“Our” Airline

I am broadly sympathetic to the Qantas engineers’, and pilots’, and baggage handlers’ concerns over job security, but Purvinas’s comments are surely a spectacular own goal. People are now stopping flying Qantas, and if there is one thing fewer passengers means, it is increased job insecurity for Qantas staff.

Interestingly, no less a figure than Tourism Minister and former head of the ACTU Martin Ferguson described Purvinas’s recommendation to not fly Qantas “as un-Australian and a sad reflection on his leadership of the licensed aircraft engineers”.

Interesting too were comments the ALAEA boss made in a recent interview with The Australian: “It really drives me to the point where I find it very hard to sleep because I want to spend every waking hour making sure that these bastards don’t get away with what they are trying to do to destroy our airline. ” Those comments really go to the heart of this industrial dispute, plus point to the deep animosity between Qantas management and at least some of its workers.

The notion of “our airline” is a fascinating one. It is business management 101 stuff that companies try to engage staff such that they have a sense of ‘ownership’ of the company and an engagement with its brand.

Clearly Qantas has that sense of staff ownership in spades, but to such an extent that there is a disconnect between what staff and management see as the future of “their” company, and whose company it is to make decisions for in the first place, leading instead to strong disengagement between staff and management, and the situation we have today of increasing industrial action and outright acrimony. And that’s really borne out by countless Qantas staff engagement surveys, where the number of staff who are “proud” to work for Qantas is very high, but measures of engagement and motivation rank much lower.

Understanding that paints the industrial disputes Qantas is facing in another light – it is a battle over the future of the airline, and who has the right to control that future, not over pay and conditions as such.

It is a battle over whether Qantas can establish operations offshore, it is a battle over whether Qantas can use contract (ie cheaper) labour, it is a battle over with whom and under what circumstances Qantas can codeshare.

“Make no bones about this, this strategy of the management team is to offshore and outsource the company into nonexistence,” AIPA vice president Capt Richard Woodward told media on October 13.

But I can’t see how Qantas management will yield on this key sticking point of giving away the flexibility to manage and structure the company as it sees fit. They just won’t.

It is interesting to look at the three main cost areas for an airline – aircraft capital costs, fuel and staff. Qantas has been pretty successful in the first two areas – its strategy is to buy aircraft in bulk (witness the big 787, A320 and to a lesser extent 737 orders of late) to maximise its buying power, and it is as successful as any other airline in the world in managing its fuel costs through hedging. But the stark reality is, in the area of staff costs, Qantas ‘legacy’ mainline staff are well paid, compared to both the airline’s international and domestic competitors.

Sadly, is not about whether a Qantas captain is “worth” $300,000 a year or a senior LAME $150,000, because of their undoubted experience, training and expertise. Most Australians would agree that they should be well remunerated for their expertise and skill.

But the simple fact is the ‘market’ is starting not to be able to bear those costs. That fact – plus the Australian government’s open skies policy opening up access to Australia to international airlines, many of which are government owned/backed – is just the reality of the world we live in.

Remember, four out of five people travelling in and out of Australia aren’t prepared to pay the price premium to fly on Qantas.

It’s just a tragedy that good, hard working Qantas staff are getting caught up in the structural readjustments that that reality is causing. But sadly, that’s life in business, as any ex Ansett (or ex Pan Am or ex Sabena) employee would know.