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In the early hours of October 31 Fair Work Australia, the country's independent industrial relations tribunal, ordered that all industrial action taken by Qantas and the involved trade unions be terminated immediately. The order was requested by the federal government amid fears that an extended period of grounding would do significant damage to the national economy, especially the tourism and mining sectors. It is estimated that the grounding affected 68,000 customers worldwide.<ref>{{cite web|url=http://www.abc.net.au/news/2011-10-31/qantas-action-terminated-fair-work-rules/3609158 |title=Qantas to fly after dispute terminated - ABC News (Australian Broadcasting Corporation)|publisher=Australian Broadcasting Corporation|accessdate=31 October 2011}}</ref>
In the early hours of October 31 Fair Work Australia, the country's independent industrial relations tribunal, ordered that all industrial action taken by Qantas and the involved trade unions be terminated immediately. The order was requested by the federal government amid fears that an extended period of grounding would do significant damage to the national economy, especially the tourism and mining sectors. It is estimated that the grounding affected 68,000 customers worldwide.<ref>{{cite web|url=http://www.abc.net.au/news/2011-10-31/qantas-action-terminated-fair-work-rules/3609158 |title=Qantas to fly after dispute terminated - ABC News (Australian Broadcasting Corporation)|publisher=Australian Broadcasting Corporation|accessdate=31 October 2011}}</ref>

The disruption caused to passengers is a good example of why passengers should generally choose non-union airlines, such as [[Delta Air Lines]] and most [[low-cost carrier]]s, when possible.


===Response of competitors===
===Response of competitors===

Revision as of 17:34, 30 October 2011

A Qantas Airbus A330 at Perth International Airport (2008)

The 2011 Qantas trade union disputes are an ongoing series of disputes between the Australian airline Qantas and a number of trade unions. The disputes began at the start of 2011, when the airline announced its intentions to focus its operations on Asia. Prior to that, workers were holding meetings about wage issues and job security. As a consequence of the announcement, engineers, pilots and baggage handlers carried out a number of strike actions, culminating in the unprecedented Board decision, on 29 October 2011, to ground the entire Qantas mainline fleet and lock out its employees.[1]

Background

Beginning in the 1980s, deregulation and privatisation of the airline industry left Qantas unable to compete due to the high wage levels, high staffing levels and costly working conditions that were won by unions when the company held a near monopoly within the industry. Setting up Jetstar Airways, its own low-cost carrier, helped Qantas to survive deregulation but by 2011 the airline had gone from being the primary international carrier to Australia, to retaining less than 20% of international market share. Unable to sustain an adequate rate of return on its capital, in 2011 Qantas announced that major structural changes would be made, leading to union unrest.[2]

Qantas has experienced a number of strike actions during the past few years. In 2008, for example, members of the Australian Licenced Aircraft Engineers Association (ALAEA) opted to strike over Qantas' refusal to grant a pay rise. This resulted in 35 flights being cancelled.[3] In early 2011, Qantas again started to experience disruptions to its operations. In the nine months leading up to October, airline employees held 200 meetings during which they demanded better working conditions, costing the airline A$68 million according to its chief executive officer (CEO) Alan Joyce. [4]

On 11 July 2011, long-haul pilots registered with the Australian and International Pilots Association (AIPA) voted to take protected industrial action against the airline, for the first time since 1966. The president of AIPA, Barry Jackson, said the aim of the action was to guarantee that Qantas long-haul pilots would fly Qantas long-haul flights. "The issue that pushed us towards taking protected industrial action is a fundamental one – keeping Qantas pilots operating Qantas flights. We now have a management team in charge who believe you can shift operations to Asia, outsource the jobs of Australian Qantas pilots and not do any damage to the Qantas brand in the process."[5]

Announcement of new strategy

On 16 August 2011, Qantas announced plans to refocus its markets on Asia and move away from the North Atlantic which had been the airline's traditional market.[6] The airline said that it would establish Jetstar Japan as a low-cost carrier; and a premium carrier to be based at either Singapore or Kuala Lumpur.[7] At the same time the airline announced there would be 1000 job losses.[8] These plans are expected to return the airline to higher profits through increasing the market share.[9] Australian Council of Trade Unions secretary Jeff Lawrence described the day as the "darkest" in the airline's history.[8]

Grounding and employee lockout

At a press conference on 29 October, CEO Joyce announced the immediate—and unprecedented[10]—grounding of all Australian domestic and international Qantas flights, effective 5pm AEDT, and the lockout of the airline's staff, beginning at 8pm AEDT on 31 October, in response to continued union action against the company.[1] Joyce said that Qantas subsidiaries Jetstar, QantasLink and JetConnect would not be affected by the grounding, along with Express Freighters Australia and Atlas Air freight aircraft (operating on behalf of Qantas Freight and Australian air Express).[11]

Qantas said it would reimburse accommodation costs for those left stranded by the fleet grounding, and refund those who were expected to fly with the airline .[12]

Impact and response

Following the abrupt announcement of the suspension of operations, all Qantas aircraft already on the ground, regardless of whether they were in maintenance or serviceable, were grounded and all passengers who had boarded aircraft were instructed to disembark and collect baggage. Multiple reports suggested that some aircraft turned around during taxiing for take off.[13][14] Flights that were in the air at the time of the announcement continued to their next destinations and were then grounded. The lockout was expected to affect 68,000 to 80,000 passengers in the first day,[15][16][17] to result in the cancellation of 600 flights and to cost the airline in excess of A$20 million each day.[17] Bookings of 17 heads of state attending the Commonwealth Heads of Government Meeting in Perth were also affected.[18]

The grounding by Qantas of the entire fleet of 108 serviceable aircraft, which allowed Qantas to enjoy a 65% share of the Australia domestic airline market, is expected to cause disastrous consequences to the Australian economy.[4][19] The move received heavy criticism from trade unionists and politicians. Australian Senator Nick Xenophon criticised the action as "militant management".[20] TWU secretary Tony Sheldon labelled the move by Qantas as "a pre-conceived, pre-planned attempt to hoodwink the shareholders, hoodwink the Australian community. Now it's trying to hoodwink the company's workforce".[21] Tony Abbott, Leaders of the Opposition, blamed the disputes on the government decision not to intervene, and said that the grounding was avoidable.[22][23]

The Prime Minister of Australia, Julia Gillard, requested an urgent meeting at a Fair Work Australia tribunal: "As a result of the dramatic escalation of that dispute the government has taken a rare decision to make application to Fair Work Australia to have the industrial action terminated and have Fair Work Australia deal with this dispute". A meeting between the airline and the unions was held in Melbourne at 10 pm on 29 October.[24] Richard Woodward, vice-president of the AIPA, said, "Alan Joyce is holding a knife to the nation's throat".[25] Despite the barrage of criticism, the airline is backed by the flight attendants' union.[26]

In the early hours of October 31 Fair Work Australia, the country's independent industrial relations tribunal, ordered that all industrial action taken by Qantas and the involved trade unions be terminated immediately. The order was requested by the federal government amid fears that an extended period of grounding would do significant damage to the national economy, especially the tourism and mining sectors. It is estimated that the grounding affected 68,000 customers worldwide.[27]

The disruption caused to passengers is a good example of why passengers should generally choose non-union airlines, such as Delta Air Lines and most low-cost carriers, when possible.

Response of competitors

Virgin Australia

In response to the lockout, Qantas' rival Virgin Australia is offering passengers who are stranded a discount on flight fare. Virgin has also announced that it will be providing an additional 43,000 seats in the coming weeks to accommodate Qantas passengers.[28]

Air New Zealand

Virgin Australia partner Air New Zealand is offering to cover Virgin's and Qantas' trans-Tasman flights, to free up more aircraft for Virgin to use in the Australian domestic market.[29]

AirAsiaX

AirAsiaX is also offering discounted fares for passengers holding a valid Qantas ticket to any AirAsiaX destination.[28]

See also

References

  1. ^ a b "Qantas grounds all flights". The Sydney Morning Herald. 29 October 2011. Retrieved 29 October 2011.
  2. ^ "Qantas survival strategy a reality check for unions". The Age. 29 August 2011. Retrieved 30 October 2011.
  3. ^ Schneiders, Ben; Cooke, Dewi (25 June 2008). "More chaos as Qantas dispute set to escalate". The Age. Retrieved 29 October 2011.
  4. ^ a b "Alan Joyce 'Termination of Qantas strikes only option'". The Sunday Telegraph. 30 October 201. Retrieved 30 October 2011.
  5. ^ "Qantas pilots strike for long-haul jobs". Perth Now. 11 July 2011. Retrieved 29 October 2011.
  6. ^ Lynam, Joe (29 October 2011). "Qantas boss's risky strategy to refocus airline on Asia". BBC News. Retrieved 30 October 2011.
  7. ^ "Qantas flies into Asia's century". The Sydney Morning Herald. 18 August 2011. Retrieved 30 October 2011.
  8. ^ a b "'Darkest day' as Qantas plans Asian move". ABC News. 16 August 2011. Retrieved 30 October 2011.
  9. ^ Creedy, Steve (17 August 2011). "Qantas turns to Asia for growth". The Australian. Retrieved 30 October 2011.
  10. ^ "Joyce defends Qantas grounding as backlash grows". ABC News. 30 October 2011. Retrieved 30 October 2011.
  11. ^ Govindasamy, Siva (29 October 2011). "Qantas suspends operations after locking out striking employees". Flight International. Retrieved 30 October 2011.
  12. ^ Drew, Kevin (29 October 2011). "Qantas grounds worldwide fleet over dispute". The New York Times. Retrieved 30 October 2011.
  13. ^ "Qantas Grounds Entire Fleet in Labor Dispute". Newser. 29 October 2011. Retrieved 30 October 2011.
  14. ^ "Qantas passengers stranded worldwide". ABC News. 29 October 2011. Retrieved 30 October 2011.
  15. ^ "Irate passengers vow to abandon Qantas". ABC News. 30 October 2011. Retrieved 30 October 2011.
  16. ^ "Airline that stops a nation". The Sydney Morning Herald. 29 October 2011. Retrieved 30 October 2011.
  17. ^ a b "Qantas responds to industrial action" (PDF). Qantas. 29 October 2011. Retrieved 30 October 2011.
  18. ^ "Qantas grounded". The Age. 30 October 2011. Retrieved 30 October 2011.
  19. ^ "COMMENT: Qantas grounding – who will blink first?". Australian Aviation. 30 October 2011.
  20. ^ "Qantas has militant management: Xenophon". The Sydney Morning Herald. 30 October 2011. Retrieved 30 October 2011.
  21. ^ "Unions blast 'reckless' Qantas grounding". ABC News. 29 October 2011. Retrieved 30 October 2011.
  22. ^ "Government to blame for Qantas grounding, Tony Abbott says". The Australian. Australian Associated Press. 30 October 2011. Retrieved 30 October 2011.
  23. ^ "Liberal leader Tony Abbott says Qantas move was 'avoidable'". Herald Sun. Australian Associated Press. 29 October 2011. Retrieved 30 October 2011.
  24. ^ "Qantas hearing adjourned till 2pm Sunday". Herald Sun. 30 October 2011. Retrieved 30 October 2011.
  25. ^ Feast, Lincoln (29 October 2011). "Stranded Qantas passengers await labor ruling". Reuters. Retrieved 30 October 2011.
  26. ^ Ironside, Robyn (30 October 2011). "Flight attendants' union backs Qantas CEO Alan Joyce in standoff with other unions". The Courier-Mail. Retrieved 30 October 2011.
  27. ^ "Qantas to fly after dispute terminated - ABC News (Australian Broadcasting Corporation)". Australian Broadcasting Corporation. Retrieved 31 October 2011.
  28. ^ a b "Virgin, AirAsia offer special fares to Qantas passengers". Herald Sun. 29 October 2011. Retrieved 30 October 2011.
  29. ^ "Live: Qantas grounding cripples Australian air travel". The Sydney Morning Herald. 30 October 2011. Retrieved 30 October 2011.
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