need for internal control of the policy.
As a staff member said: “Qantas always cries poor. However, they pay over $10 million a year on consultant fees. There is joke inside the business that Qantas is a consultants’ Disneyland – ‘We make your dreams of greed come true’.”
