Issue 53: November/December 1989

It now seems incredible to look back on what was a massively successful industry just a few months ago. Tourism in Australia was booming and though the present year was not without its problems (refer last Reece), most of these were expected. The airlines, both domestic and international, were profiting nicely from this boom which began in the mid eighties when the world finally discovered that this wonderful land was a safe, happy, good value and reliable holiday destination.

The benefit of this influx of visitors was to be felt throughout the community as tens of thousands of new jobs were created to cater for what is the world’s largest industry-travel and tourism. For the 1988/89 year tourism generated some $22bn of activity, more importantly it earned us $5. ?bn in desperately needed foreign exchange and provided direct jobs for some 440,000 people, 120,000 of these as a direct result of the waves of overseas visitors. The entire industry contributed 5. 6% of our GDP in 88/89 while the inbounds represented 1. 5% of total GDP -Australian tourism had come of age and with it an industry that was both labour intensive and also able to boost our dwindling reserves of foreign exchange.

That has now all gone. Whatever the final outcome of this most unnecessary and poorly executed dispute (it is technically not a strike as the pilots resigned before they could go on strike), the fact remains that the damage, both short and long term, to our image overseas has been catastrophic. Overseas tour wholesalers plan up to a year ahead. They must have specific data on what their packages can offer. To sell costly packages to a country that cannot even offer a viable domestic airline schedule is something that they simply could not be bothered doing. It is simply easier and potentially more profitable to concentrate on the vast array of other more reliable destinations fighting for the international travel dollar. What the People’s Liberation Army did for Chinese tourism in Tieneman Square, the AFAP has literally done for Australia.

Indeed, it will take a long time to get Ansett, Australian and East-West back into full operational trim and when that happy event does take place, then there is likely to be a reduction in air travel that will take us back a decade or more in capacity terms.

If one thing has emerged from this dispute, it is simply that many business people have perhaps been making trips that could often have been handled via the phone, fax or by teleconferencing. If there is even a 10% downturn in the level of high yield premium fare business traffic, then this will impact the airlines’ revenue base greatly. Over the past year, with the constant traffic hassles at KSA, most business people, for instance, have had to take the 7am flight, from say Melbourne to Sydney, to be able to make a 1 0am city appointment. They previously used to be able to take the 8am with confidence and this extra time, the very early mornings and late nights have all made flying certainly less pleasant and less productive than it formerly was. With a phone in his hand, and the company saving a mint, business will now have to be seduced back to the airways with nothing less than guaranteed on time performance, service, value for money fares and system reliability.

Another major development is the boost to the fortunes of the regional airlines. All have profited from the dispute in that they have been able to increase their uplift via flying the mainline routes while now many of the larger operators will begin to take over the turboprop runs of their major ‘partners’ as Ansett and Australian trim down and begin to concentrate purely on jet operations. Ansett’s axing of its fiscally doubtful Fokker 50 Tasmanian operations in favour of Kendell Airlines is a typical example of what the future was to hold this time next year when deregulation was officially launched. In many ways the present dispute has allowed the major carriers to initiate some of these politically sensitive actions earlier than planned as the cessation of Tasmanian Fokker services came as no surprise.

As for the pilots and the AFAP, well there are not many people in this country who sympathise with their plight. To the 18 year old in Cairns who was attending a tourism training course and was working in one of the new resorts in the hope of making this a profession of the future and is now laid off, then the pilots’ actions are something that he, and his parents, rightfully can feel hostile about. Sadly, he is but one of thousands of young Australians who have been similarly affected.

While the pilots may be highly professional specialists and working in a technically complex industry, they still don’t have the legal or moral right to hold the entire airline industry – along with its 21,000 other employees – hostage just because they demand a near third increase in salary. That most already earned between three and four times the national average adult wage and their increase (which incidentally was only withdrawn on the 49th day of the dispute) was beyond the average worker’s gross salary is something that was not lost on the population at large. To want to be treated and reimbursed as senior executives whilst retaining the right to initiate wildcat strikes against your employer is something that is just not on. Certainly the victory at any price attitude of the AFAP left a lot to be desired. That it took the AFAP till late September to even begin to realise what most Australians appreciated fully from the end of the first week of the dispute – that it was not going to win- is something that the individual pilots should query their leadership about.

The pilots also complain of the ‘shoddy treatment’ that the airlines have handed out to them without appreciating that an employee/employer relationship is a two way street. With the pilots destroying the profitability of the airlines by working only a nine to five shift whilst maintaining their own salaries is hardly conducive to stimulating the generosity of the employer. Similarly resigning en masse and bringing the entire industry to its knees might also be construed as ‘shoddy treatment’ from the viewpoint of the pilots’ co-workers, let alone the travelling public of Australia.

Like a Shakespearean tragedy, this unbelievably damaging dispute has completely changed the face of Australian aviation for all time. It will simply never be the same again and for this we are all the losers.

An in-depth seven page analysis of the dispute and its Ramifications begins on page 18 of this issue.