Analyse the current Qantas dispute

Introduction

Qantas and the 3 unions representing baggage handlers, pilots and engineers have been attempting to undertake wages negotiations over the past 4 months. On Friday at the Qantas AGM the shareholders overwhelming endorsed the position of the profit conscious, non-negotiation position of the current CEO Alan Joyce. At the same meeting the board voted to provide Mr Joyce with a 71% pay rise. On Saturday morning October 29, 2011 Alan Joyce decided universally to ground all Qantas flights globally. This report will analyse the advantages and disadvantages of this decision

Advantages -

Union
  • For the 3 unions involved in the dispute the main advantage would be from a public relations position as Qantas has negatively affected over 70000 peoples travel arrangements over just 2 days of no flight activity
Competitors
  • Domestic airlines like Virgin Australia will have an unexpected inflow of additional funds through additional domestic sales
  • International airlines will have the same benefits from a funds perspective, they will also both have the benefit of potential new customers returning to use their service that may not have flown with an airline other than Qantas previously.
Qantas
  • Have stopped 18 months of planned rolling strikes and stop work meetings that are organised at the Unions discretion and are designed to cause the most disruption to Qantas management and cash flow
  • Have forced Fair Work Australia (FWA) to take a position on the dispute without being seen to ask for Government arbitration
Customers
  • If Alan Joyce succeeds customers will have lower priced airfares and will be seen to be more competitive with overseas air companies.
Government
  • None that seem reasonable at this time

Disadvantages

Union
  • The Union did not want FWA to cancel the dispute, they wanted a delay to better prepare their negotiations and gain a fairer long term employment outcome for their members
Competitors
  • Virgin Australia has had to place 3000 additional customers on their airline, per day since Saturday. This has caused them additional overtime costs, and 24 hour work around to assist as many customers as possible who may not ever fly with them again
Qantas
  • Negative public relations as they have forced 70,000 people globally to miss out on once in a life time holidays, important business meetings, funerals and other critical travel outcomes
  • There is a 10s of millions of dollars impact to have planes grounded per day that will directly impact the annual profit
Customers
  • Qantas has become more and more unreliable over the past 5 years, not leaving on time, cancelling flights and not seen to be providing value for money
Government
  • There is a direct impact to the GDP of the Australian economy which has no forced the government to act and call for FWA to arbitrate.
  • Alan Joyce will cause the relocation of thousands of Australian jobs to countries overseas, increasing unemployment, decreasing taxes paid and potentially decentralising control of the national carrier

Conclusion

Based on the information provided above it is recommended that the Australian Government provide a subsidy to Qantas that allows a fair salary, based on Australian standards, to be paid and that jobs remain on shore.