MERGED: Qantas grounded effective immediately.
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clotted,
If you showed more of the post I made, you would see I'm not dreaming. Maybe hopeful that there are a few in Canberra who will take a CEO and company to task for their actions. This could be signalling the beginning of a change in the way the government handles "rogue employers" (Doug Cameron).
This is a test case for Australian IR laws, particularly FWA. If it is seen to be a victory for QANTAS in what they did when they grounded their own airline, and told the government and FWA that anything short of a termination of IA will keep the aircraft grounded, no matter the expense to the customers and the economy in general, then this will open the gates for all major companies to do the same.
Today's hearing is just that. A hearing. If it progresses to the next stage of an enquiry and investigation, then it becomes interesting. It will become a bit more than a couple of hours of giving AJ a hard time, and applying some heat on him.
I agree, the senate committee, Canberra and the board are just circuses performing under the big top. It stops being a circus when implications and allegations are being thrown around. Pollies don't like being in the firing line, and will turn it around when it comes to the crunch. It's either them or AJ. AJ has named people high up in Canberra. He now has to back that up, but he has shifted on a few items of his story about who and when they were contacted.
This is just stage 1. No victories or cheer squads. Just patiently waiting the events to unfold.
If you showed more of the post I made, you would see I'm not dreaming. Maybe hopeful that there are a few in Canberra who will take a CEO and company to task for their actions. This could be signalling the beginning of a change in the way the government handles "rogue employers" (Doug Cameron).
This is a test case for Australian IR laws, particularly FWA. If it is seen to be a victory for QANTAS in what they did when they grounded their own airline, and told the government and FWA that anything short of a termination of IA will keep the aircraft grounded, no matter the expense to the customers and the economy in general, then this will open the gates for all major companies to do the same.
Today's hearing is just that. A hearing. If it progresses to the next stage of an enquiry and investigation, then it becomes interesting. It will become a bit more than a couple of hours of giving AJ a hard time, and applying some heat on him.
I agree, the senate committee, Canberra and the board are just circuses performing under the big top. It stops being a circus when implications and allegations are being thrown around. Pollies don't like being in the firing line, and will turn it around when it comes to the crunch. It's either them or AJ. AJ has named people high up in Canberra. He now has to back that up, but he has shifted on a few items of his story about who and when they were contacted.
This is just stage 1. No victories or cheer squads. Just patiently waiting the events to unfold.
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The coalition of loonies is just a circus no more no less. Nothing is going to change.
After today, I believe they know the proposed amendment does not go far enough.
I can't wait to see the QSA amendment MK11.
These same loonies have the power to change the QSA, that will f&^k their grand plans in both holes.
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One of the sleepers from today (and there were many which may have consequences) was the discussion on the intent of the QSA and the national interest. Seems the senators may have noticed that Mr Joyce's intent and the intent of the legislators may not be consistent.
There are also serious governance issues at QF if one individual, be it CEO or not, who can ground the airline in these circumstances when clearly there was NO safety risk.
If he had the authority then why did he call a Board meeting?
It does seem odd that the whole Board were available at such short notice. Presumably there was the obligatory celebratory dinner after the AGM which would have been planned (a bit like the planning for lockouts I suspect) so whoever organised this knew they would be available.
Where was the Chairman as well in all this as it was not unreasonable for him to have contact with people for such a national interest issue. IF he didnt see the national interest issue, then perhaps he may like to explain that as well.
I suspect a few regulatory bodies may now start to be a tad interested in events.
There are also serious governance issues at QF if one individual, be it CEO or not, who can ground the airline in these circumstances when clearly there was NO safety risk.
If he had the authority then why did he call a Board meeting?
It does seem odd that the whole Board were available at such short notice. Presumably there was the obligatory celebratory dinner after the AGM which would have been planned (a bit like the planning for lockouts I suspect) so whoever organised this knew they would be available.
Where was the Chairman as well in all this as it was not unreasonable for him to have contact with people for such a national interest issue. IF he didnt see the national interest issue, then perhaps he may like to explain that as well.
I suspect a few regulatory bodies may now start to be a tad interested in events.
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News Flash : Qantas CEO A.Joyce steps down as CEO over the grounding of the Qantas fleet and takes up the position Chairman of Qantas Group Asia Network.
Sorry this may be a bit early to release this so sorry Oliva to steal your thunder .
Sorry this may be a bit early to release this so sorry Oliva to steal your thunder .
Nunc est bibendum
A pretty good article this one.
FIRST officer Peter S* was taxi-ing his Qantas CityFlyer flight from one of Australia's major airports on Saturday afternoon when the call came through from air traffic control to contact the Qantas operations frequency urgently. He was told to turn his flight around and return to the gate as all Qantas flights had been grounded.
"My gut wrenched as I immediately thought that an aircraft in our fleet must have crashed," Peter later told me.
Pilots are trained to suppress emotion at critical times, so Peter and his captain calmly did as they were ordered. After the engines wound down and the shutdown checklist was complete, the captain learnt that a total airline grounding had been ordered by CEO Alan Joyce.
"I was shocked. I did not understand what we had done to warrant this type of reaction," Peter said.
The captain then explained to his passengers what had happened — that the ground crew, engineers and pilots were to be locked out. He also outlined the pilots' major claim in our industrial negotiations — the principle that Qantas-branded flights be flown by Qantas pilots.
"The cabin erupted in applause in support for us," Peter recounted. "As the passengers disembarked, most stopped to talk, expressing support, dismay, anger and hostility towards Qantas management; especially Joyce. Some were crying in disbelief at what they were doing to us and this company."
Other Qantas pilots registered their shock and anger over the lockout in much the same way. Our industrial action had so far been low-key and designed to avoid the very dislocation that Qantas was now inflicting on its own customers.
For Peter, the situation was only now sinking in. "My fury was growing by the minute. Not so much for locking us out, but at the absolute contempt with the way it had been enacted — the biggest possible disruption to everyone. One of our business class passengers in fact said . . . 'I now understand why staff are unhappy at this airline — this is the style of management you have to put up with. I would never even contemplate treating any of my staff like this, much less my customers. He is a grade-A f------!' "
Qantas staff, including the cabin crew, tried to help their customers in the terminal as best they could, Peter said. "By this stage I was numb. I still could not understand how anyone could think that this was a rational, calm, measured response . . . He [Joyce] was holding a loaded gun at the head of pilots [including those still in the air], engineers, the travelling public, Fair Work Australia and the government. All timed to cause maximum disruption, to everyone with CHOGM [Commonwealth Heads of Government Meeting] and Melbourne Cup. It was an act of true narcissism."
This summed up the general attitude among pilots I spoke with this week. Qantas, unwilling to give an inch on the key sticking point between the parties, had used its economic clout to force government intervention, a termination of industrial action — and, in all likelihood, a binding arbitration decision that will not include the clause that Qantas pilots consider vital to their career prospects.
The grounding marks a nadir in the progressively souring relationship between management and pilots that goes back to the Geoff Dixon era and the setting up of Jetstar. Dixon is quoted in a 2005 interview in ceoforum.com.au as saying that once he had decided to set up Jetstar he didn't talk to the employees unless it was on his terms. "I know some CEOs say, look after your customers, look after your employees, and the returns for shareholders will follow. I do the exact opposite."
As each contract negotiation was signed off in this period, suddenly the plans for Jetstar would expand, cutting into routes previously flown by Qantas pilots (who were effectively barred from entering Jetstar). Joyce, meanwhile, has selectively quoted and distorted the figures to overstate the amount some Qantas pilots are paid.
Joyce has also claimed that pilots want to run the company. We do not — but we wish our expertise in flying matters were listened to at critical times.
Joyce spent much time at the Qantas annual meeting last Friday week complaining about high fuel costs and then defending the decision not to buy the Boeing 777 — the fuel-efficient superstar of long-haul aircraft that almost all of its competitors use. Pilots point out that using the 777 would save about 80 tonnes of fuel per round trip to Los Angeles compared with the ageing 747 for a similar passenger load. This 80 tonnes per round trip amounts to a free flight (fuel-wise) every fourth trip across the Pacific. This saving alone would account for the alleged $200-million loss to international operations that Qantas uses as justification for its Asian-based airline plans.
Why this aircraft was never ordered continues to be a mystery, perhaps explained by the difference in cost compared with the Airbus A330s that were ordered as part of the A380 order. Some of these aircraft were at bargain basement prices. The A330 is a great aircraft in its niche, but is not capable of carrying economic loads from Sydney to Los Angeles or to London.
Pilots have never been able to escape the suspicion that the higher investment cost of the 777, offered just prior to the APA private equity bid in late 2006, was the deciding factor, and one that is costing the airline dearly today.
The choices facing many Qantas pilots now are stark. Qantas has signalled that it prefers to "rebase" pilots outside Australia, thus avoiding Australia's industrial relations system and requirements to pay onshore costs such as superannuation and payroll tax. Pilots want to know why they should have to to relocate outside Australia to retain a job with an Australian airline, presumably on less pay and minimal conditions. Many may simply be made redundant.
Pilots, trained to be always ready for the worst-case scenario, are beginning to look elsewhere. Their skills are in demand with rival airlines struggling to find quality pilots. Qantas has already lost highly experienced captains to the Middle-Eastern competitors, which it blames for many of its woes.
Each of these pilots represents a substantial monetary investment in training by Qantas that the company is evidently prepared to gift to the competition. A 20-year pilot has undertaken many expensive simulator sessions, plus aircraft endorsements for which Qantas has paid. This means their competitors do not reincur that expense and pilots can be put online almost instantly.
Many are former military pilots whose training the taxpayer funded — more than $1 million per pilot. That investment will be lost to the country.
After last weekend's events, the trickle of pilots leaving to take up positions with other airlines is likely to become a flood. Ironically, Qantas could find itself short of crews in the near term as pilots realise that their dreams of a Qantas career are probably over.
Their one hope lies in a South Australian senator who has taken up the cudgels for them. Senator Nick Xenophon's calls for the federal government to re-enforce the provisions of the 1992 Qantas Sale Act had little support in the halls of Parliament House up until last week. That situation may have changed with the actions of Alan Joyce last weekend. The Senate inquiry began yesterday and Joyce received a grilling from angry senators. Changes to cover the loophole in the act that Qantas management are adept at exploiting may be in the works. (The Qantas Sale Act does not refer to any subsidiaries of Qantas. Therefore Qantas is free to start subsidiaries such as Jetstar and RedQ, and transfer all the flying and jobs into those subsidiaries and offshore if required. The act places very strict conditions on Qantas-branded aircraft, but none on Qantas group aircraft like Jetstar.)
If the changes aren't made, then the worst fears of young Australian pilots such as Peter may be realised. In any case it is hard to see how the relationship between staff can be salvaged.
As Peter told me in the wake of Qantas grounding its fleet, "I have never wanted anything else since being a kid than to be a Qantas pilot — and this joke of a chairman and CEO don't give a rat's. My parents remortgaged for my loan to do flying lessons, and they too, are devastated.
"I am also amazed that, now that this is all over, they expect that we can just get on with it. After showing what they think of us and what they ultimately want to do with our profession, we are expected to go back to work and everything is hunky dory? The relationship is terminally poisoned.
"I would like to see my career out at Qantas, but I fear that its days are numbered, and as such, it's time to start looking elsewhere. As for my friends at Virgin, they were appalled by what happened. But since [John] Borghetti took over, they have never been happier." John Borghetti, CEO of Virgin Blue looks like the only winner from this debacle.
*Peter S is a pseudonym. The author is a current Australian airline pilot. The Saturday Age has withheld the name.
"My gut wrenched as I immediately thought that an aircraft in our fleet must have crashed," Peter later told me.
Pilots are trained to suppress emotion at critical times, so Peter and his captain calmly did as they were ordered. After the engines wound down and the shutdown checklist was complete, the captain learnt that a total airline grounding had been ordered by CEO Alan Joyce.
"I was shocked. I did not understand what we had done to warrant this type of reaction," Peter said.
The captain then explained to his passengers what had happened — that the ground crew, engineers and pilots were to be locked out. He also outlined the pilots' major claim in our industrial negotiations — the principle that Qantas-branded flights be flown by Qantas pilots.
"The cabin erupted in applause in support for us," Peter recounted. "As the passengers disembarked, most stopped to talk, expressing support, dismay, anger and hostility towards Qantas management; especially Joyce. Some were crying in disbelief at what they were doing to us and this company."
Other Qantas pilots registered their shock and anger over the lockout in much the same way. Our industrial action had so far been low-key and designed to avoid the very dislocation that Qantas was now inflicting on its own customers.
For Peter, the situation was only now sinking in. "My fury was growing by the minute. Not so much for locking us out, but at the absolute contempt with the way it had been enacted — the biggest possible disruption to everyone. One of our business class passengers in fact said . . . 'I now understand why staff are unhappy at this airline — this is the style of management you have to put up with. I would never even contemplate treating any of my staff like this, much less my customers. He is a grade-A f------!' "
Qantas staff, including the cabin crew, tried to help their customers in the terminal as best they could, Peter said. "By this stage I was numb. I still could not understand how anyone could think that this was a rational, calm, measured response . . . He [Joyce] was holding a loaded gun at the head of pilots [including those still in the air], engineers, the travelling public, Fair Work Australia and the government. All timed to cause maximum disruption, to everyone with CHOGM [Commonwealth Heads of Government Meeting] and Melbourne Cup. It was an act of true narcissism."
This summed up the general attitude among pilots I spoke with this week. Qantas, unwilling to give an inch on the key sticking point between the parties, had used its economic clout to force government intervention, a termination of industrial action — and, in all likelihood, a binding arbitration decision that will not include the clause that Qantas pilots consider vital to their career prospects.
The grounding marks a nadir in the progressively souring relationship between management and pilots that goes back to the Geoff Dixon era and the setting up of Jetstar. Dixon is quoted in a 2005 interview in ceoforum.com.au as saying that once he had decided to set up Jetstar he didn't talk to the employees unless it was on his terms. "I know some CEOs say, look after your customers, look after your employees, and the returns for shareholders will follow. I do the exact opposite."
As each contract negotiation was signed off in this period, suddenly the plans for Jetstar would expand, cutting into routes previously flown by Qantas pilots (who were effectively barred from entering Jetstar). Joyce, meanwhile, has selectively quoted and distorted the figures to overstate the amount some Qantas pilots are paid.
Joyce has also claimed that pilots want to run the company. We do not — but we wish our expertise in flying matters were listened to at critical times.
Joyce spent much time at the Qantas annual meeting last Friday week complaining about high fuel costs and then defending the decision not to buy the Boeing 777 — the fuel-efficient superstar of long-haul aircraft that almost all of its competitors use. Pilots point out that using the 777 would save about 80 tonnes of fuel per round trip to Los Angeles compared with the ageing 747 for a similar passenger load. This 80 tonnes per round trip amounts to a free flight (fuel-wise) every fourth trip across the Pacific. This saving alone would account for the alleged $200-million loss to international operations that Qantas uses as justification for its Asian-based airline plans.
Why this aircraft was never ordered continues to be a mystery, perhaps explained by the difference in cost compared with the Airbus A330s that were ordered as part of the A380 order. Some of these aircraft were at bargain basement prices. The A330 is a great aircraft in its niche, but is not capable of carrying economic loads from Sydney to Los Angeles or to London.
Pilots have never been able to escape the suspicion that the higher investment cost of the 777, offered just prior to the APA private equity bid in late 2006, was the deciding factor, and one that is costing the airline dearly today.
The choices facing many Qantas pilots now are stark. Qantas has signalled that it prefers to "rebase" pilots outside Australia, thus avoiding Australia's industrial relations system and requirements to pay onshore costs such as superannuation and payroll tax. Pilots want to know why they should have to to relocate outside Australia to retain a job with an Australian airline, presumably on less pay and minimal conditions. Many may simply be made redundant.
Pilots, trained to be always ready for the worst-case scenario, are beginning to look elsewhere. Their skills are in demand with rival airlines struggling to find quality pilots. Qantas has already lost highly experienced captains to the Middle-Eastern competitors, which it blames for many of its woes.
Each of these pilots represents a substantial monetary investment in training by Qantas that the company is evidently prepared to gift to the competition. A 20-year pilot has undertaken many expensive simulator sessions, plus aircraft endorsements for which Qantas has paid. This means their competitors do not reincur that expense and pilots can be put online almost instantly.
Many are former military pilots whose training the taxpayer funded — more than $1 million per pilot. That investment will be lost to the country.
After last weekend's events, the trickle of pilots leaving to take up positions with other airlines is likely to become a flood. Ironically, Qantas could find itself short of crews in the near term as pilots realise that their dreams of a Qantas career are probably over.
Their one hope lies in a South Australian senator who has taken up the cudgels for them. Senator Nick Xenophon's calls for the federal government to re-enforce the provisions of the 1992 Qantas Sale Act had little support in the halls of Parliament House up until last week. That situation may have changed with the actions of Alan Joyce last weekend. The Senate inquiry began yesterday and Joyce received a grilling from angry senators. Changes to cover the loophole in the act that Qantas management are adept at exploiting may be in the works. (The Qantas Sale Act does not refer to any subsidiaries of Qantas. Therefore Qantas is free to start subsidiaries such as Jetstar and RedQ, and transfer all the flying and jobs into those subsidiaries and offshore if required. The act places very strict conditions on Qantas-branded aircraft, but none on Qantas group aircraft like Jetstar.)
If the changes aren't made, then the worst fears of young Australian pilots such as Peter may be realised. In any case it is hard to see how the relationship between staff can be salvaged.
As Peter told me in the wake of Qantas grounding its fleet, "I have never wanted anything else since being a kid than to be a Qantas pilot — and this joke of a chairman and CEO don't give a rat's. My parents remortgaged for my loan to do flying lessons, and they too, are devastated.
"I am also amazed that, now that this is all over, they expect that we can just get on with it. After showing what they think of us and what they ultimately want to do with our profession, we are expected to go back to work and everything is hunky dory? The relationship is terminally poisoned.
"I would like to see my career out at Qantas, but I fear that its days are numbered, and as such, it's time to start looking elsewhere. As for my friends at Virgin, they were appalled by what happened. But since [John] Borghetti took over, they have never been happier." John Borghetti, CEO of Virgin Blue looks like the only winner from this debacle.
*Peter S is a pseudonym. The author is a current Australian airline pilot. The Saturday Age has withheld the name.
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Non Aussie perspective
Someone, apparently an Oriental, posted this in another Pprune forum:
Is the top management severance package ever dependent on last drawn pay? I always thought their golden handshakes are mostly arbitrary rewards of huge sums for jobs well screwed up.
bakutteh
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My 2 cents...Alan Joyce has succeeded in undermining the Qantas brand, a deliberate move so that JetStar can now emerge singularly to challenge VA. Qantas will eventually fade away and the unions can cry for all they want.
It's not Alan Joyce's battle to lose; its's the QF board's war to win. Alan had secured a handsome pay rise and should he come off badly in this battle, he will go away with a wonderful severance package based on the new pay. He can go away with all the curses and brickbats; but he has won the war for the QF board.
Alan Joyce will be nicely rewarded elsewhere; he has gathered ordnance for Tony Abbot to bomb away at Julia Gillard's government. Soon we will have many hug a ginga days!
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My 2 cents...Alan Joyce has succeeded in undermining the Qantas brand, a deliberate move so that JetStar can now emerge singularly to challenge VA. Qantas will eventually fade away and the unions can cry for all they want.
It's not Alan Joyce's battle to lose; its's the QF board's war to win. Alan had secured a handsome pay rise and should he come off badly in this battle, he will go away with a wonderful severance package based on the new pay. He can go away with all the curses and brickbats; but he has won the war for the QF board.
Alan Joyce will be nicely rewarded elsewhere; he has gathered ordnance for Tony Abbot to bomb away at Julia Gillard's government. Soon we will have many hug a ginga days!
Is the top management severance package ever dependent on last drawn pay? I always thought their golden handshakes are mostly arbitrary rewards of huge sums for jobs well screwed up.
Last edited by Namor; 5th Nov 2011 at 09:12.
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Disengagement, you got it!
Qantas CEO A.Joyce steps down as CEO over the grounding of the Qantas fleet and takes up the position Chairman of Qantas Group Asia Network.
Slightly different perspective - we have all heard how AJ says "it was the ONLY option". He effectively acknowledged that people may have died because their medical care may have been compromised and that his actions had a dramatic impact on the country's economy.
Think for a minute if there was a national power company that did the same. Shutting down the entire country's power supply because it was the ONLY option
This should be enough for the Government to demand AJ be sacked and buy back 51% of Qantas. If its good enough for the likes of NZ, SQ, EY, EK etc to be Government controlled its good enough (and essential for Australia) that Qantas is protected from an evil CEO and irresponsible board
Remember it was the QF board that wanted to send QF broke with the private equity buyout. Time to take back control of our icon
Think for a minute if there was a national power company that did the same. Shutting down the entire country's power supply because it was the ONLY option
This should be enough for the Government to demand AJ be sacked and buy back 51% of Qantas. If its good enough for the likes of NZ, SQ, EY, EK etc to be Government controlled its good enough (and essential for Australia) that Qantas is protected from an evil CEO and irresponsible board
Remember it was the QF board that wanted to send QF broke with the private equity buyout. Time to take back control of our icon
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It is not essential to have QANTAS, they are just over represented in the market, bit more diversification and the other carriers get a bit bigger and it doesn't matter.
We in West Australia saw next to stuff all of QANTAS on our regional routes for decades. They where serviced by MMA Ansett etc. Now Sky West, with QANTAS in the act as well.
The problem is there isn't enough capacity in the other carriers to pick up enough of the slack where its most needed, that will changed. Having so called national airlines, flag carriers is a obsolete view of piss ant nations. We don't need it.
We in West Australia saw next to stuff all of QANTAS on our regional routes for decades. They where serviced by MMA Ansett etc. Now Sky West, with QANTAS in the act as well.
The problem is there isn't enough capacity in the other carriers to pick up enough of the slack where its most needed, that will changed. Having so called national airlines, flag carriers is a obsolete view of piss ant nations. We don't need it.
Having so called national airlines, flag carriers is a obsolete view of piss ant nations. We don't need it.
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ACTU against Freehills. Labor against Liberal. Corporate elites against workers. Thank God we live in a democracy. The Labor party performance in parliament this week has given new hope to the PM and Labor. Love them or hate them you have to admit that as Qantas employees it is reassuring to finally have the Government appearing to back us and using the weekends cluster * uck to high light the Liberals way of doing business. I was a liberal voter but perhaps never again. There is I believe after the GFC a ground swell of contempt for the way some Corporations behave and attempt to manipulate information for their own ends. To have a small voice through this and other forums plus the use of twitter during the FWA hearing gives me some hope. Imagine if the 89ers had the ability to communicate so freely and quickly as we do now? Bill Shorten said Qantas lacks leadership and now we can observe at first hand through live feeds, just how prophetic his judgement is.
I will be here at Qantas long after Clifford and Joyce are gone. We are like most employees the true custodians of Qantas. The true believers.
I will be here at Qantas long after Clifford and Joyce are gone. We are like most employees the true custodians of Qantas. The true believers.
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That is one view. BUT all the airlines that are eating into Qantas' profits/market share are all national airlines/flag carriers owned or part owned by Governments
There is I believe after the GFC a ground swell of contempt for the way some Corporations behave and attempt to manipulate information for their own ends.
Virgin doesn't seem to bee doing to badly without being government owned.
Remember Virgin are only still here because of Ansett's demise. They were being squeezed out when Ansett was still alive. Virgin are yet to show a sustained profit and I am hopeful this will turn around. Reality is V Australia has been losing a fortune. The company posted a net loss of $67.8 million for the 12 months to June 30, compared with a profit of $21.3 million a year earlier
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What was evident from the hearings yesterday is that the culture at QF is toxic and this will inevitably translate to the service passengers get on board. At the end of the day the revenues - especially the high yield revenue - depends on service. How do both sides intend to address that and not lose out to the airlines that are providing a far superior product in terms of service.
