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Ciao Roma, but it’s soggy pasta for the limping kangaroo

by Michael Sainsbury | Jul 7, 2022 | Business, Latest Posts

Airport, customer and capacity chaos is besetting Qantas, with industrial action now in the wings, writes Michael Sainsbury.

It’s a time-worn Qantas tactic: distracting the mainstream and industry media from its problems with whiz-bang announcements and all-expenses paid trips for pet journalists to exotic destinations.

As chaos swirls around the company and its chief executive, Alan Joyce, Qantas has used both its chunky advertising budget and its ‘coming soon’ aircraft from its new main supplier Airbus and the opening of a new direct route to Rome from Perth (replete with new menu designed by celebrity chef Neil Perry)  to swamp unfavourable media coverage. 

“As soon as there’s bad news, you can bet your bottom dollar there’s an announcement,” Transport Workers’ Union secretary Michael Kaine told MWM. “The most recent example of that was the day after the three Federal Court judges on the full bench backed-in the illegality of the outsourcing, Joyce went out to the media and announced that he was going to buy $38 billion worth of new planes.”

Following this, Qantas sent a bevy of journalists, including News Corp’s Andrew Bucklow, to Rome, resulting in gushing coverage on its news.com.au site.

“Rome is one of the world’s most popular tourist destinations with more than 10 million visitors per year (before the pandemic). And as we all know, cities that are popular with tourists often mean one thing … they’re bloody expensive. But guess what? A visit to Rome doesn’t have to leave your bank account in ruins,” Bucklow wrote. Especially if Qantas is footing the bill, eh?

Yet despite Joyce promising that things would have improved by the school holidays, now under way, Qantas remains mired in internal and external chaos as it continues to try to slash costs, including real wages for staff, and extract more money from its customers.

The carrier has hiked fares and dropped travel agent commissions, as airport and online booking chaos – including flight delays and cancellations – erodes its reputation.

Much of this is due to the outsourcing and casualisation of Qantas low-paid baggage handling, ground and security staff that has drifted to more secure work in the tightest labour market seen in Australia for decades.

“That’s having a cascading effect and the pilots that we have been telling us that you know the resulting chaos has meaning that they’re getting tired. They’re having a difficult time managing their fatigue  because of the light flights because of the unexpected schedule changes etc,” Kaine said.

The embattled airline informed travel agents with little warning last week that it would increase both economy and business fares by 4% from July 1.

Joyce warned last month that fares would rise in a large part due to a 100% rise in jet fuel prices over the past year, according to the International Air Travel Associational, though the fuel has fallen 7.6% in the past month.

To add to the pain for travel agents, an industry hammered particularly hard by the pandemic, the limping kangaroo has cut commissions.

 

Qantas on hold – and not just on the phone!

The Qantas campaign of public relations distractions also came as the company issued threats –  that it has denied making –  to domestic pilots that their jobs could also be outsourced, in its bid to get them to sign up to new industrial agreements.

“Pilots have been threatened with outsourcing on the last two EBAs, in both the long haul and short haul awards,” one pilot told MWM. “Given the choice of one vote yes or we make other arrangements. The long-haul contract has been stripped of lifestyle protections such as night credits to help pilots manage their fatigue. Every EBA we are presented with a “business case” or “strategic imperative” that must be met.”

Qantas budget arm Jetstar outsources its pilot training to Canadian group CAE, which runs similar operations for other airlines worldwide. CAE Oxford Aviation have operated a cadet pilot training program for a number of years for Jetstar based at Moorabbin Airport in Melbourne.

A Qantas spokesperson hosed down internal rumours it would take the same path: “We are not planning/considering outsourcing pilot training to CAE.”

In response to pilot concerns the Transport Workers Union this week launched its TWU Pilots division which has vowed to address the biggest concerns pilots are facing: job security, safety concerns around rostering and fatigue management, and pay and conditions going backwards, according to a recent pilot survey.

Qantas Group pilots are angry about being pressured to sign onto substandard agreements under duress through threats of outsourcing. Of the 150 pilots who participated in the survey, 79% have been pilots for more than 20 years and several noted that industry conditions are the lowest they’ve ever experienced.

“Very few pilots would view this as a sustainable career in the long term any more,” one pilot surveyed said. “’We have no job security, are asked to work more for less and have no control of our lives due to rostering practices.’’

Industrial chaos now lies ahead as other Qantas workers are not buying into the new EBAs that will reduce real wages and conditions which come replete with a $5000 per worker “thank you bonus’”, described by unions and workers as a bribe, that converts into a $0 “f*** you” bonus if they don’t sign.

 

Rooing the day: Qantas passengers and crew taken for a ride by the board

The Fair Work Commission has approved an application from the Australian Licensed Aircraft Engineers Association (ALAEA) to conduct a ballot of employees represented by the union, to determine the level of support for taking specific protected industrial action. 

“Over 1000 members across Qantas, Jetstar and Network [Aviation] will consider work stoppages and overtime bans,” ALAEA federal secretary Steve Purvinas said. “The airline has not taken negotiations seriously. There have been years of meetings and no progress.”

ALAEA said Qantas had insulted its engineers by withholding any pay increase for four years and wants a one-off 12% increase that would be equivalent to 3% per year.

 “It’s extremely disappointing the union has taken this step,’’ responded Qantas. “All airlines have been negotiating in good faith on the agreements and the action by the union is completely unnecessary,’’ the airline added, echoing familiar lines over Joyce’s 14-year tenure.

But the promise of brand new aircraft for the domestic market, as nice as the corporate shots of freshly minted jets might be for editors, are disguising the company’s chaos in getting its larger aircraft back in service. Joyce made a stiff rod in the medium term for the company’s own back with its announcement last December that it would largely shift its business from US aircraft maker Boeing to its European arch rival Airbus.

For decades Qantas has favoured Boeing, using its 737 jets, using as its main single aisle workhorse for its short to medium haul flights as well as the 787 Dreamliner for longer haul and high capacity routes. It was reported in May that Qantas’s ‘Project Winton’ domestic fleet upgrade program would begin in 2023.

Qantas has said in December that Airbus planes would now be the basis of its fleet, with a new A220 to begin as soon as late next year, while its A321s will begin deliveries in late 2024. The order also includes purchase options for up to 94 additional aircraft through to 2034.

“The A320s and A220s will become the backbone of our domestic fleet for the next 20 years, helping to keep this country moving,” Joyce said. “Their range and economics will make new direct routes possible, including serving regional cities better.”

This move had pushed Qantas to the back of the queue with Boeing, leaving the future of three 787s parked in the US desert, well not quite up in the air.

Qantas is also struggling to get its other seven A380s, the world’s largest commercial aircraft back into service. Again, it is lower down in the queue for Airbus to recommission the plans than competitors such as Singapore Airlines, Lufthansa and Emirates.

“Three of our 10 A380s are currently flying. A further three will be flying by the end of December and the rest after that,” the Qantas spokesperson said. 

“In addition to the maintenance work required to bring the aircraft out of storage, we are installing new interior cabins on the aircraft and conducting scheduled heavy maintenance checks. We are trying to get these aircraft back flying as quickly as possible but all of this takes time.”

Qantas’ online booking system continues to experience serial problems with a litany of online complaints by customers, and prospective passengers on social media.

#qantas Clearly don’t want any customers. Once again trying to book through the App and online and neither will let me proceed to payment page. Less flights, nearly double the price and continual issues with booking never mind flying. What a shambles. “  businessman Richard Sheppy said on Twitter July 4 Richard Sheppy echoing thousands of online comments

All this chaos, every which way, is on the back of billions of subsidies including unrefunded JobKeeper payments, from the Australian taxpayer via the late Morrison government.

For sure, the airline industry globally is struggling to crank itself back up and there are endless stories across the globe of delays, luggage losses and airport chaos.

But in exchange for its government handouts, Qantas had to deliver precisely nothing. Indeed, its directors have quietly increased their own pay through the two years of staff pay freeze and executives are once again on the bonus gravy train –  as they crush the real wages of their underlings –  that could net Joyce another $10 million-plus payday.

There is, of course another way and the German government has laid it out. Its flag carrier Lufthansa was bailed out during the first stage of the pandemic with a 9 billion aid euro package.

This saw Berlin take a 20% stake in the airline through its Economic Stabilisation Fund but declining to exercise any shareholder voting rights. In return, until 75% of the funding was repaid, Lufthansa was barred from any mergers or acquisition activity and dividends and bonus payments were put on hold.

Unlike Australian taxpayers, who are saddled with the unique situation of a publicly funded, privately owned national carrier, German citizens would get their money back – as well as return on their investment and some shackles on management.

 

 

Michael Sainsbury is a former China correspondent who has lived and worked across North, Southeast and South Asia for 11 years. Now based in regional Australia, he has more than 25 years’ experience writing about business, politics and human rights in Australia and the Indo-Pacific. He has worked for News Corp, Fairfax, Nikkei and a range of independent media outlets and has won multiple awards in Australia and Asia for his reporting. He is a fierce believer in the importance of independent media.

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