AFAP Commits Suicide

In The Air, University of Old Press ISBN 0 7022 1983 5) Captain Holt of course was to the AFAP what Churchill was to the Briton of 1940. His style of presidency was to make the eventual AFAP an industrial legend in its own right. He pioneered pilot militancy to new heights unseen almost anywhere in the world air transportation system and shaped ‘his’ Association from a mere handful of disorganised World War 11 veterans into a superb industrial weapon. Thus the AFAP (which grew out of the AAPA in 1959 because the initial organisation was seen by many pilots to be too weak to win the battles of the future) became something that neither government nor employer had ever been able to successfully counter.

Indeed, the figures speak for themselves – in 1946 a senior domestic Captain earned a maximum of $1,800 per annum as against $16,061 by 1968. His First Officer went from $1,100 to $9,914 while Qantas Captains, who were up till 1981 covered by the AFAP, went from $2,650 to $19,018. The push for cash though really began to accelerate in the seventies as illustrated by the fact that in 1973 the average annual remuneration of pilots at the then TAA was $16,011 as against $41,814 in 1979 – a considerable gain in anybody’s language in little over half a decade and one that was the envy of other employee groups.

How the AFAP achieved these massive increases (plus other perks relating to conditions of service and entitlement, etc) was simple. It would literally pick one airline, usually Ansett, off against the other. Simple tactics that almost always worked first time. Reg Ansett always conceded the obvious in that his privately owned airline could not withstand a strike for more than a few days without suffering immense financial damage. TAA would at that time usually still be operating and Ansett’s market share would be rapidly lost to his government owned competitor.

The existence of the Two Airline Policy (TAP) also did not help as Ansett knew that it was technically impossible for TAA to go bankrupt and under the security of the TAP both airlines were virtually guaranteed by Parliament to make a profit at the end of each year. The pilots would make their demands. There would usually be a small strike, a lot of public outrage and then an inevitable reconciliation with the AFAP winning what it had largely sought in the first place. Both airlines would then discretely petition the Government of the day for a fare increase and win it accordingly. For the AFAP it was like living in an industrial Nirvana.

Thus throughout the sixties, seventies and to a lesser extent the eighties, the AFAP perfected an adversarial approach to airline managements that would ultimately sow the seeds of one of the worst industrial disputes in Australia’s history.

The scenario for confrontation had been developing since the mid eighties when the Federal Government began to win widespread support on both sides of the industrial fence for what is generally referred to as the Wages Accord. In an attempt to restrain inflation and limit wage rises to acceptable amounts based largely upon productivity gains within the workforce the Government set about ensuring that all industrial associations and unions remain firmly within the guidelines set by the Industrial Relations Commission (IRC). Basically this Accord has been working well and has even kept the traditionally militant blue collar unions within the ranks of the ACTU at peace. It is perhaps ironic then that the ultimate challenge to the centralised wage fixing system should come from what is a white collar union of very highly paid professionals- the pilots.

However, not so surprising to anybody involved in aviation. What the AFAP wanted it always got and with deregulation on the horizon and their members supposedly being hard done by under the terms of the Accord, the AFAP considered its options and decided late in 1988 to go for broke and move out of the system at the end of the 1988/89 financial year while simultaneously seeking a near one third pay rise to compensate its members for what it saw as an eroded income structure in recent years. Thus in February this year the AFAP laid the groundwork for the coming battle by openly stating to its members via its Deadline ’89 newsletter that it would be a sensible move to cash up around mid year in expectation of a prolonged strike. The airlines meanwhile had just recorded their most successful 12 months in history. Load factors through 1988 were at an unprecedented high and all three major carriers were reporting greatly improved profits. An ideal time for the AFAP to strike and strike hard prior to deregulation and at a Government that they did not think would relish a major industrial confrontation on the eve of an imminent election. They were wrong.

Meetings between the airlines and the Federation took place throughout the winter though it soon became obvious that neither were the airlines able to either economically or legally comply with the AFAP’s demands or for that matter would the Federation concede a defeat. Australian Aviation believes that negotiations between the parties did clear a wage increase to around 15% with certain productivity provisions and a discreet Government endorsement. While this was around half of what the pilots were seeking it was still more than double what the Accord was allowing to the average worker.

The Federation really wanted to move outside of the Government’s centralised wages system so as to be again able to negotiate directly with its employers. What the pilots wanted was to be essentially paid and treated as executives while retaining the right to be able to launch wildcat strikes against employer – a paradox that was not lost on either the Government or airline management which by this time had well and truly had enough of the Federation’s militancy.

Battle lines drawn, the AFAP met through the early part of August at organised stop work meetings Australia wide with its 1,640 airline pilot members. The members were obviously inspired by the stirring speeches made by senior AFAP representatives and in particular by its gutsy president Captain Brian McCarthy, as around 95% of them voted to give the AFAP a full mandate to initiate whatever industrial action it deemed necessary. As mentioned earlier, what the pilots specifically wanted was to move outside the wages system and to be able to deal on a one on one basis with their employers. Also demanded, and totally not negotiable, was a 29. 47% pay increase. What the AFAP did not realise (and many observers feel still doesn’t!) was that the Government could not allow either event to occur. It was simply not negotiable that one union could ditch the successful wages system and seek a wage rise that in most cases was greater than the average worker’s wage in the first place.

Thus, by mid August the Government had well and truly sided with the airlines in full support of whatever action they should choose to take if the AFAP actually called out its members on a full strike. To counter this the AFAP initiated its nine to five system on August 18, only flying between what it referred to as office hours. From their point of view this was a clever tactic. The pilots continued to get paid, most travellers were still able to be flown by scheduled airline flights and it kept public resentment of the pilots actions to what they perceived as a minimum. However, it was at best a fractious situation that had all the portents of blowing up at a moment’s notice, and it did when on the 21st August the IRC cancelled all 11 industrial awards covering the pilots following the AFAP’s decision to ignore a 4pm deadline of the previous day to resume normal airline services. Faced with this development the pilots continued working nine to five and the airlines gave them till 1 0pm the following night to sign individual contracts (without the 29% pay increase) or be sacked. Throughout this period the Government was solidly behind the airlines, so much so that Prime Minister Hawke went as far as stating that he was prepared for a long drawn out ‘war’ against the AFAP. In his ACTU days he had crossed swords with the AFAP on more than one occasion and like the airlines had had enough of their militant attitude. He, and his ministers didn’t have to be told that if the AFAP was successful in not only moving outside the system in such a defiantly public manner but also getting a rise of nearly 30% then his Government’s ability to manage the economy in the coming year was virtually finished.

Meanwhile, the management of both the Ansett group and Australian also clearly realised what was at stake. If the pilots won their claim then the airlines would inevitably be inundated with similar claims by almost every other union covering their operations. They had to win. Historically, it was the very first time that a Government has really backed them to the hilt in a battle against their worst foe – the pilots Federation, and with a rapidly deteriorating domestic traffic base and deregulation imminent (and for the first time ever, real competition) they sensed that this was going to be the battle which once and for all had to break the back of the ultra powerful AFAP.

The industry generally saw this scenario building, as did the Government and most non aviation people we have spoken with, however, oddly enough, the pilots themselves remained oblivious to the fact that this could well be the battle that they all would well and truly lose.

And so on August 22 the pilots refused to honour their contracts with the airlines. The following day the airlines began standing down pilots who wouldn’t fly as directed under the terms of their contracts and on the 24th all 1,640 pilots resigned en masse. The airlines countered by serving writs against a number of pilots for damages though this still didn’t shake the resolve of the Federation. From this moment on they effectively don’t have jobs and the AFAP is now father to a family where half its membership is suddenly unemployed.

From there the dispute worsens by the day as all sides stand firm like never before. It is the AFAP versus the world and even a blind man can see that the AFAP is rapidly tracking on a course towards industrial oblivion. It is publicly disowned by the ACTU, no other aviation union offers it support and the Government moves swiftly to bring in the RAAF and allow foreign airlines access to Australia’s domestic routes. The airlines state emphatically that they are through with dealing with the AFAP, that it is irrelevant and speed plans to bring in chartered aircraft and crews. Australia’s once great air transport industry is in ruins and the jobs and livelihood of tens of thousands of people are thrown into doubt. (refer to Ramifications, later in this story).

So, were the pilots justified in creating the havoc that has been unleashed by their ‘victory at any price’ tactics? Are they underpaid and have they indeed lost income relativity in recent years? Obviously, if you talk with the AFAP (and we at length along with dozens of pilots) you get one set of opinions and yet another from the airlines. We will let you be the judge and print data from a number of sources. However, a pilot’s salary in a given period to some extent is like asking how long is a piece of string as he or she works a varying number of hours under differing circumstances. Hence Captain A does not necessarily earn the same as Captain B despite there similar seniority and aircraft assignment. This problem of direct comparison applies equally to anybody working shifts, or under varying penalty rates, etc.

Ansett quotes its average pilot gross wage for 1988/89 (as derived from group certificates) as $84,500 (figures are rounded for easier comparison) which includes their now redundant F50 pilots. The airline also quotes an average one third ‘on costs’ for each pilot. Other data released by the three airlines list the incomes of 10 Captains and 1 O First Officers (FO). The average of the 1 O Captains is $103,200 for 410 actual hours (88/89) or an average per week of 8. 9 stick hours. The First Officers came in at an average of $62,100 for 466 total stick hours or 10. 1 hours a week. The salaries of the Captains ranged from $84,100 to a high of $126,500 while the First Officers went from $42,400 to

$74,700. The pilots strike back saying that those figures are too high.

They quote, for instance, a mid level seniority 727 Captain earning $67,200 and an FO $40,800. A 737 Captain earning $64,800 and his FO $37,200. A Fokker 50 Captain $44,400, FO $36,000. Boeing 767 Captains earned $76,800 and their FO’s $44,000 though this writer personally knows one 767 Captain who earned $106,000 in the past year at a time when 767 hours were rapidly declining due to the constant substitution of the aircraft for smaller jets owing to the declining traffic base (refer p4 Sept AA).

Either way, Australia’s airline pilots are well paid by general community standards and thus could not expect sympathy from the rest of the workforce as their actions began to cause immense damage to the very industry that for years provided them with a living. According to the airlines the average pilot’s wage had risen by 212% since 1979 as against the national average of only 142%. That the 29. 4% increase was largely in excess of the average Australian’s weekly gross wage is something that had not gone unnoticed by the population at large.

So much for wages. The other thorny matter revolved around productivity. It has long been claimed that Australian domestic pilots fly fewer stick hours than any other pilots in the world. We cannot honestly say that this is true but certainly our pilots do fly less than their counterparts in Europe and North America. Few fly more than 500 hours a year while the average is more in the 350-450hrs regime depending upon aircraft type and seniority However this is not principally the fault of the pilots. Primarily it is as a result of two things. Firstly, aircraft substitution and secondly the basic restrictions laid down by the Two Airline Policy. The latter effectively eliminates any real opportunities for the airlines to creatively deploy their aircraft to maximise their utilisation through any 24 hour period. As both airlines must fly roughly the same number of revenue passenger kilometers between any two points over any period of time then neither domestic can break loose and pioneer new routes without the other being firmly in tow. This reduces aircraft efficiency and as we all know has led to a situation where the passenger generally has to subsidise this enforced lack of creativity by airline schedulers. This naturally also restricts to some extent the hours a pilot can fly.

Aircraft substitution, or demand scheduling as Australian calls it, either involves the last minute cancellation of a flight on a medium to high frequency sector (an Ansett specialty) or more commonly the substitution of a smaller aircraft for a larger one if the loadings aren’t up to scratch. This might well see a 767 being replaced by a 737 or an A300 with a 727, etc. What this means is that crews are assigned to fly via their roster and at the last minute have to go on standby as a smaller aircraft takes their sector. In the rapidly declining traffic base of the first half of 1989 this was most visible with the 767s where in late 1988 they were logging 16 blocks a month compared with only 10 for the period up till the commencement of the dispute. This can also see crews away from home for longer periods than planned and pilots spending much of their time simply awaiting an opportunity to fly – hence the relatively low number of stick hours reported in some cases.

In discussions between the pilots and the airlines, the airlines have always had the option of (a) pilot productivity, or (b) pilot availability. By choosing the latter the airlines dictate themselves that it is obviously (to them) more efficient to practice aircraft substitution as and where required rather than working their individual crews harder. Obviously now they have had a change of heart as the individual contracts offered to AFAP pilots resigning with the domestics do in fact require a greater level of productivity than before.

And what of the new contracts? Essentially they contain the 6% pay increase allowed by the Government in return for 55 stick hours a month. Stick hours are typically the hours logged between start up and shut down (log book hours) while duty time takes into account time dead heading on positioning flights (pro rated at 50% towards the55hrs) and time in briefing and preflight, etc.

Obviously any pilot is ‘working’ for much longer than the time he is merely flying the aircraft. For an F28 or BAe 146 crew the new contracts offer $93,000 for Captains with FO’s on an average 60% of what the Captain grosses. Hours beyond 55 a month are paid at the overtime rate of $141. For a 767 a Captain earns $124,000 with every hour past 55 earning an additional $187. In both cases with increased productivity it is relatively easy for a pilot to actually earn more than the 29% that the AFAP was fighting for in the first place. Gone however is the bidding system, gone are blocks (blocks equal a month’s rostered flying, etc), duty days off remains the same though all rostering is at the discretion of duty pilots and management. In other words, a toey pilot might as well go out and get a taxi licence. And indeed this is the crux of the battle the AFAP indulges itself

In. With the md1v1dual pilots talking on a one on one basis with the airline there simply is no role for the AFAP – it is impotent to the extreme, which is precisely what every airline executive in Australia has dreamt of for decades. As Australia’s airline system heads towards a new era of deregulation the airlines’ are taking a leaf out of the AFAP’s book and fighting fire with fire. After all, it’s not much good earning two thousand dollars a week and being a loyal member of the Federation if nobody will employ you.

The casualties are many with at least a third of the pre dispute pilots not being required in what will ultimately emerge from the present fracus. The individual pilots have lost a personal fortune. All forfeited a month’s pay immediately by resigning without notice, that’s upwards of $9,000 in many cases while that amount is multiplied for every month the dispute drags on and, in some cases, forever as many senior aircrew have simply decided not to return under any circumstances.

For their part, the airlines were losing through September around $20m a week in forsaken revenue alone. They still have massive repayments to make on billions of dollars worth of jets and infrastructure. It will inevitably take them a long time to rebuild customer credibility in the Australian air transport system, while their losses through reduced inbound tourism will also make for very lean years at a time when they were building their fiscal reserves so as to be able to better take on the lean and technically more efficient new entrants come November next year.

The AFAP will be gravely affected for all time irrespective of the outcome. Its airline pilots contribute roughly $1. 2rn a year to its coffers, the 29% increase would have represented a half million dollar windfall for the Federation. If the AFAP has now to rely solely upon its GA members then it had better learn to go on an austerity drive!

However it is inevitable that the AFAP will not die for all time. It cannot as the airline pilots will always require some form of an umbrella body to look after their primary requirements and in particular address various safety matters.

It is here that the Federation, in its pre dispute form will be missed. The AFAP was a useful non aligned and non biased technical body that had representatives on many national and international bodies determining the safety aspects of aviation as we know it. Without that input, and in particular being able to offer a defence of the ‘pilot in command’ actions that take place on a day to day basis, then safety might well be ultimately prejudiced. We hope not, but the following example from the AFAP is worth recounting. Two aircraft belonging to different companies are scheduled to depart an airport at the same time. At takeoff a thunderstorm approaches the airport. One aircraft departs while the other waits 15 minutes for the storm to pass. The following day the safety conscious pilot is required to present himself to management to explain why his flight was delayed, when the opposition’s departed on time.

This kind of interview can be conducted by people who are not always safety orientated and whose primary concerns are commercial results (the kind of mentality that deliberately removes the overwing emergency exits from 747s).

The AFAP is also concerned that commercial pressures, without a strong pilot’s union, will inevitably force budget cutbacks to operations that are not revenue producing such as in various training and safety related functions. Naturally the airlines would refute this and we certainly see no reason why any Australian carrier would jeopardise an expensive aircraft, its crew and passenger wilfully. However, the longer term fear that safety will be gradually eroded is one that needs to be closely monitored.

Like a fight to the death there has been no winners in this most mindless and ill-conceived dispute. The once proud Australian air transportation system and the booming tourism industry that lived beside it lies in ruins as do the futures of many of its principal players. That the AFAP could misjudge a tactical situation in so gross a manner is something that will go down in industrial relations history as being as poorly thought out as Hitler’s attack on Russia in 1941. Indeed, for all concerned the results will be the same.

As this major feature had to be written to meet a late September deadline, we ask readers to refer to our Stop Press section for an updated review of the dispute. We would also like to offer our sincere thanks to the many pilots, the AFAP, airline management and the scores of industry contacts who gave us their time in providing their input and views on this most complex and emotional dispute.

Ramifications – Winners and Losers

• International carriers: Overseas airlines serving Australia have won on two counts. Firstly, they have reaped a bonanza in filling their normally empty seats whilst flying domestic sectors. SIA reports that in the first month of the dispute it carried more than 10,000 additional revenue passengers whilst most other Internationals used their surplus intercity capacity to the utmost.

The second gain for the internationals is that as a consequence of the dispute Australians are now holidaying abroad with demand stretched for holiday packages covering Asia, New Zealand and the Pacific. Air Polynesia and Air Vanuatu have seen traffic more than double during the period.

The downside of course is that these same airlines will no doubt be carrying less inbound visitors to Australia in the coming year as internationally we become a destination of considerable doubt. A mere 20% decline in inbounds would hurt all these airlines considerably, including Qantas. The tourism industry is claiming that perhaps a million less visitors will travel to Australia through 1990 which would be a loss to this nation of around $3bn in much needed foreign exchange. And if this sounds all very esoteric, then remember that it could end up costing you dearly in unrelieved high interest rates through much of next year. Either way all of the internationals will be carefully monitoring their inbound capacity in the coming months.

• New entrants: In terms of meeting their quotas of skilled aircrew, the three aspiring challengers to Ansett and Australian must be sitting back laughing. Not only has the AFAP virtually been put to rest as an extremely powerful union but a sizeable pool of pilots now exists that should more than meet their requirements for many years to come. Whilst some pilots have decided to leave the industry, it is inevitable that in time some of these may well gravitate back to the flight deck by way of the new carriers.

Most importantly, the new entrants will also now be able to hire pilots under their own terms of pay and conditions, rather than those previously devised by the all powerful AFAP. Something that they could have only dreamed about six months ago.

The downside though is again considerable. Certainly all three new entrants will now have a much harder time obtaining the vast amounts of finance that they require. After all, what investor would rush out to tie up hundreds of millions of dollars in an industry that overnight can be reduced to mayhem by the actions of just one small group of its employees, whether they be pilots, flight attendants, refuellers or engineers?

The other factor is that the strike has probably shown a lot of business people that perhaps not all the trips they make are totally necessary. Even if business in general cut back by just 10%, it would mean a significant deterioration in the high yield premium fares that are the very lifeblood of the airlines. The psychological damage caused within the populace in general towards aviation and flying will take a long time to overcome. It may also make the new entrants think twice about chasing the November 1 deregulation deadline and waiting till things settle down a little more. This will be even more relevant if, as expected, the economy and in particular tourism, declines further as a direct result of the pilots dispute. After all, putting up to 40,000 people out of work and placing on hold billions of dollars of prospective resort and tourism development must have an effect somewhere. Only time will tell and we certainly hope we are wrong.

• General Aviation: The big winner has been GA. Anyone with anything bigger than a Baron who hasn’t had the beast flying round the clock hasn’t been trying. Not only has this helped the cashflow of operators far and wide but it has hopefully educated a wide number of organisations and businesses to the value of chartering GA aircraft. Corporate aviation has also boomed and hopefully many businesses will continue to use this highly efficient form of transport where it is appropriate.

The downside is that no doubt many of the younger GA pilots will rush the airlines for jobs on the flight deck of ‘real’ airliners. How many will be accepted and what effect this has on GA is anyone’s guess, at the moment though, it would have to be considerable as GA is already starved of pilots, particularly in the experienced CFI and instructor ranks – the very nursery of the profession. What effect the surplus domestic jet pilots will make if they should choose to enter GA has also to be determined. Stepping down from a Boeing to a Chieftain would certainly take some getting used to!

• Other carrier’s recruiting attitudes: Whatever happens in the long term there is a clear indication that Ansett and Australian will require between 400 and 500 less pilots than they formerly had. Qantas in time may well take some of these, it can now certainly afford to pick and choose as can airlines such as Cathay Pacific, Singapore, Air Niugini and relatively young carriers such as Emirates and the European charter operators. From what we hear though ex AFAP activists and office bearers might as well consider a new career in a non aviation related industry! Government revenue & cost recovery: Both the Federal Airports Corporation and the Civil Aviation Authority have been gravely affected by the dispute as the bulk of their revenue is airline derived. The CAA is losing around $5m to $8m a week as most of its revenue is sourced from en route charges, airways charges and various fuel levies, etc. Whilst GA activity has generally skyrocketed, its overall level of return to the CAA is such that it only barely compensates for the loss of regularly scheduled heavy jet traffic.

The FAG is also losing between $1. 5m and $2m a week due to the lack of heavy jet airline activity. Whilst GA has gone mad in terms of movements at key airports, the FAG landing charge for a Chieftain for instance is only $25 compared with nearly $900 for an A300 and around $300 for a 737. Therefore, total Government losses run between $8m and $11. 5m a week though this will progressively decline as the level of airline activity increases. In the long run though the taxpayer one way or another will be footing this bill.

• The airlines: Ansett, East-West and Australian claim they are losing around $20m a week in forsaken revenue. Furthermore, it is estimated that the final loss tally will probably be so high that it will absorb the carrier’s nett profits for at least the next two to three years in real terms. This assumption also takes into account the reduced level of future activity owing to the downturn which was already occurring (refer Reece, p4, Sept 89 AA) and the decline in inbound tourism now inevitable as a result of the dispute.

The dispute has also torpedoed Australian’s excellent overall recovery in the marketplace while Ansett’s costly launch of its business class was all but wasted. One disgruntled airline official commented to AA that the AFAP had done for the airlines, the tourism industry and its employees, what the Khmer Rouge had done for the people of Cambodia!

• Safety: An emotive issue at the best of times and one that the lay media is always waiting with baited breath to sensationalise. However, with what has occurred some very real and serious safety issues need to be addressed.

Firstly, during the dispute itself the massive increase in GA traffic created a situation where the number of air incidents increased dramatically. BASI report that for a two week period in June the figure was 21 incidents as against 68 in the first two weeks of September. These figures though have to be taken in context as GA activity also increased enormously in the latter period. The CAA quickly responded by increasing its briefing staff and by placing more people in ATC and Flight Service centres where they were most required. Additional people were assigned to ramp surveillance to ensure that aircraft were being properly serviced and maintained.

The other point, and a most important consideration, is that our new airline recruits will not be of the ‘old school system’. By this we mean that they will by and large be a mishmash of aircrew from a variety of diverse backgrounds and nationalities. There will for instance be cultural differences that inevitably will emerge on the flight deck in the manner in which things are done. In recent years both Ansett and in particular Australian moved ahead as world leaders in developing their Human Factors courses which welded their cockpit crew into a highly integrated team. As many accidents and incidents are as a direct result of a breakdown in cockpit/crew procedures and communications, then this is a very real potential problem. It will not be overcome overnight and will obviously take many years to address through a re-introduction of the Human Factors courses so successfully run by the then TAA in the mid eighties (refer p96 Mar ’86 AA). • Airport operators: Concessionaires at the international terminal in both Sydney and Melbourne have seen a significant boost to business as domestic passengers flood the few international flights with domestic sector uplift. However, their compatriots in the dozens of retail outlets situated in domestic terminals have all but gone to the wall. Many have shut, while all have laid off or been forced to retrench staff in an effort to survive. Even the international terminal operators will inevitably suffer due to the expected reduction in international passenger traffic. The status of refuellers varies around the nation though most are paid on a contract basis by either Ansett or Australian whether there is a plane to refuel or not. GA refuellers have enjoyed a boom, particularly on the primary GA airfields while the fuel companies themselves are losing heavily due to a greatly reduced consumption of avtur.

Catering is one of the hardest areas hit. Ansett’s flight catering division was in mid September down from producing 180,000 meals a week to barely 25,000. Contracted suppliers to the various catering divisions have naturally had to absorb huge losses due to the perishable nature of their produce. Indeed, income lost which will never again be achieved.

Car rental companies: In the first week of the dispute car rentals companies were over the moon as stranded business-men took to the road.

However, it was soon apparent that not only had the fleets been redispersed to destinations other than where they were usually most needed but future car rental activity had declined heavily in the wake of the decline in business and holiday traffic. Holiday rentals also are critical in many key tourism ports such as Cairns, the Gold Coast and Tasmania, all markets that dried up overnight as holiday-makers were left high and dry. Budget could well be the first major casualty of the dispute, the last thing it needed in an already decelerating economy.

•Travel agents: Travel agents exist because of one reason, that they eam a commission on the value of your ticket. With few tickets being written, this sector of the industry is indeed in dire straits. As it is, travel agents do not generally exist via high margins. Most are family or small partnership operations with little real profit above the usually medium level wages paid to their small crew. You are in travel really for the perks, not the gold but when the latter all but disappears then the future is indeed glum. It will take them a long time, if ever, to claw their way back to profitability and bury the losses of 89/90.

• Taxi operators: Like everyone else the humble taxi driver is deeply affected. Taxi demand in most cities is reported to be down by around 40%. Hire car operators are in the same boat as are operators of mini buses.

⚫ Hotel and resort operators: Business orientated hotels in the major cities reported occupancy rates as low as 30% during September while hundreds of conventions, both large and small, have been either cancelled outright or hurriedly rebooked in geographically closer venues and scaled down in size accordingly. The loss of revenue to the hotel, entertainment, restaurant and catering industries supporting these ventures is immense. Most affected areas are the more remote locations such as the Northern Territory, all of Western Australia, Adelaide, Tasmania, the Gold and Sunshine Coast, the various north Queensland coastal and island resorts and in particular Cairns where by mid September some 200 permanent and 800 casual staff had aready been laid off. At a time when the peak inbound Japanese holiday season is in full swing along with our own school holidays, most destinations were seeing more than half their normal market evaporate overnight. Occupancy rates at most of the non capital city resorts were down to as low as 20% while all destinations are now offering heavily discounted packages to attract what is left of a decimated market. Again yield suffers as operators attempt to tread water to stay afloat, good for the consumer but a long-term disaster for promoting investment in what is, or was, one of the few bright spots in the Australian economy. In fact, according to the Real Estate Institute, due to the dispute there is presently some $12bn from a total of $19bn of future tourism related developments stalled, much of which will now be either put on the back burner or abandoned entirely. The potential long-term loss to Australia is immense.

Meanwhile, losses are estimated at more than $1m a day on the Gold Coast alone, while Cairns and several of the other more remote destinations may never financially recover, particularly when having to endure such losses at such an early period of their development. Tourism officials estimate that the likely final outcome is an industry wide permanent job loss of around 40,000 with perhaps 100,000 more people losing a sizeable portion of their potential future work opportunities as a result of the pilots dispute.

In the year to June 1989 tourism generated $5. 7bn in foreign exchange in an industry that produced some $22bn of activity overall in that year. Tourism and directly related businesses employed 440,000 people with at least 120,000 of these jobs being directly attributable to the massive boom in inbound tourism in recent years as every international visitor spends an average of $1,700 whilst in Australia. The Australian Tourism Commission now expects it to be at least 1993 before we regain, if ever, the inbound traffic of 1988. Inbound tourism alone contributed 1. 5% of our total GDP last year while the industry as a whole was responsible for 5. 6% of GDP-a turnover more than twice that spent on defence! Present losses are estimated at $35m a day with a projected loss of $600m over the coming six months because of cancellations that have been lost forever. Australia simply has become a ‘no go’ destination, one that overseas tour wholesalers simply cannot rely upon anymore.

As a timely measure of damage control, the Federal Government has pledged to allocate $20m to be spent in the coming year to promote Australia abroad with a further $10m to be spent on promoting the domestic market.

• Coach and rail operators: Long haul coach operators are laughing as they have naturally become a primary means of travelling between the major cities. However, their short haul cousins are paying dearly as regional tourism falls away to nothing. While many have added their capacity to the long haul fleets, many own coaches which are not suitable for prolonged interstate operation. Rail is also booming, perhaps a portent to the future when very high speed intercity trains will give shorthaul aviation a real run for its money in the years to come.

• Telecommunications: Big winners here, in fact the market share that Telecom has attracted over to such things as teleconferencing will stay with it for years to come. Indeed, if the dispute did anything, it showed the business community that technology can in some cases compete with actually ‘being there’. If even a 10% overall business traffic decline results in the long term through this change in attitudes, then the airline’s are in trouble. Ten percent for instance represents more than 20 premium fare passengers on a typical peak time domestic widebody flight. Meanwhile, STD and fax traffic has increased greatly also resulting in a revenue boon for Telecom.

Courier companies have also experienced an increase in traffic though the problems they were suffering in making their complex overnight systems work during the first weeks of the dispute would have absorbed much of the additional profit earned from any longer term increase. Overall though, increased use of couriers, fax, teleconferencing and STD will have a marked impact on the airlines for a long time to come.

• Airline employees: Airline employees have generally been lucky in that the Federal Government rapidly stepped in to assure the airlines that it would stand by them in terms of compensation in return for not issuing stand down notices to the bulk of its 21,000 employees. This is expected to cost the Government around $1. 5m a week though the figure itself appears rubbery at best and its precise means of payment is somewhat unclear.

Employees though have been greatly inconvenienced. . Those working where overtime and penalty rates apply, etc have seen their incomes slashed dramatically. Flight Attendants are one such group that have seen more than a third of their gross income disappear overnight for the duration of the dispute. Others have taken leave or leave without pay. Either way many have been forced into taking holidays at a time when they did not want them. Some who have taken second jobs will undoubtedly leave the industry permanently.

• Regional airlines: Following the decimation to their business in the first half of this year due to the ATC problems at firstly Sydney then Melbourne, regional operators have at least been able to use the dispute to their advantage.

Operators like Kendells, Eastern, Sunstate and Hazeltons have every aircraft they have in the great airlift. However, many people have simply been turned off flying at all and thus loadings on some ot their regular routes are lower than the norm. In the long term they too will suffer as Australians per se are turned off air travel as a reliable means ot communications, particularly it the Sydney ATC woes of the past continue into the summer. $ The Services: Beazley Air, as it has been affectionately caiied, has performed excellently throughout the dispute. The benefits here are an increase in flying hours tor the younger members of aircrew who are at least learning the air routes that many will inevitably ply later in life as airline captains!

The big plus for the Services though is in the military airlift’s public relations value. Passengers, irrespective of their age or purpose of travel were extremely impressed with the effort made by both the air force and navy crews and following on from the excellent press given to K89 represented a considerable PR boost for our defence forces in general.

Another winner were the various Squadron messes. The sale of souvenirs on board the Heres, 707s and 748s met an enthusiastic response from the civilian public and will no doubt make the Christmas of 1989 the best ever for the mess funds concerned. Good on them!