Qantas must break unions: Ryanair co-founder
One wonders if this this the shape of things to come.
Quote:
EMMA ALBERICI: Airline Partners Australia, the group looking to privatise Qantas, will submit its bidders statement to the corporate regulator within a fortnight.
That document will outline exactly what APA has in mind for the country's national carrier and will in part answer the question of why they're willing to pay $11 billion for a company that the stockmarket valued at just $6 billion before the bid surfaced.
Among the group of intending buyers is the Texas Pacific Group which 12 years ago became an investor in Ireland's low cost airline Ryanair.
Since Texas Pacific invested in Ryanair, the airline's grown from eight to 108 jets - it now has the largest flight network across Europe and a stock market value greater than British Airways.
One of the co-founders of Ryanair, Kell Ryan, will address a business conference later this month in Queensland.
Mr Ryan believes the key to future success for Qantas is in breaking the unions. I spoke with him earlier.
KELL RYAN: Ryanair is a non-unionised company. The staff are all in profit sharing, but I mean you have to get your workforce together.
I think… I don't know what the issues are there. British Airways are going on strike - their cabin staff, 98 per cent of them have taken it on board to have cabin staff go on to sick days that they think they're entitled to.
You know, they just need to wake up. The world is changing. All they're going to do is damage their company.
EMMA ALBERICI: So unionised workforces in the airline industry are a thing of the past in your opinion?
KELL RYAN: If you look at the examples, particularly in the States and then maybe even in Europe as well. If you look at Air Italia, constant problems with their unions. They won't accept change and they're now going to be sold off.
Same thing happened with Sabina. It's happened with British Airways, it's happened with American Air in the States, it's happened with United. And one of these airlines will go out of business.
Unions have to realise that companies have to be flexible, that there is competition and they have to… they have to be able to adapt to a changing world.
EMMA ALBERICI: Is there a future with the style of airline that Qantas and British Airways have traditionally run?
KELL RYAN: I don't think so. Personally, because change is happening all around them, you know, we've had the events of 9/11 and we've had SARS and we've had fuel increases and stuff like that, so you have to be able to keep a handle, I think, on your costs. You have this threat from other low-cost carriers are eating into your market so you have to have a flexible work force, I believe, and you have to have people that can adapt to change.
We have the lowest cost base of any airline on the planet. We have the most flexible, dedicated workforce and we are profitable, and we've kept it simple.
People have been denied low cost travel, particularly in Europe, for decades. They've been ripped off by high-fare legacy carriers and now they've found a new way to fly and next year, as I said, Ryanair will carry 42 million passengers. And in five years time it'll carry 70 million, making it the largest airline in the world and that's purely on low cost.
It's not even a question of even getting rid of people. It's making people be more productive.
EMMA ALBERICI: How do you do that?
KELL RYAN: I think you've got to talk to them, you've got to explain it.
EMMA ALBERICI: Inevitably it's paying them less, is it not?
KELL RYAN: Well, you can… no, you don't have to pay them less. All you can say is that they can't be expecting like in the case of United… US Airways in the States who wanted a 68… the company was trying to give them… to accept a three per cent wage cut, which would be paid back when the company got profitable. And they were looking for a 68 per cent pay rise.
What you try to get is people to be a bit more flexible and a bit more productive, and not to have these practices that they've had in place for 20 or 30 years.
And if you look at it, it's the same here in England, the car industry went out of business because unions wouldn't adapt and it's the same with the airlines.
EMMA ALBERICI: Co-founder of Ryanair, Kell Ryan.
Fancy a pay cut anyone?