Death by a thousand cuts

the catalyst for Joyce’s ‘nuclear option’ – a lockout and grounding of the airline.

What a shocking option that proved to be.

I well know that shock, as I was directly affected. As circumstance would have it I was in the US on a media trip when the Qantas grounding was announced. It was about 2. 25am when I received the text message from colleague Andrew McLaughlin: “QF has grounded its whole fleet immediately until unions withdraw claims!!!”. In the fog of awakening from a deep sleep it took a few minutes to process the news. And then a few minutes more for the realisation to sink in – ‘hang on, I’m meant to be flying home on Qantas tonight!’ Perversely, in hindsight I am actually glad that I was caught up in the grounding. Personally I wasn’t too disrupted in the end. It came at the end of our trip, not the start, so our plans weren’t too interrupted, and in the end I was only (!) 30 hours late getting home, and I got to experience the biggest story in Australian aviation since the Ansett collapse from the inside.

After it became clear that the grounding was a tactic on the airline’s part to get Fair Work Australia to intervene with the aim of getting all industrial action terminated, we decided to wait the grounding out. For most in Australia, the Fair Work decision to terminate all industrial action and order Qantas back into the air came after 2am in the morning, but it was 10am in Texas, and I was

able to follow the Fair Work decision on Twitter. Amazingly, given the complexities of turning an airline off and back on again we were on a plane home – the infamous QF8 no less, the much maligned Dallas/Fort Worth-Brisbane service that has suffered some high profile diversions to Noumea and Fiji – 16 hours later.

The flight home was a fascinating experience, being able to chat to fellow passengers and some of the Qantas crews about their experiences with the grounding event and their reaction to it. Universally the passengers – the few that were left at any rate, there being only 70 or so on our 747 as most of those booked on our flight had found other ways to get home – praised the Qantas frontline staff for how they’d been looked after in being put up in the airport hotel. But not a single passenger had received official notification from Qantas about the grounding – whether a text message, email or phone call – everyone had found out either through the media or from friends and relatives.

As for their attitudes about the decision to ground the airline, much as it seems in the community at large, some passengers were scathing of Joyce’s decision, others praised him.

As for the crew, I think there was a feeling of relief that the grounding was shortlived and that they were back flying again. I don’t think there is any doubt that most Qantas staff take pride in what they do and where they work. But this whole dispute has highlighted a critical issue – uncertainty.

For me – and no doubt my fellow passengers stranded by the grounding – I experienced a brief period of uncertainty after hearing about the Qantas grounding, before it became clear the role that Fair Work

would play. Seemingly stuck on the other side of the world, when was I going to get home? How was I going to get home? But that was shortlived. For Qantas staff, the uncertainty lingers.

We’ve long highlighted in AA – and again in this issue – Qantas’s shrinking international marketshare (now less than 18 per cent into and out of Australia) in the face of extraordinary competition from the world’s best airlines – Singapore, Cathay and Emirates among them – with huge advantages of geography and cost bases that Qantas doesn’t enjoy. And now Qantas has reacted to that, and the airline’s loss making international operations, with job losses, route cuts, and aircraft retirements and deferments plus new Asian expansion plans.

For the business all that is great strategy, but for the core Qantas brand, to the staff there, that’s a powerful message of decline – fewer jobs, fewer future opportunities, greater job security uncertainty. No wonder the ALAEA, TWU and AIPA wanted job security clauses in their new EBAs. The 1000 jobs cuts and fleet reductions were just Stage 1 of Qantas’s restricting plans. What would Stages 2 and 3 then look like, how many more staff and job cuts will follow? And by all reports, the grounding has exacerbated that sense of uncertainty, with a hugely damaging affect on morale.

But of course, Qantas was never going to accede to job security clauses in the EBAs.

No business would, nor should, have the flexibility for how it manages its operations constrained in that way. Again, as we’ve written before, and as ex Ansett employees know full well, there is no absolute certainty in the airline business,

and airlines need to be able to react and change course to rapidly changing environments and circumstances.

So this dispute was always going to come to some sort of climax. Not being an expert on industrial relations law I didn’t see the grounding coming, and nor I suspect did most Qantas staff. But this dispute was always going to come to a head, and Qantas was always going to have some sort of ‘Plan B’, as management and staffs’ positions were plainly intractable.

I understand why unions want job security. We all do. But there is no such thing any more.

And I get where management is coming from too, and dealing with intransigent union leaders must be incredibly frustrating.

Qantas is first and foremost a business. And like in any business what’s good for the business has to come first. And artificial constraints on how a company can use its workforce (beyond the bounds of fair terms and conditions) are not in any business’s best interests, let alone one that operates in such a competitive and fast changing environment as aviation.

So what is best for the Qantas business? Clearly an engaged, motivated, productive and affordable workforce is now at the top of the list.

How to get that in a time of structural change – and make no mistake that is what we are witnessing, fundamental change at Qantas – and after the trauma of the grounding and the bitter acrimony of the industrial dispute, is the key question.

Ultimately though, that is Alan Joyce and his management team’s task. Union leadership will argue for their own vested interests. Only management can provide real leadership for the airline as a whole and all its stakeholders – not just staff, but shareholders and customers too.

But after the rending divisions of industrial action and the grounding, can they achieve that? Qantas needs to sell its vision much more clearly, sell the need for painful but necessary reform, and give staff a sense of common purpose and ownership of that vision. Currently, there’s no sense at Qantas that ‘we’re all in this together’. Instead, Joyce’s prophecy of the airline – at least the Qantas branded bits – suffering a death from a thousand cuts – diminished meal service levels, diminished cabin crew to passenger ratios, diminished long haul flight options, diminished inflight movie options, diminished first class options, diminished options to redeem frequent flyer points, diminished staff engagement – is coming true. And instead, the growth story from the Qantas Group is all about Jetstar and the new Asian premium airline project, not Qantas itself.

The need for change at Qantas has to be honestly and clearly communicated by management – what is the vision and future for Qantas, what is the role of Jetstar, what will the airline look like in a decade from now? And unions need to be realistic about the realities of the commercial environment Qantas operates in. (Emirates the other day ordered another 50 – yes 50 – 777s, to join 95 already in service and 40 on order backlog, not to mention the 90 A380s it has coming. It is amazing what having to pay no corporate tax, and being within reach of 85 per cent of the world’s population by one direct flight allows you to achieve!) As Qantas likes to point out, passengers now have certainty that they can book flights without fear of industrial action disrupting their travel plans.

But for the airline’s staff, much uncertainty remains.