Constant conflict

Fourteen hours flying time away from Dubai, Qantas seems to have the unfortunate knack of being in continuing dispute with its staff despite having enjoyed great times on the back of the boom in demand for resources in Western Australia and its near monopoly for domestic business travel.

Perhaps it’s the fact that Qantas paid its staff just $1000 worth of shares and a cash bonus of $1000 after a $1. 03 billion profit before tax for the 06/07 financial year – a 54 per cent hike on the previous year.

If you went to the Qantas website on the evening of May 27 – as Contrails did – and looked at its ‘Newsroom’ section, there were eight news releases for May and no fewer than five related to industrial issues.

Of course there are stark differences between Qantas and Emirates, with Qantas responsible to its unforgiving shareholders and the equally unforgiving stock market, while Emirates is owned by the aggressive and progressive government of Dubai.

However, there needs to be some serious soul searching at Qantas to better motivate its staff so that when the good times roll serious bonuses will flow – not $2000.

And at the same time there needs to be a serious reality check with the unions that the airline industry more than any other is at the cutting edge of the global economy.

Qantas must have the flexibility to operate in markets with local conditions, not with Australian living standards which are amongst the world’s highest.

Australians enjoy some of the world’s highest salaries and without doubt the best lifestyle, and we live opposite a region of some of the world’s lowest salaries and most challenging lifestyles.

This situation puts Qantas at a significant disadvantage, and the airline has not helped itself by being slow to innovate with such things as seat back videos and premium economy seating for the world’s second tallest race.

However, the stand taken by the Australian Licensed Aircraft Engineers Association (ALAEA) in calling into question the safety of Qantas sending its maintenance off-shore to justify its pay claim is regrettable.

As is the pilots stand suggesting that Jetstar hiring offshore pilots is a safety issue.

For Qantas to thrive there must be a far, far better industrial relationship. But who blinks first? Qantas is expected to announce a record $1. 5 billion profit in August for the 2007/08 year, but you do not have to be a rocket scientist to understand that this level of profitability cannot last under current market conditions and as fuel hedging cuts out into the next fiscal year.

There was no clearer warning of that than late May’s announcement of service, fleet and staff cut backs.

When Ansett collapsed in 2001, Qantas CEO Geoff Dixon warned many times that Qantas’s future was not guaranteed and he was, and more than ever – despite Qantas’s record profits – still is, right.

Who would ever have thought in January 1970 when Pan Am launched the world’s first 747 service that just 21 years later it would collapse in an utter shambles.

In August Qantas receives its first A380. Will it collapse in a shambles in 2029? That seems unlikely at the moment, but Qantas will face far more intense competition sooner than it would like, and it needs to do far more to both reassure its staff and inspire them.

Contrails is a big fan of former Air New Zealand CEO Ralph Norris who said: “I don’t care about shareholders.

If I look after my staff, they will look after the passengers and they will look after the shareholders. ” Is it time for Qantas to adopt that mantra?