At Last, Common Sense About the Qantas Situation
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At Last, Common Sense About the Qantas Situation
Same here Keg! Well done Dick for again pointing the finger correctly at where the real blame lies for the woes of Australian international air carriers. Other Australian start up airlines may have come into being also, were it not for the strange antics of our own legislators. We've given our market to foreigners with little gained in return.
(Something odd in the order of posts here! Had the same problem on another thread. Is the Pprune server ill?)
(Something odd in the order of posts here! Had the same problem on another thread. Is the Pprune server ill?)
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Dick, the real question is why are there different prices in different countries for the same goods or service? The answer is the current global currency system allow countries to manipulate currencies to suit themselves. The entire system that functioned for 500 years was abandoned in 1922 at the Genoa Conference. It is the system that is totally dysfunctional because the system is broken.
For instance, look at the US, it consumes ~25% of the worlds oil, yet its production of goods and services would be well below 25% of global production. The current financial system allows some to over-consume (US Europe ex-Germany), and some to over-save (Germany, China). This will always end up as a disaster. Simple double entry accounting tells you that every credit must have an equal debit.
Here is an essay that looks at this very issue, and the history going back 500 years to explain how we got into the mess we are in: Once Upon a Time.
Currently there is no natural market mechanism to resolve these imbalances of credits & debits. The global market & price discovey system is so broken & until that is resolved, exposing your industries is purer folly.
For instance, look at the US, it consumes ~25% of the worlds oil, yet its production of goods and services would be well below 25% of global production. The current financial system allows some to over-consume (US Europe ex-Germany), and some to over-save (Germany, China). This will always end up as a disaster. Simple double entry accounting tells you that every credit must have an equal debit.
Here is an essay that looks at this very issue, and the history going back 500 years to explain how we got into the mess we are in: Once Upon a Time.
Currently there is no natural market mechanism to resolve these imbalances of credits & debits. The global market & price discovey system is so broken & until that is resolved, exposing your industries is purer folly.
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Long time reader - first time poster
I've been reading Pprune for some time now, and have to confess, I have no connection with the aviation industry, other than being infrequent SLF.
I had a thought about ways to make Australian based airlines more competitive
The idea I've had, which I'm putting up the flag pole is as follows:
Change the tax laws so that Australian owned airlines can depreciate aircraft 100% on acquisition, so long as 100% of the maintenance work is carried out in Australia. It seems to me that other airlines receive various benefits that aren't available to Australian based airlines. Something as simple as this would at least provide some small competitive advantage.
Think about what that might mean.
Airlines are encouraged to invest in current (more efficient) equipment - and to do so as frequently as they like.
Local maintenance skills are current - to the point of being at the leading edge.
Passengers get a better product.
There may be other benefits that aren't obvious to me. And of course, there may be reasons why it can't be done that I'm not aware of as well.
Anyway - my 2 cents. Thanks for providing me with interesting reads over the past few months, and the best of luck with your challenges.
D
I had a thought about ways to make Australian based airlines more competitive
The idea I've had, which I'm putting up the flag pole is as follows:
Change the tax laws so that Australian owned airlines can depreciate aircraft 100% on acquisition, so long as 100% of the maintenance work is carried out in Australia. It seems to me that other airlines receive various benefits that aren't available to Australian based airlines. Something as simple as this would at least provide some small competitive advantage.
Think about what that might mean.
Airlines are encouraged to invest in current (more efficient) equipment - and to do so as frequently as they like.
Local maintenance skills are current - to the point of being at the leading edge.
Passengers get a better product.
There may be other benefits that aren't obvious to me. And of course, there may be reasons why it can't be done that I'm not aware of as well.
Anyway - my 2 cents. Thanks for providing me with interesting reads over the past few months, and the best of luck with your challenges.
D
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Where to now for Qantas?
Greg J. Bamber is a professor with the Department of Management at Monash University, and co-author of Up in the Air: How Airlines Can Improve Performance by Engaging their Employees
Where to now for Qantas? | Greg J Bamber | Commentary | Business Spectator
Interesting points here.....
ps, some bug placed this post out of order, sorry about the thanksgiving bug....
Greg J. Bamber is a professor with the Department of Management at Monash University, and co-author of Up in the Air: How Airlines Can Improve Performance by Engaging their Employees
Where to now for Qantas? | Greg J Bamber | Commentary | Business Spectator
How did it get to this?
After Qantas grounded its world-wide fleet on October 29, 2011, Fair Work Australia convened a “full bench” of three members who listened to submissions from the parties, working late into the night on that Saturday and Sunday. Then FWA determined that Qantas and the three unions that were in dispute with it should terminate all industrial action. FWA awarded the parties in dispute a period of 21 days in which to try to negotiate settlements. The parties were obliged to engage in bargaining “in good faith”.
That deadline passed at midnight on Monday, so the parties now move to binding arbitration determined by the FWA. Such settlements could last for up to four years.
What happens in arbitration?
In the next few days, with FWA’s help, Qantas and the unions will work through which aspects of the disputes have already been mutually agreed and which would be determined by arbitration. The arbitration process could be accelerated if the parties could narrow down which issues remain to be arbitrated, that is decided by FWA.
Nonetheless, in view of the complexities of this case, the arbitration process is not likely to be concluded until 2012. The FWA determinations are not entirely predictable, except that it is unlikely that FWA will award a complete victory to any party.
Qantas seems to be assuming that FWA would not make decisions that would seriously encroach on what employers refer to under such headings as “business decisions” and “managerial prerogatives.” These might include which work is conducted, by whom and in which country that work is performed. Qantas see its proposals to outsource more work and establish more subsidiaries overseas as falling under such headings. This is why Qantas generally seems to be less concerned than some of the unions about the possible outcomes of the arbitration process.
Nevertheless, FWA will no doubt listen to lots of submissions from the parties including expert witnesses and allegations that some of the earlier bargaining was not being conducted in good faith.
In the meantime, the challenge for all the parties is to rebuild trust, to restore good working relationships and to rescue Qantas’s reputation with its staff, customers, the government and other stakeholders.
Could there be further industrial action?
While arbitration is proceeding, there should also be no discrimination again those who were involved in the earlier industrial action. These parties are not allowed to take part in further industrial action.
But this ban on further industrial action does not apply to overseas unions. This could be a vulnerability for Qantas, since it is possible that the London-based International Transport Workers' Federation of unions might campaign further against Qantas.
The ITF was a key player in the waterfront dispute in the late 1990s. The ITF recently coordinated union members from around the world staging protests on 16 November 2011 to show their solidarity with Qantas workers who are in dispute. Protesters gathered outside the Australian High Commission in London as part of this “Qantas action day”, to demonstrate support for airline staff engaged in this dispute in Australia.
How did all this start?
Qantas was founded in 1920 in Queensland, in outback Australia. It is now one of the oldest airlines in the world. Qantas grew to become one of Australia’s most famous brands, with a great reputation and its largest airline (the “national flag carrier”) and is one of the few airlines that flies to all inhabited continents. Qantas was owned by the Australian government for many years, until it was fully privatised in 1995.
Much more recently, the unions that represent three important categories of Qantas staff had been trying to negotiate with Qantas new “enterprise bargaining agreements”: the Transport Workers Union of Australia, the Australian and International Pilots Union and the Australian Licensed Aircraft Engineers Association. The issues differ in each case, but all include the levels of pay and aspects of outsourcing and job security.
After many negotiations between Qantas and of these three unions, each union balloted their members then deployed relatively mild industrial-relations sanctions. These were lawful forms of “protected industrial action.”
In retaliation, on October 29, 2011, Qantas CEO Alan Joyce made the radical decision to ground Qantas’s worldwide fleet immediately. He also announced that two days later, Qantas would lock out its staff who are represented by the three unions involved. These workers would not be paid while locked out.
This tactic threatened to damage Qantas’s reputation. It disrupted many of its customers and its workforce. But Alan Joyce held that he had no alternative. His aim was to trigger government intervention.
In my view he could have achieved the same outcome in other ways.
However, his tactic appeared to succeed because it precipitated a national crisis, since Australia is a large island continent, which depends on airlines to transport people and goods to overseas destinations and within Australia. Unfortunately, Australia does not have high-speed rail or road connections between its major cities. Therefore, the federal government asked its agency, FWA, to intervene immediately.
The role of Fair Work Australia
FWA is the national workplace-relations tribunal. It is impartial and sometimes called the industrial-relations umpire. Its decision to terminate industrial action by the unions still faces the possibility of a legal challenge by two of the unions: the Australian and International Pilots Association and the Transport Workers Union. However, Qantas and the federal government are strongly opposing any such legal challenge.
Some commentators have observed that FWA is a relatively new institution (it was born on 1 July 2009) and that this is its biggest test so far. Although FWA is only two and a half years old, it has much experience on which to draw.
Its predecessor institutions include the Australian Industrial Relations Commission. FWA inherited all of the AIRC’s rich expertise. Its members are well versed in dispute settlement. Before being appointed to FWA or one of its predecessor institutions; most FWA members had worked as industrial-relations practitioners, either as officials of unions, employers, governments or in the field of industrial law. So it is not necessary to worry about FWA’s skills in this field.
After Qantas grounded its world-wide fleet on October 29, 2011, Fair Work Australia convened a “full bench” of three members who listened to submissions from the parties, working late into the night on that Saturday and Sunday. Then FWA determined that Qantas and the three unions that were in dispute with it should terminate all industrial action. FWA awarded the parties in dispute a period of 21 days in which to try to negotiate settlements. The parties were obliged to engage in bargaining “in good faith”.
That deadline passed at midnight on Monday, so the parties now move to binding arbitration determined by the FWA. Such settlements could last for up to four years.
What happens in arbitration?
In the next few days, with FWA’s help, Qantas and the unions will work through which aspects of the disputes have already been mutually agreed and which would be determined by arbitration. The arbitration process could be accelerated if the parties could narrow down which issues remain to be arbitrated, that is decided by FWA.
Nonetheless, in view of the complexities of this case, the arbitration process is not likely to be concluded until 2012. The FWA determinations are not entirely predictable, except that it is unlikely that FWA will award a complete victory to any party.
Qantas seems to be assuming that FWA would not make decisions that would seriously encroach on what employers refer to under such headings as “business decisions” and “managerial prerogatives.” These might include which work is conducted, by whom and in which country that work is performed. Qantas see its proposals to outsource more work and establish more subsidiaries overseas as falling under such headings. This is why Qantas generally seems to be less concerned than some of the unions about the possible outcomes of the arbitration process.
Nevertheless, FWA will no doubt listen to lots of submissions from the parties including expert witnesses and allegations that some of the earlier bargaining was not being conducted in good faith.
In the meantime, the challenge for all the parties is to rebuild trust, to restore good working relationships and to rescue Qantas’s reputation with its staff, customers, the government and other stakeholders.
Could there be further industrial action?
While arbitration is proceeding, there should also be no discrimination again those who were involved in the earlier industrial action. These parties are not allowed to take part in further industrial action.
But this ban on further industrial action does not apply to overseas unions. This could be a vulnerability for Qantas, since it is possible that the London-based International Transport Workers' Federation of unions might campaign further against Qantas.
The ITF was a key player in the waterfront dispute in the late 1990s. The ITF recently coordinated union members from around the world staging protests on 16 November 2011 to show their solidarity with Qantas workers who are in dispute. Protesters gathered outside the Australian High Commission in London as part of this “Qantas action day”, to demonstrate support for airline staff engaged in this dispute in Australia.
How did all this start?
Qantas was founded in 1920 in Queensland, in outback Australia. It is now one of the oldest airlines in the world. Qantas grew to become one of Australia’s most famous brands, with a great reputation and its largest airline (the “national flag carrier”) and is one of the few airlines that flies to all inhabited continents. Qantas was owned by the Australian government for many years, until it was fully privatised in 1995.
Much more recently, the unions that represent three important categories of Qantas staff had been trying to negotiate with Qantas new “enterprise bargaining agreements”: the Transport Workers Union of Australia, the Australian and International Pilots Union and the Australian Licensed Aircraft Engineers Association. The issues differ in each case, but all include the levels of pay and aspects of outsourcing and job security.
After many negotiations between Qantas and of these three unions, each union balloted their members then deployed relatively mild industrial-relations sanctions. These were lawful forms of “protected industrial action.”
In retaliation, on October 29, 2011, Qantas CEO Alan Joyce made the radical decision to ground Qantas’s worldwide fleet immediately. He also announced that two days later, Qantas would lock out its staff who are represented by the three unions involved. These workers would not be paid while locked out.
This tactic threatened to damage Qantas’s reputation. It disrupted many of its customers and its workforce. But Alan Joyce held that he had no alternative. His aim was to trigger government intervention.
In my view he could have achieved the same outcome in other ways.
However, his tactic appeared to succeed because it precipitated a national crisis, since Australia is a large island continent, which depends on airlines to transport people and goods to overseas destinations and within Australia. Unfortunately, Australia does not have high-speed rail or road connections between its major cities. Therefore, the federal government asked its agency, FWA, to intervene immediately.
The role of Fair Work Australia
FWA is the national workplace-relations tribunal. It is impartial and sometimes called the industrial-relations umpire. Its decision to terminate industrial action by the unions still faces the possibility of a legal challenge by two of the unions: the Australian and International Pilots Association and the Transport Workers Union. However, Qantas and the federal government are strongly opposing any such legal challenge.
Some commentators have observed that FWA is a relatively new institution (it was born on 1 July 2009) and that this is its biggest test so far. Although FWA is only two and a half years old, it has much experience on which to draw.
Its predecessor institutions include the Australian Industrial Relations Commission. FWA inherited all of the AIRC’s rich expertise. Its members are well versed in dispute settlement. Before being appointed to FWA or one of its predecessor institutions; most FWA members had worked as industrial-relations practitioners, either as officials of unions, employers, governments or in the field of industrial law. So it is not necessary to worry about FWA’s skills in this field.
Interesting points here.....
ps, some bug placed this post out of order, sorry about the thanksgiving bug....
The government does it for the car industry. We are paying way too much for cars in this country compared to other countries like the UK/USA etc etc [taxes being accounted for] to keep a few jobs at Ford/Holden and Toyota who's profits go straight back to Detroit or Tokyo....WHY?
Meanwhile QF and any other Australian owned manufacturing business competes on a very un-level playing field in the name of competition.
Meanwhile QF and any other Australian owned manufacturing business competes on a very un-level playing field in the name of competition.
Warren9 I agree. I don't think our democracy will vote in politicians who will give some protection to Australian owned Airlines as the Canadian Government gives to their own carriers.
In that case Qantas International will have to move to lower globalised wages and productivity or go broke. I can't see any other alternative.
So blame all of us who vote and want lower globalised prices on everything we purchase.
In that case Qantas International will have to move to lower globalised wages and productivity or go broke. I can't see any other alternative.
So blame all of us who vote and want lower globalised prices on everything we purchase.
At Last, Common Sense About the Qantas Situation
I noticed this letter which was sent to the Sydney Morning Herald this week by Captain Paul Strachan, President of the Air Canada Pilots Association. I’m not sure if it has been placed on this site before – if so, no doubt an administrator can remove this post – but if not, here is the text. I believe this letter is important and factual:
I have noticed some federal politicians attacking Qantas management and other federal politicians attacking the unions when, in fact, it is the politicians who have caused the situation!
If you open Australia up to low global prices, you must end up paying low global wages. That’s just common sense.
Yes, free trade and globalisation have provided some great advantages for most Australian consumers; but I wonder if we should look at extending the way we protect the livelihood of some powerful people in our community (such as politicians and barristers) against low-cost global competition to also include our airlines?
Just a thought.
Qantas dispute a wake-up call to Canberra
While attention in Australia is focused on the struggles between Qantas management and its employees (''More passenger pain possible as Qantas dispute heads to umpire'', November 22), we also see news from Dubai that Emirates airline has just announced plans to acquire 50 more Boeing 777 aircraft.
We wonder whether anyone in Australia has connected these dots.
The seeds of Qantas's challenges were sown more than 15 years ago, when Australia's government granted virtually unrestricted air access rights to foreign state-owned carriers such as Emirates.
Emirates is now the largest international airline in the world, ostensibly serving a country slightly larger than Tasmania with a population the size of the greater Sydney area. This airline has grown disproportionately, not by serving its own minuscule market, but by dumping capacity into markets like Australia, pulling passengers destined for other international locations through its state-built super-hub.
The Arabian Gulf states operate their airlines as instruments of economic development policy. Their vertically integrated business models include everyone from the head of state to the janitorial staff, including regulators, navigation, airports and support services.
These predatory airlines have dumped so much capacity into the Australian market that your national airline now finds itself in distress. No airline in the developed world could endure such an attack, unless its government is prepared to similarly subsidise its operations and forgive all forms of taxation.
What Australians are witnessing is the result of unsustainable public policy.
While Qantas employees and management battle for the hearts and minds of the public, it was their own government that abandoned to these predators the thousands of Australians who benefit from employment in your aviation industry and many more at its suppliers.
If there is a silver lining for us, it is that we have been able to use Australia as a shining example of what not to do with international air policy. The government of Canada has adopted a far more principled and studied approach.
This is cold comfort for our colleagues at Qantas and the citizens of Australia. The Australian government needs a wake-up call.
While attention in Australia is focused on the struggles between Qantas management and its employees (''More passenger pain possible as Qantas dispute heads to umpire'', November 22), we also see news from Dubai that Emirates airline has just announced plans to acquire 50 more Boeing 777 aircraft.
We wonder whether anyone in Australia has connected these dots.
The seeds of Qantas's challenges were sown more than 15 years ago, when Australia's government granted virtually unrestricted air access rights to foreign state-owned carriers such as Emirates.
Emirates is now the largest international airline in the world, ostensibly serving a country slightly larger than Tasmania with a population the size of the greater Sydney area. This airline has grown disproportionately, not by serving its own minuscule market, but by dumping capacity into markets like Australia, pulling passengers destined for other international locations through its state-built super-hub.
The Arabian Gulf states operate their airlines as instruments of economic development policy. Their vertically integrated business models include everyone from the head of state to the janitorial staff, including regulators, navigation, airports and support services.
These predatory airlines have dumped so much capacity into the Australian market that your national airline now finds itself in distress. No airline in the developed world could endure such an attack, unless its government is prepared to similarly subsidise its operations and forgive all forms of taxation.
What Australians are witnessing is the result of unsustainable public policy.
While Qantas employees and management battle for the hearts and minds of the public, it was their own government that abandoned to these predators the thousands of Australians who benefit from employment in your aviation industry and many more at its suppliers.
If there is a silver lining for us, it is that we have been able to use Australia as a shining example of what not to do with international air policy. The government of Canada has adopted a far more principled and studied approach.
This is cold comfort for our colleagues at Qantas and the citizens of Australia. The Australian government needs a wake-up call.
Captain Paul Strachan, President, Air Canada Pilots Association, Mississauga, Canada
If you open Australia up to low global prices, you must end up paying low global wages. That’s just common sense.
Yes, free trade and globalisation have provided some great advantages for most Australian consumers; but I wonder if we should look at extending the way we protect the livelihood of some powerful people in our community (such as politicians and barristers) against low-cost global competition to also include our airlines?
Just a thought.
Nunc est bibendum
Wow. I see eye to eye with Dick Smith? Who'd a thunk it!
However, I don't think we should let Qantas management off the hook completely. Poor fleet structure and decision making, failing to compete on various routesand continuing to believe that routing all European pax through either LHR or FRA would be a winning strategy. Many of those could be expanded but yes, we've allowed unfettered access to carriers who are NOT playing to the same rules that we are.
However, I don't think we should let Qantas management off the hook completely. Poor fleet structure and decision making, failing to compete on various routesand continuing to believe that routing all European pax through either LHR or FRA would be a winning strategy. Many of those could be expanded but yes, we've allowed unfettered access to carriers who are NOT playing to the same rules that we are.
It's obvious. We now have no substantial Australian owned and crewed shipping even though we are a big exporter. Why???
We'll soon have no Australian international airlines either. QF must get out into the other people's patch and build a base.
By the way half Virgin's international network is built on code share which means others aircraft/crew/ etc etc...nothing to help Aussie jobs in that. Also note that the 6th B777 for them to be used to Middle East is deferred.
Wake up all of Australia including the Govt. & unions.
The travelling public, like the shippers, vote with their wallets...
We'll soon have no Australian international airlines either. QF must get out into the other people's patch and build a base.
By the way half Virgin's international network is built on code share which means others aircraft/crew/ etc etc...nothing to help Aussie jobs in that. Also note that the 6th B777 for them to be used to Middle East is deferred.
Wake up all of Australia including the Govt. & unions.
The travelling public, like the shippers, vote with their wallets...
Totally agree but what does the Goverment do?
Qantas have identified this issue already.
Emirates, Ethiad and Qatar all enjoy competitive advantage that Qantas could never hope to even match!
Infact the issue is not just with Australia, all the competitors to the above have the same problem. Hence the reaction from the ACPA President.
What do you do?
Qantas have identified this issue already.
Emirates, Ethiad and Qatar all enjoy competitive advantage that Qantas could never hope to even match!
Infact the issue is not just with Australia, all the competitors to the above have the same problem. Hence the reaction from the ACPA President.
What do you do?
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The idea I've had, which I'm putting up the flag pole is as follows:
Change the tax laws so that Australian owned airlines can depreciate aircraft 100% on acquisition, so long as 100% of the maintenance work is carried out in Australia.
Change the tax laws so that Australian owned airlines can depreciate aircraft 100% on acquisition, so long as 100% of the maintenance work is carried out in Australia.
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Do it for QF and you'll have todo it for a lot of other large outfits, not just aviation.
Wasnt Julia in the news recently about some free trade "ear bash" for the Pacific region?
Never gonna happen.
Wasnt Julia in the news recently about some free trade "ear bash" for the Pacific region?
Never gonna happen.
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It's called Stokholm Syndrome, you are not agreeing with Dicky, you are now in agreement with AJ...! QF and AC are the same, they let the world go by and now look for a scape goat for their poor management over the last decade. Compare the ACPA presidents comments with the UK. The middle east airlines send boat loads of traffic to LHR and LGW yet BA management see it as a good thing for the economy and therefor their business. What's the difference between BA, QF and AC? BA fly to Dubai, they compete where as the others winge.
Moderator
I believe Dick Smith started this thread and Dick's Post #7 is in fact, the first post for the thread.
See my stickied Thread in this Forum about the date/time stamp problem in PPRuNe software.
I am seeking advice from Site Admins in the UK whether I can manually manipulate the posting sequence, but I don't think that is possible.
I guess the earliest the problems can possibly be fixed will be when the turkeys return to work on Tuesday, after the Thanksgiving holiday in the US!
My apologies for the out of sequence posts.
See my stickied Thread in this Forum about the date/time stamp problem in PPRuNe software.
I am seeking advice from Site Admins in the UK whether I can manually manipulate the posting sequence, but I don't think that is possible.
I guess the earliest the problems can possibly be fixed will be when the turkeys return to work on Tuesday, after the Thanksgiving holiday in the US!
My apologies for the out of sequence posts.
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Now it makes more sense, Dixon appears.
Just posted on crikey.com.au
Qantas ‘strategic’ bid confirmation by Dixon puts Joyce and Clifford in a very tough place
November 26, 2011 – 7:31 am, by Ben Sandilands
This morning’s confirmation in The Australian of a plan by former Qantas CEO Geoff Dixon to buy a ‘strategic’ stake in the airline puts its current CEO Alan Joyce and chairman Leigh Clifford at risk.
That risk arises from their claims to have no knowledge of any move on Qantas by interested parties, claims made in various interviews and at the Qantas AGM of 28 October, the day before Alan Joyce insists that he woke up and said to himself it was time to ground the airline without warning to all those customers it kept selling fares to for flights that wouldn’t operate.
Joyce and Clifford are potentially compromised by the revelations because while they are required to maximise returns to Qantas shareholders, Joyce knew from a date in May that his predecessor was involved in a plan to take advantage of the low share price to buy a strategic stake.
If we assume that Joyce informed his chairman Clifford of this materially significant intelligence then Clifford is going to come under intense scrutiny for the way he chose to handle that information. If Clifford didn’t know anything about, he is at risk for failing to exercise diligent oversight of the performance of his CEO, not to mention failing to investigate persistent media reporting of market talk of an impending play on an undervalued Qantas.
There is an obvious tension between Joyce knowing about a potential play based on a declining share price, and his role as CEO to maximise the company’s value.
There is an enormous body of video audio records of Joyce and Clifford batting away speculation about a bid between May and end of October. Dixon would have known this when he chose to disclose the true state of affairs to The Australian’s business affairs journalist Damon Kitney, and this means investors and employees need to know what will be the consequences, intended or otherwise, from this story being lobbed at this moment.
It is implausible that Dixon had a Joyce moment, woke up and thought it was time to suddenly tell all, as distinct from spontaneously grounding the entire airline.
One thing is clear. Qantas stock has been traded for months without all investors being in possession of all of the information known to Joyce. On what basis did Joyce choose not to share his information about the matters raised by Dixon? And who else knew?
This management has some credibility and transparency issues. Joyce broke all the normal protocols in going public over ‘death threats’ that a subsequent police task force investigated without result for weeks and at considerable public expense, and according to some reports, achieving no result because of the later intervention of Qantas.
He has been materially contradicted over the spontaneity of his decision to ground the airline, and break Australian consumer law, on 29 October, by evidence concerning hotel bookings, and the courier arrangements made well in advance for the individual delivery of lock out notices to some 30,000 Qantas employees, and he has given inconsistent guidance about plans for a premium narrow body Asia based carrier that will variously cost 1000 jobs, no jobs, be based in Singapore or Malaysia, and while only minority owned, will save the fortunes of Qantas international, which in the meantime is being reduced in size.
This is an enterprise in which the unions, the focus of management finger pointing, could disappear tomorrow and it would remain in severe decline because of its failures in managing its brand, its product, its fleet and its network.
Like the police death threats fiasco, the Dixon disclosures leave a very bad smell hanging over this management.
Qantas ‘strategic’ bid confirmation by Dixon puts Joyce and Clifford in a very tough place
November 26, 2011 – 7:31 am, by Ben Sandilands
This morning’s confirmation in The Australian of a plan by former Qantas CEO Geoff Dixon to buy a ‘strategic’ stake in the airline puts its current CEO Alan Joyce and chairman Leigh Clifford at risk.
That risk arises from their claims to have no knowledge of any move on Qantas by interested parties, claims made in various interviews and at the Qantas AGM of 28 October, the day before Alan Joyce insists that he woke up and said to himself it was time to ground the airline without warning to all those customers it kept selling fares to for flights that wouldn’t operate.
Joyce and Clifford are potentially compromised by the revelations because while they are required to maximise returns to Qantas shareholders, Joyce knew from a date in May that his predecessor was involved in a plan to take advantage of the low share price to buy a strategic stake.
If we assume that Joyce informed his chairman Clifford of this materially significant intelligence then Clifford is going to come under intense scrutiny for the way he chose to handle that information. If Clifford didn’t know anything about, he is at risk for failing to exercise diligent oversight of the performance of his CEO, not to mention failing to investigate persistent media reporting of market talk of an impending play on an undervalued Qantas.
There is an obvious tension between Joyce knowing about a potential play based on a declining share price, and his role as CEO to maximise the company’s value.
There is an enormous body of video audio records of Joyce and Clifford batting away speculation about a bid between May and end of October. Dixon would have known this when he chose to disclose the true state of affairs to The Australian’s business affairs journalist Damon Kitney, and this means investors and employees need to know what will be the consequences, intended or otherwise, from this story being lobbed at this moment.
It is implausible that Dixon had a Joyce moment, woke up and thought it was time to suddenly tell all, as distinct from spontaneously grounding the entire airline.
One thing is clear. Qantas stock has been traded for months without all investors being in possession of all of the information known to Joyce. On what basis did Joyce choose not to share his information about the matters raised by Dixon? And who else knew?
This management has some credibility and transparency issues. Joyce broke all the normal protocols in going public over ‘death threats’ that a subsequent police task force investigated without result for weeks and at considerable public expense, and according to some reports, achieving no result because of the later intervention of Qantas.
He has been materially contradicted over the spontaneity of his decision to ground the airline, and break Australian consumer law, on 29 October, by evidence concerning hotel bookings, and the courier arrangements made well in advance for the individual delivery of lock out notices to some 30,000 Qantas employees, and he has given inconsistent guidance about plans for a premium narrow body Asia based carrier that will variously cost 1000 jobs, no jobs, be based in Singapore or Malaysia, and while only minority owned, will save the fortunes of Qantas international, which in the meantime is being reduced in size.
This is an enterprise in which the unions, the focus of management finger pointing, could disappear tomorrow and it would remain in severe decline because of its failures in managing its brand, its product, its fleet and its network.
Like the police death threats fiasco, the Dixon disclosures leave a very bad smell hanging over this management.
Join Date: Mar 2011
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I have noticed some federal politicians attacking Qantas management and other federal politicians attacking the unions when, in fact, it is the politicians who have caused the situation!
If you open Australia up to low global prices, you must end up paying low global wages. That’s just common sense.
If you open Australia up to low global prices, you must end up paying low global wages. That’s just common sense.
How can any Australian business compete with another business located in an area where their cost base is significantly lower?
It does not matter if the industry is manufacturing,transport or agriculture.
We complain about corporate Australia and their apparent self interest but the matter is allowed and in fact seemingly encouraged by Australian politicians.
For years Australian politicians have not been content to concentrate and work in Australia for Australians but seem to have a penchant to be players on the world stage at the expense of the Australian population.
Our politicians seem to look no further than the next election and even that exposition maybe more generous than they deserve.
If this is allowed to continue we as Australians will be nothing more than consumers.
There is no such thing as a level playing field.
We have become the 'Me' society in which as others have said is that all that matters is the cost to the consumer with no regard to the ramifications of this economic ideology.
If this continues the only growth industry in Australia will be Centrelink
Join Date: Nov 2007
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If I was an ex-CEO, hypothetically I could wait till all of the dust settles from the previous takeover. Then armed with the experience (and knowing some intricacies) of the previous bid, construct then launch my own at a later stage. I could offer the incoming CEO a tidy package (say 60mill, call it an performance based or incentive bonus) and keep it under wraps until the time was right. I would also be pretty keen to lobby the company to hoard a bit of cash from the shareholder, and smash it's cost base to buggar all, and sidestep all of this Australian sales act crap. Then step in when the share price is on the cheap and make a motza from the capital losses of the public and institutional investors.
Join Date: Sep 2010
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Free trade is a wonderful mantra. Then there is fair trade, another thing entirely.
Then there is sensible taxation policy. Look no further than the MRRT fiasco. Ken Henry is commissioned to review the Australian taxation system and comes up with a comprehensive proposal to address the two-speed economy: a broad based resource rent (super-profit) tax to pay for a 5% reduction in company tax, among a couple hundred other very considered and much needed reforms. What does the Govt do? Butchers the idea of the resource rent tax and uses it to pay for an increase in employer superannuation contributions from 9% to 12%. This wil add labour costs to every company in the country. Precisely how does this measure deal with the two speed economy?
It is this complete lack of strategic, holistic thinking, knee-jerk reaction to media campaigns & vested interests that is leading parts of this country's economy down the road to eventual ruin.
Then there is sensible taxation policy. Look no further than the MRRT fiasco. Ken Henry is commissioned to review the Australian taxation system and comes up with a comprehensive proposal to address the two-speed economy: a broad based resource rent (super-profit) tax to pay for a 5% reduction in company tax, among a couple hundred other very considered and much needed reforms. What does the Govt do? Butchers the idea of the resource rent tax and uses it to pay for an increase in employer superannuation contributions from 9% to 12%. This wil add labour costs to every company in the country. Precisely how does this measure deal with the two speed economy?
It is this complete lack of strategic, holistic thinking, knee-jerk reaction to media campaigns & vested interests that is leading parts of this country's economy down the road to eventual ruin.
Join Date: Oct 2007
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Yes and I note John Singleton was also involved. Being of a suspicious nature and knowing you would not buy a washing machine from either of them, was the plan to takeover then flog to the highest bidder? Could they do that under the Qantas sales act, could they get around it with a lot of brown paper bags? Forgive my scepticism but neither of these two gentlemen go into anything that does not have a quick buck attached to it I also agree he has put both Joyce and Clifford in a difficult position. I had heard of this before from a Journo some months back, but put it down to rumor rather than fact. Once more I was wrong. Dixon must have be totally galled at the loss of so much money when Qantas failed to sell last time, perhaps he is just waiting his chance again.