Geoff Dixon Writes To 2600 Pilots, Threatens Union Payment Cuts
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Geoff Dixon Writes To 2600 Pilots, Threatens Union Payment Cuts
Thursday March 16, 5:13 AM
AUSTRALIA PRESS: Government To Review Airport Regulations
MELBOURNE (Dow Jones)--Qantas Ltd.(QAN.AU) chief executive Geoff Dixon has written to 2600 pilots over cost cutting initiatives including stopping its payments to their union, The Australian Financial Review reported Thursday.
The airline is assuming a cost base with oil prices of US$60 a barrel and plans to cut off the A$500,000 a year it traditionally pays the Australian & International Pilots Association to cover the salaries of its executives, the paper said.
"It's about productivity and overall efficiency, not just rates of pay. Given our investment profile and the competitive nature of our business, we have no other option," Dixon said.
Dixon is chasing cost cuts of A$3 billion by 2008 under his "sustainable future" program.
"Flight crew so far have been unaffected by these changes but when just two line items - manpower and fuel - now account for almost 60% of our cost base, there is no option but to accelerate the rate of change," the letter read.
Newspaper Web site: http://www.afr.com
AUSTRALIA PRESS: Government To Review Airport Regulations
MELBOURNE (Dow Jones)--Qantas Ltd.(QAN.AU) chief executive Geoff Dixon has written to 2600 pilots over cost cutting initiatives including stopping its payments to their union, The Australian Financial Review reported Thursday.
The airline is assuming a cost base with oil prices of US$60 a barrel and plans to cut off the A$500,000 a year it traditionally pays the Australian & International Pilots Association to cover the salaries of its executives, the paper said.
"It's about productivity and overall efficiency, not just rates of pay. Given our investment profile and the competitive nature of our business, we have no other option," Dixon said.
Dixon is chasing cost cuts of A$3 billion by 2008 under his "sustainable future" program.
"Flight crew so far have been unaffected by these changes but when just two line items - manpower and fuel - now account for almost 60% of our cost base, there is no option but to accelerate the rate of change," the letter read.
Newspaper Web site: http://www.afr.com
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your turn
have you read today's papers it looks like the pilots at Q are about to have their turn in the Q pay and productivity comedy show. once again i quote united we stand together we fall unless all unions start talking to each other it will be every man for him/herself to screw your colleagues.
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and plans to cut off the A$500,000 a year it traditionally pays the Australian & International Pilots Association to cover the salaries of its executives, the paper said.
Well that is incorrect for a start.
AIPA has bought and paid for flying relief via a bank of donated pilot leave for the exec in previous EBA's. As that was no longer an allowable EBA item, it was transferred to a Memorandum of Understanding to be signed off with the last EBA.
Dixon then reneged on that agreement. That is the standards of the man.
Well that is incorrect for a start.
AIPA has bought and paid for flying relief via a bank of donated pilot leave for the exec in previous EBA's. As that was no longer an allowable EBA item, it was transferred to a Memorandum of Understanding to be signed off with the last EBA.
Dixon then reneged on that agreement. That is the standards of the man.
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once again i quote united we stand together we fall unless all unions start talking to each other it will be every man for him/herself to screw your colleagues.
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Hate to state it BUT, approx 16 1/2 years ago, 80% of the domestic pilots WERE united. The other 20% caused the "fall" that resulted in the general airline pilot pay being offered in Australia today.
The fact that the QF pilots are in one organisation and J* pilots in another presents a case of nowhere near such unity. Dixon can't lose!
Oh, for the days when all QF and domestic pilots were in the ONE union - sorry, "federation." Anyone old enough to manage to recall the big QF stoush in the 60s when the QF pilots were (successfully) represented by "that federation?" THAT was unity!!
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Hate to state it BUT, approx 16 1/2 years ago, 80% of the domestic pilots WERE united. The other 20% caused the "fall" that resulted in the general airline pilot pay being offered in Australia today.
The fact that the QF pilots are in one organisation and J* pilots in another presents a case of nowhere near such unity. Dixon can't lose!
Oh, for the days when all QF and domestic pilots were in the ONE union - sorry, "federation." Anyone old enough to manage to recall the big QF stoush in the 60s when the QF pilots were (successfully) represented by "that federation?" THAT was unity!!
A$500,000 a year it traditionally pays the Australian & International Pilots Association to cover the salaries of its executives
I guess you can take that as the first salvo of the battle.
Interesting times ahead.........................
Oz2
Interesting times ahead.........................
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Full Text
AFR Mar 16th - Qantas warns pilots of a hard landing
For Qantas chief executive Geoff Dixon, it is a simple problem: he pays every pilot flying from Sydney to Brisbane about $80,000 a year more than Virgin Blue's Brett Godfrey gives his pilots for the same job.
As the companies compete for a market increasingly dominated by customers loyal only to their wallets, it is a difference Qantas says it must address to compete better with its younger, leaner rival.
It is here, rather than in the sacking of maintenance staff announced last week, that the long-serving Qantas boss faces possibly his most bruising industrial relations battle.
That is why Mr Dixon yesterday wrote to 2600 Qantas pilots and told them the airline was assuming a cost base with oil prices of $US60 a barrel. He told them they must accept change, and accept it now.
He also told them he was cutting off the $500,000 a year Qantas has traditionally paid the Australian & International Pilots Association (AIPA), the pilots' union, to cover the salaries of its president and vice-presidents.
"I don't regard it as just an issue about Virgin," Mr Dixon said.
"It's about productivity and overall efficiency, not just rates of pay. Given our investment profile and the competitive nature of our business, we have no other option."
Mr Dixon, who is chasing cost cuts of $3billion by 2008 under his "sustainable future" program, said Qantas had lost fewer than four days to industrial action in the decade since privatisation.
"That has to continue at a time when the company has to set the price of its operating base at levels that had never before been imagined," he said. "And that means we have to drive new efficiencies into the business."
Yesterday's letter made it clear nothing was sacred.
"Flight crew so far have been unaffected by these changes but when just two line items - manpower and fuel - now account for almost 60 per cent of our cost base, there is no option but to accelerate the rate of change," it read.
Ian Woods, a captain on Qantas 747-400 long-haul aircraft who took control of AIPA last September, is the man whose vocal criticism of Qantas's plans prompted yesterday's letter.
He said Mr Dixon risked an unprecedented fight with all its unions - including the Australian Manufacturing Workers Union and Australian Workers Union that represent engineers - if it continued with its aggressive tactics.
"We have never had a day's work lost to a strike," Mr Woods said. Qantas pilots kept out of the strike in 1989 of pilots from Australian Airlines (then not owned by Qantas) and Ansett.
"Pilots are generally very committed people," he said. "Because their commitment relies on their personal integrity, they're normally very pro-company, but their patience is being worn thin."
Mr Woods said that if Qantas could afford to benchmark its executives' salaries against executives in New York and London, then pilots' salaries should not be benchmarked against Asian competitors such as Singapore Airlines and Emirates, who earn closer to the $140,000 a year Virgin Blue pays its pilots than the standard $220,000-plus earned by a Qantas domestic captain.
¢¢¢ Mr Woods also said that as Qantas charged more than Virgin Blue, particularly by offering a business-class service, it should be able to share those higher margins with its pilots.
The problem is that Qantas is increasingly struggling to justify charging more for its services on domestic routes as customers embrace "lowest fare of the day" purchasing.
And if people are less willing to pay a premium for the hops of one and a bit hours between Sydney and Brisbane or Melbourne, it is harder for Qantas to maintain its higher cost base. That is why Jetstar is so important to Qantas: it has established the group as the lowest-cost operator in Australia and hopes to do the same when it starts flying internationally later this year.
It will result in Jetstar captains earning $158,500 a year if they fly internationally, compared with about $135,000 domestically, considerably less than Qantas counterparts.
AIPA's fear is that as Qantas services are transferred to Jetstar, the airline will reduce the standard pay and conditions in the Australian airline industry by stealth.
For a captain, Jetstar represents a sharp dip in wages, but going from a non-command position at Qantas (on a salary about 60 per cent of a captain's) to a captain's role at Jetstar can be appealing and AIPA is concerned this will be encouraged as the main area of career moves.
That is why AIPA is trying to block a new enterprise bargaining agreement enabling Jetstar's 249 pilots (who negotiate separately to the union) to fly wide-body long-haul aircraft.
This blocking movement application was rejected by the Australian Industrial Relations Commission last week, but AIPA is expected to appeal.
"Jetstar is likely to be an area of strong growth for Qantas so AIPA would argue that Qantas pilots have a vested interest," MrWoods said.
"AIPA is concerned that if there is that kind of wage differential, that it becomes standard. It is the classic pincer movement because Qantas pilots become cost uncompetitive."
And while Qantas says some senior pilots earning as much as $375,000 fly only 65 hours a month (and some even have second jobs), AIPA claims Qantas pilots' higher wages are based on the fact they work harder and smarter than their Virgin counterparts.
"Virgin Blue pilots are lucky to average 650 hours a year in the air ... That's where the difference [in salary] comes from," MrWoods said.
"They [Qantas pilots] are being paid more because they are one of the Western world's most productive and efficient pilot groups. And they are now aggrieved."
Ohhh the pain.........the pain
For Qantas chief executive Geoff Dixon, it is a simple problem: he pays every pilot flying from Sydney to Brisbane about $80,000 a year more than Virgin Blue's Brett Godfrey gives his pilots for the same job.
As the companies compete for a market increasingly dominated by customers loyal only to their wallets, it is a difference Qantas says it must address to compete better with its younger, leaner rival.
It is here, rather than in the sacking of maintenance staff announced last week, that the long-serving Qantas boss faces possibly his most bruising industrial relations battle.
That is why Mr Dixon yesterday wrote to 2600 Qantas pilots and told them the airline was assuming a cost base with oil prices of $US60 a barrel. He told them they must accept change, and accept it now.
He also told them he was cutting off the $500,000 a year Qantas has traditionally paid the Australian & International Pilots Association (AIPA), the pilots' union, to cover the salaries of its president and vice-presidents.
"I don't regard it as just an issue about Virgin," Mr Dixon said.
"It's about productivity and overall efficiency, not just rates of pay. Given our investment profile and the competitive nature of our business, we have no other option."
Mr Dixon, who is chasing cost cuts of $3billion by 2008 under his "sustainable future" program, said Qantas had lost fewer than four days to industrial action in the decade since privatisation.
"That has to continue at a time when the company has to set the price of its operating base at levels that had never before been imagined," he said. "And that means we have to drive new efficiencies into the business."
Yesterday's letter made it clear nothing was sacred.
"Flight crew so far have been unaffected by these changes but when just two line items - manpower and fuel - now account for almost 60 per cent of our cost base, there is no option but to accelerate the rate of change," it read.
Ian Woods, a captain on Qantas 747-400 long-haul aircraft who took control of AIPA last September, is the man whose vocal criticism of Qantas's plans prompted yesterday's letter.
He said Mr Dixon risked an unprecedented fight with all its unions - including the Australian Manufacturing Workers Union and Australian Workers Union that represent engineers - if it continued with its aggressive tactics.
"We have never had a day's work lost to a strike," Mr Woods said. Qantas pilots kept out of the strike in 1989 of pilots from Australian Airlines (then not owned by Qantas) and Ansett.
"Pilots are generally very committed people," he said. "Because their commitment relies on their personal integrity, they're normally very pro-company, but their patience is being worn thin."
Mr Woods said that if Qantas could afford to benchmark its executives' salaries against executives in New York and London, then pilots' salaries should not be benchmarked against Asian competitors such as Singapore Airlines and Emirates, who earn closer to the $140,000 a year Virgin Blue pays its pilots than the standard $220,000-plus earned by a Qantas domestic captain.
¢¢¢ Mr Woods also said that as Qantas charged more than Virgin Blue, particularly by offering a business-class service, it should be able to share those higher margins with its pilots.
The problem is that Qantas is increasingly struggling to justify charging more for its services on domestic routes as customers embrace "lowest fare of the day" purchasing.
And if people are less willing to pay a premium for the hops of one and a bit hours between Sydney and Brisbane or Melbourne, it is harder for Qantas to maintain its higher cost base. That is why Jetstar is so important to Qantas: it has established the group as the lowest-cost operator in Australia and hopes to do the same when it starts flying internationally later this year.
It will result in Jetstar captains earning $158,500 a year if they fly internationally, compared with about $135,000 domestically, considerably less than Qantas counterparts.
AIPA's fear is that as Qantas services are transferred to Jetstar, the airline will reduce the standard pay and conditions in the Australian airline industry by stealth.
For a captain, Jetstar represents a sharp dip in wages, but going from a non-command position at Qantas (on a salary about 60 per cent of a captain's) to a captain's role at Jetstar can be appealing and AIPA is concerned this will be encouraged as the main area of career moves.
That is why AIPA is trying to block a new enterprise bargaining agreement enabling Jetstar's 249 pilots (who negotiate separately to the union) to fly wide-body long-haul aircraft.
This blocking movement application was rejected by the Australian Industrial Relations Commission last week, but AIPA is expected to appeal.
"Jetstar is likely to be an area of strong growth for Qantas so AIPA would argue that Qantas pilots have a vested interest," MrWoods said.
"AIPA is concerned that if there is that kind of wage differential, that it becomes standard. It is the classic pincer movement because Qantas pilots become cost uncompetitive."
And while Qantas says some senior pilots earning as much as $375,000 fly only 65 hours a month (and some even have second jobs), AIPA claims Qantas pilots' higher wages are based on the fact they work harder and smarter than their Virgin counterparts.
"Virgin Blue pilots are lucky to average 650 hours a year in the air ... That's where the difference [in salary] comes from," MrWoods said.
"They [Qantas pilots] are being paid more because they are one of the Western world's most productive and efficient pilot groups. And they are now aggrieved."
Ohhh the pain.........the pain
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AIPA claims Qantas pilots' higher wages are based on the fact they work harder and smarter than their Virgin counterparts.
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At the end of the day, the contract is solid.
He can bleat all he likes. Played correctly the PR battle will be won. People out there are sick of the scathing attacks. Listen and read the feedback on maintenance...
No matter what he says the office full of bean counters can't fly the aircraft
He can bleat all he likes. Played correctly the PR battle will be won. People out there are sick of the scathing attacks. Listen and read the feedback on maintenance...
No matter what he says the office full of bean counters can't fly the aircraft
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Planemad, I think that is an unfortunate choice of words.
My mates on the QF 737's regularly run up 900 hours a year. Some go to 1000 hours p.a
If that is true that VB pilots average 650-700 per year then "Dixons simple problem" is actually an huge efficiency for him.
An extra 200 hours p.a. per 737 pilot translates to a large number of extra pilots QF doesn't have to employ. Factor in all the on-costs like super and training for these pilots and his 80,000 bucks disappears and then some.
My mates on the QF 737's regularly run up 900 hours a year. Some go to 1000 hours p.a
If that is true that VB pilots average 650-700 per year then "Dixons simple problem" is actually an huge efficiency for him.
An extra 200 hours p.a. per 737 pilot translates to a large number of extra pilots QF doesn't have to employ. Factor in all the on-costs like super and training for these pilots and his 80,000 bucks disappears and then some.
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Played correctly the PR battle will be won.
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Wish that you were correct but history has shown that it will not happen. Remember that he has Johnny and, more importantly, the media on his side. Both assets proved successful (to the operators) in the past!
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No matter what he says the office full of bean counters can't fly the aircraft.
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Correct - BUT other pilots can and will. That was also demonstrated in the past.
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Whichever way the situation is considered, the end result will be the same. QF pilots should right now consider reducing debts, downsizing and eliminating in regard to luxuries etc and storing tucker. It's over.
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Wish that you were correct but history has shown that it will not happen. Remember that he has Johnny and, more importantly, the media on his side. Both assets proved successful (to the operators) in the past!
-------------------------------------------------------------------------
No matter what he says the office full of bean counters can't fly the aircraft.
-----------------------------------------------------------------------
Correct - BUT other pilots can and will. That was also demonstrated in the past.
-----------------------------------------------------------------------
Whichever way the situation is considered, the end result will be the same. QF pilots should right now consider reducing debts, downsizing and eliminating in regard to luxuries etc and storing tucker. It's over.
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¢¢¢ Mr Woods also said that as Qantas charged more than Virgin Blue, particularly by offering a business-class service, it should be able to share those higher margins with its pilots.
From Casper
Hate to state it BUT, approx 16 1/2 years ago, 80% of the domestic pilots WERE united. The other 20% caused the "fall" that resulted in the general airline pilot pay being offered in Australia today.
The "fall" in general Airline pay from those conditions rests solely on the sholders of Virgin Blue,the originators of low pay in Australia.
You know.... at the hands of JR and now BK,a couple of high profile individuals 16.5 years ago.
I do agree with you though that we do need Unity,now more than ever.
This appears to be Dixons first stone thrown at AIPA,I bet with many more to come.
Roll forward 3 years....
Jetstar has a handfull of 787's and by now Dixon has given AIPA such a battering that the've been reduced to a snivling group of nothings cowing in the corner.
Geoff "Ian ,I'd like to see you in my office"
Ian "Right away Mr Dixon"
Geoff "now these 787's that we are getting with rat tails"
Ian "Yes,and very nice they are to Mr Dixon and can I commend you on our........".
Geoff "Don't interupt we when I'm talking...now as you know Jetstar have been operating these a while now and I'm very impressed with those Jetstar people and I think that they should operate the rat tail one's as well....you know....now that toilet tissue is 4 dollars a box we have to look at significant cost cutting and...well ...your it.Unless of course you can get the boys to come across to the Jetstar agreement.
Ian,"But thats a transmission of business Mr Dixon,and there's no way that Jetstar could fly an aircraft that has Business Class".
Geoff "Right then thats all,I want an answer in 5 minutes...OH and on you way out tell my PA to get my Financial adviser on the phone,I think I've I just pocketed another couple of mill in bonuses.
Tell me this is not going to happen!.
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Yes Poto, they'll be paid more for more work but the efficiency saves the company money. Lots of it. Say you need to fly your 737 3600 hours. You can pay about 4 Qantas Captains at 900hrs 220K/annum to fly that=880K. Or you can pay 6 VB Captains at 600 hrs 180k/annum to fly that=1.08m. Saving 200k. Obviously I'v rounded the numbers a bit to make the maths simple but the concept remains.
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QF insider, you will not win any PRbattle. That's been proven, and we won'tenterinto when.
The puyblic are not on your side; infact the pub ic hate pilots. Remember this isthe land of the tall poppy syndrome.
Thumbs up you will get no argument from me. Unfortuante it is but it will happen.
The puyblic are not on your side; infact the pub ic hate pilots. Remember this isthe land of the tall poppy syndrome.
Thumbs up you will get no argument from me. Unfortuante it is but it will happen.
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Originally Posted by The_Cutest_of_Borg
Planemad, I think that is an unfortunate choice of words.
My mates on the QF 737's regularly run up 900 hours a year. Some go to 1000 hours p.a
If that is true that VB pilots average 650-700 per year then "Dixons simple problem" is actually an huge efficiency for him.
An extra 200 hours p.a. per 737 pilot translates to a large number of extra pilots QF doesn't have to employ. Factor in all the on-costs like super and training for these pilots and his 80,000 bucks disappears and then some.
My mates on the QF 737's regularly run up 900 hours a year. Some go to 1000 hours p.a
If that is true that VB pilots average 650-700 per year then "Dixons simple problem" is actually an huge efficiency for him.
An extra 200 hours p.a. per 737 pilot translates to a large number of extra pilots QF doesn't have to employ. Factor in all the on-costs like super and training for these pilots and his 80,000 bucks disappears and then some.
Unless he means QF have more efficient (smarter) rosters.
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plane mad and CofB, Dixon doesn't care ifhe has the most efficient pilots in the world for the lowest price. He will wlways want more.
I agree with other posters on these forums/ae, he doesn 't car e if he has you earning less than a base grade clerk he'llkeep at you always wanting more.
What is at stake here is his bonus and the morehe saves the more he gets.
I know it 's been said before. Managements don't give a tinker's cuss about things like safety. If they did then why would they attempt to cut maintenance?? It's up to us, the pilots to keep the operation safe.
They're obliged to say they do because it looks good, but there it stops. They know you don't want to die so will be conservative with maintenance issues and then it will be fixed if you dig in.
I have a number of good matesin Qantas, and one in particular says he is appalled that they hold themselves up to be the safest airline in the world,but their maintenance standard is so poor.
The public are getting onto that but do they stop travelling with Qantas? No because they believe the hype.. Simple as that
56P, dramatic stuff, but quite right. I hope what most see as the inevitable does't hit out Qantasbrothers but Dixon is out to make 10 million a year for himself and the only thatwill happen is to bl eed the tropps for it.
I think Qf insider is deluding himself.
I agree with other posters on these forums/ae, he doesn 't car e if he has you earning less than a base grade clerk he'llkeep at you always wanting more.
What is at stake here is his bonus and the morehe saves the more he gets.
I know it 's been said before. Managements don't give a tinker's cuss about things like safety. If they did then why would they attempt to cut maintenance?? It's up to us, the pilots to keep the operation safe.
They're obliged to say they do because it looks good, but there it stops. They know you don't want to die so will be conservative with maintenance issues and then it will be fixed if you dig in.
I have a number of good matesin Qantas, and one in particular says he is appalled that they hold themselves up to be the safest airline in the world,but their maintenance standard is so poor.
The public are getting onto that but do they stop travelling with Qantas? No because they believe the hype.. Simple as that
56P, dramatic stuff, but quite right. I hope what most see as the inevitable does't hit out Qantasbrothers but Dixon is out to make 10 million a year for himself and the only thatwill happen is to bl eed the tropps for it.
I think Qf insider is deluding himself.
Last edited by relax737; 16th Mar 2006 at 01:17.
Nunc est bibendum
planemad2, of course that is what he meant. I'll also note that the article is written by a journalist. That means that it'll sensationalise any tiny bit that it can- that being one of them.
Chris, you extoll us to 'stay involved' nad you've said the same thing to me personally. I took you at your word but it's becoming very hard to be keen to do that when it appears that every person in the place is trying to knock you down! Ask me about it next time we see each other. If you want the full and honest answer from a line driver, I'll give it to you.
Chris, you extoll us to 'stay involved' nad you've said the same thing to me personally. I took you at your word but it's becoming very hard to be keen to do that when it appears that every person in the place is trying to knock you down! Ask me about it next time we see each other. If you want the full and honest answer from a line driver, I'll give it to you.
What really gets up my nose about GD's reneging on the MOU is that these conditions for the AIPA executive came out of previous EBA's and hence we bought and paid for them.
What he is doing is theft, pure and simple. He is ripping us off. I am not surprised, that is the calibre of this team of ne'er-do-wells which infests the corridors of power in what was once a great airline.
I am very concerned that "PNR" in the destruction of our airline is dangerously close.
What he is doing is theft, pure and simple. He is ripping us off. I am not surprised, that is the calibre of this team of ne'er-do-wells which infests the corridors of power in what was once a great airline.
I am very concerned that "PNR" in the destruction of our airline is dangerously close.