Cheat sheet: Qantas vs the unions

UPDATE: An unprecedented 12-hour session of the Fair Work Australia Tribunal late last night ordered an end to the industrial action of all three unions and Qantas and demanded planes be put back in the air after safety clearances were received. Qantas will fly again sometime afternoon today and CEO Alan Joyce has claimed victory in the dispute. The decision was made shortly after 2am. The unions and Qantas will now be forced into 21 days of negotiations.

Here’s the original story:

The Flying Kangaroo is grounded, but what grounded it? (Well, Alan Joyce did, but what came before the decision?)

As we wait for the Fair Work Australia tribunal to make a decision on the dispute between Qantas and the unions, lets find out more about what’s brought us to the situation where all international and domestic Qantas planes have been left idle.

Who are the unions?

That would be the Transport Worker’s Union, Australian and International Pilots Association and the Australian Licensed Aircraft Engineers Association. These unions collectively represent the members like engineers, pilots, ground staff and baggage handlers who have been participating in the rolling strike action during pay negotiations.

How long have the strikes been going on?

The first public rumblings began in July this year (2011) when some Qantas international pilots angered the airline by making in flight announcements about their pay dispute with management. It was the start of their first industrial action in 45 years. The first strikes (involving the other unions, pilots have not gone on strike) began in August. That was after the situation escalated with this…

Qantas announced plans for a restructure in Asia.

This is at the centre of the entire dispute between Qantas and the three unions. CEO Alan Joyce announced that the future of the airline depended on successfully moving into Asia, including with a premium new airline in South East Asia bankrolled by Qantas but not bearing the Qantas name or mark. The move would come with 1000 job cuts in Australia, which management said was ‘necessary’ for the restructure to work. The plans also include Jetstar making a bigger (and cheaper) push into North Asian markets, especially Japan.

Mr Joyce said at the time: “We are coming up to the 10th anniversary of Ansett’s collapse – it’s very important for us to recognise the mistakes of the past, very important for us to recognise that great brands can disappear. And if great brands do not change, they will no longer be around and they have no right to existence. I want Qantas to be around for 90 years.”

So what do the pilot union want?

They want jobs kept in Australia, first and foremost. Nathan Safe is a Qantas Pilot and spokesman for the Australian and International Pilot’s Association (AIPA) and said: “‘If you think safety is expensive, try having an accident.”

Here are some of the pilot’s demands relating to pay and conditions, according to Qantas.

Same pay and conditions for company pilots flying Jetstar as for those flying long-haul Qantas international routes

2.5 per cent increases in wages each year for the next three years.

Two free of charge international economy tickets each year (upgradeable to Business and First), in addition to already heavily-discounted airfares for them and their families, and at the expense of paying customers.

That Qantas funds two full time union officials at a cost of up to $1 million per year.

Discounted membership to the Qantas Club for all pilots and their families

The AIPA rejected most of these claims, however.

“For the record, AIPA is claiming a pay increase of 2.5 percent a year (less than inflation), no additional ‘free’ flights (but rather, we have indicated a willingness to purchase two economy tickets per year for all Long Haul pilots at agreed rates) and our claim has nothing to do with Jetstar pilots. In fact, the anonymous Qantas PR professional who wrote this email failed to once mention the actual issue being fought over in this dispute: a Qantas flight/Qantas pilot clause.

AIPA is in this dispute because of one issue and one issue only: the right of Australian Qantas pilots to continue operating Qantas flights.

Far from demanding unreasonable perks, we are willing to negotiate on all sorts of efficiencies and productivity measures in order to achieve a written agreement on job security. So far, however, management has refused this claim.”

So, what does Qantas say about that?

This, from the Qantas linked website Keep Qantas Flying:

“Qantas pilots are amongst the best paid in the world, receiving over 30 per cent more on average than a Virgin pilot flying similar aircraft.

The average Boeing 747 Captain earns approximately $350,000 per year (including superannuation).

The average Airbus A380 Captain earns almost $400,000 (including superannuation).

The average Qantas long-haul pilot is rostered to fly between 16-17.5 hours per week.

They receive six weeks annual leave plus 25 sick leave days per year.

They enjoy heavily discounted staff travel including upgrades to Business and First.”

Qantas rejects the AIPA claim that non-Qantas pilots are flying Qantas routes.

And the engineers and ground staff?

They want pay rises that match inflation (and say they have been offered less) and job security, which both unions say other businesses including Virgin have agreed to for its own staff. The engineers in particular want to stick with maintenance regimes that they say are superior. Qantas says engineers are clinging to the past and their refusals to adapt to ‘superior maintenance’ regimes are hurting Qantas.

What is Qantas ‘the business’ like?

The half-yearly results to December 2010 provided a pre-tax profit of $417 million with revenue of $7.6 billion and a cash balance of $3.3 billion.

But the international arm of Qantas is a loss maker.

But Qantas says it’s operating in a global environment with massive competition from other airlines, some owned by foreign Governments. It says it’s offering Australian rates on airfares when others can undercut and needs to tighten its belt to remain in the air … and guarantee the jobs of some 35,000 employees.

The unions say Qantas can remain competitive by treating its employees well and maintaining the record of quality it has stringently built up over 91-years of operation … but this cannot be done if jobs are taken overseas .

What’s the damage so far?

Since all flights were grounded yesterday some 68,000 passengers have been affected, 108 aircraft grounded equating to 447 flights. This action is costing Qantas $20 million a day but in terms of the flow-on costs to the economy and tourism, not to mention the reputation of the brand, that remains unseen.

This discussion is helpful: