The Guardian 4 June, 2008
QANTAS: Flying mean and nasty skies
Bob Briton
The same week Qantas announced it was on track for a record $1.4 billion annual profit, the airline announced the scrapping of several services and said it would be making make deep cuts in staff numbers. Management blames fuel prices for the measures and, through company CEO Geoff Dixon, has said that if the price per barrel for oil drifts up to $US200 "all bets are off".
The airline is holding doggedly to its plan to keep non-executive annual wage increases to a less-than-inflation maximum of 3 percent — a pay cut in real terms. Qantas claims that about 40 percent of its workers are now locked into enterprise bargaining agreements with the wage-cutting cap. At the same time, the federal government has given the green light to hire 75 guest worker (457 visa) pilots onboard Qantas’ budget carrier Jetstar along with another 60 cabin crew.
Qantas further said that if it is not happy with the $1.5 billion "efficiency" program it has unleashed then more radical measures would be imposed. Workforce cuts may not be achieved exclusively through redundancies. Some of the airline’s functions would have to be moved offshore.
Unions rightly smell a rat. The talk of moving operations offshore is clearly directed at aircraft engineers who last week held stopwork meetings in Sydney, Melbourne and Brisbane. Members of the Australian Licensed Aircraft Engineers Association (ALAEA) needed to consider what to do about Qantas’ intransigence towards their modest 5 percent per annum pay claim. The company had cancelled a meeting to discuss the current standoff.
While the engineers met, "management" engineers took over their duties but could not prevent disruption to services and the cancellation of some flights. An offer from the union to keep a skeleton workforce in place was refused. Qantas is keeping plans for the use of an outside scab workforce handy. In response to the latest action by engineers Qantas Chief Executive Geoff Dixon was suggesting a weird moral equivalence existed between the actions of workers and their bosses in the long-running dispute:
"The union has every right to call this strike and we have every right to resist it and use everything the law allows us to do to keep our airline running," Dixon told The Sydney Morning Herald last Friday. "We have our contingencies."
Unions point out that while rising fuel prices are a challenge to the profitability of airlines around the world, Qantas is well placed to meet the challenge without robbing workers of their jobs or the value of their pay packets. Qantas is the only full service domestic airline in the country. It has locked in the price of 59 percent of its fuel for 2008/09 at $US112 as older hedging arrangements lapse. At shareholder meetings, Qantas bigwigs have boasted of the company’s ability to deal with fuel price increases.
Like its competitors, Qantas has increased the fuel surcharge and ticket prices — twice in January alone. It is reported to be on the verge of spinning off its Frequent Flyers program to access more capital. It has increased its market share by 2.2 percent over the past year and, as pointed out previously, boosted profits by a massive 40 percent. The company is planning for increased baggage volumes and is advertising for handlers to work at Sydney airport’s ramp services section.
Companies like Qantas strategise. They know that blips like the SARS outbreak in 2003 and the hysteria following the terror attacks of September 11, 2001 will be evened out by future profit-taking opportunities. Qantas is using present legitimate concerns in the community about rising fuel prices to lock in some long-term gains for shareholders and their lavishly overpaid management elite.
The company has wanted to move major aircraft maintenance offshore for some time and get it done on the cheap. The threat to even higher profits posed by rising fuel prices is being used to strengthen their hand. The company has kept its Jetstar pilots on lower pay rates than their Qantas colleagues in the face of union demands for pay justice. What better way to quieten them down than an influx of guest worker pilots and crew? "We are in a global industry and we should be able to source a global talent pool," Jetstar CEO Alan Joyce told The Australian Financial Review, forgetting for a moment that a shortage of local pilots was supposed to be the sole factor behind the move.
Qantas has shocked the public with the strength of its language during the dispute with its engineers and revealed its ruthless drive for maximum profits — a drive it shares with the other owners of capital in our unjust socio-economic system. The collateral damage from its latest offensive will be widespread. Small businesses on the Whitsundays and the Sunshine Coast expect $108 million to be taken from the regional economy as a result of changes to Qantas and Jetstar routes.
Unions representing Qantas’ employees, like the Transport Workers Union, are demanding that the company comes clean about how many workers are being lined up for the sack and from which sections.
The wife of a Qantas worker spoke for many recently: "With the price of everything going up, my family doesn’t need this insecurity. I just want to know whether my family will be one of those who have lost out thanks to Qantas management. These are the same people who were happily going to pocket $300 million last year when the company was going to be taken over."