From the Adelaide Advertiser:
High-cost kangaroo of Qantas cannot continue, says Dick Smith
I ALWAYS fly Qantas when going overseas because I can afford it. But most of my friends don't, because they can't.I am amazed Qantas International is still in business. It's a credit to everyone involved.
But it's obvious that unless CEO Alan Joyce is allowed to make huge changes, the whole airline will go broke.
I can't understand why the unions don't get that.
Our skies have been opened up to cheaper foreign carriers. Our leaders - and we, the people - have chosen lower globalised prices, which can only be sustained by lower globalised wages.
If Qantas International doesn't get globalised wages it will go out of business.
That said, we can pay decent Australian wages to pilots - if they work the same number of hours in the cockpit as their Aussie pilot mates at Emirates, Etihad and elsewhere.
However, a greater percentage of cabin crew will have to be employed on global wages.
And while those employed in Australia to maintain its domestic fleet should be OK, an increased proportion of the maintenance for the international flights will have to be done offshore.
I have a number of aircraft and I have had to stop in Singapore and Dubai to have maintenance done.
The maintenance has been just as good - because the supervisors are Australian or are British. The actual workers are from the Philippines and they get paid roughly half the wage available here.
Consider this - about 30 per cent of an airline's costs are labour. Halving the labour costs means you can reduce your total costs by 15 per cent.
A typical airline's profit margin is 5 per cent, so you can see the difference a 15 per cent reduction in costs can make.
I do understand the unions seeing an unfairness in powerful groups such as the legal fraternity and politicians protecting their Australian wages and conditions while saying to typical workers, "Bad luck - you have to compete". If I was a Qantas worker, I would help management save every dollar and be as productive as possible - otherwise I'd know my job was doomed.
Dick Smith is a businessman and former chairman of the Civil Aviation Safety Authority