Qantas looks to China for future, cautions 'out of touch' unions | ATWOnline
Qantas looks to China for future, cautions 'out of touch' unions
Qantas declared that its future is in China, the world’s second biggest and fastest growing aviation market, but the airline needs its staff to embrace the radical change to succeed.
Speaking Wednesday at the Australia Pacific Aviation Outlook Summit in Sydney, QF CEO Alan Joyce warned that “out of touch union leaders” who are resisting change don't understand that the carrier's costs are 25% above its competitors such as Singapore Airlines (ATW Daily News, July 14). “Globalization continues to change our world in profound ways and it is still changing the way we work, consume and engage—and it is still driving relentless competition,” said Joyce. “Globalization is not optional and it is not over.”
According to Joyce, China is already home to seven of the world’s top 20 airports by capacity. “By 2020, China will have 15 cities with bigger populations than Sydney and the region will be home to 2.6 billion people. And by 2030 the country expects to have at least three globally recognized international airline hubs, 10 national and regional hubs and at least 244 airports,” he said.
But to capitalize on the booming China and Asia market, QF needs significant change, cautioned Joyce. “Change is always tough. But the competitive challenges we face make major change essential, and our commitment to the change process is absolute,” he said. The CEO noted a significant upside: “I believe we have a major opportunity to go beyond the natural limitations of our market size and geography, to become a champion Australian company in a globalized region and world.”
Joyce noted that QF subsidiary Jetstar operates Asia’s largest and fastest-growing low-fares network. “That is an amazing achievement for an Australian airline,” he said.
On Aug. 24, QF is expected to announce a major restructure of its international operations and a new joint venture to establish an airline in Asia, which will be based in either Malaysia, China or Singapore. Joyce said that the future is “wrapped up in even deeper alliance partnerships and further joint ventures,” but such sentiments do not sit well with unions that fear outsourcing.
According to Joyce, some of the airline’s union leaders are “simply out of touch and trying to block our use of new business models” and that could scuttle expansion plans. Joyce also claimed that some unions are blocking efficiencies that can be delivered by new maintenance technologies.
“Less than a month ago, Australia’s Civil Aviation Safety Authority issued new aviation maintenance regulations that bring Australia into line with European standards and global best practice,” said Joyce.
The new regulations finally recognize the quantum leap in aviation technology, particularly in the sophisticated information, material and design technologies that underpin new aircraft. However, Joyce said the QF engineers’ union is resisting the change. “Our maintenance and repair costs are among the least efficient and most expensive in the world,” he stated. “It’s time to catch up. We don’t repair our cars the same way we did 40 years ago. We can’t repair our planes the same way either. We can—and we will—be safer, smarter and more efficient.”
QF is in a bitter dispute with both its engineers and long-haul pilots, who have voted for industrial action expected to take place in early August (ATW Daily News, July 12).