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Court Action Against Qantas

Old 2nd Jan 2014, 01:52
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Court Action Against Qantas

Hi all.

Hope we are all enjoying the festive season. I am away camping with the kids but even here at the Ocean Grove Caravan Park where I am with ALAEA President Paul Cousins, some Pilots and Engineers, conversation often turns to that one airline and how it is being destroyed.

We've all been reading the thread about Alan being unhappy and so many contributions regarding the direction the company is being taken. We can all see what is happening but there is a big question that remains unanswered. What can anyone do about it?

Although certainly not a total solution to our collective problems, there may be an avenue that we can pursue in the Federal Court under a clause contained in the LAME workplace determination. I will post the clause shortly but 11.3 of the WD says that Qantas shall 'seek to remain competitive". From what I have seen, Qantas are making decisions that seem to be against any common sense or purpose with regards to the airline itself. Essentially, they aren't remaining competitive by funding failing ventures and placing bills of other subsidiaries onto the mainline account.

I'd like you all to assist the ALAEA with this case. We've decided to do it in a very open way for a number of reasons. Firstly, it will give all the people who follow the thread an idea of what goes into the prep for such a case. Secondly, it will let Qantas know that we are discussing their little paper shuffling exercise and planning to move on them. I'm not concerned with them being pre warned, if we hit them with this case cold, they would have tried to hide evidence anyway. I suspect there is so much of it that they won't be able to cover their tracks.

I have our office chasing the original cost shift questions from two years ago that never got answered. The case should give us the ability to subpoena evidence and internal papers for use in the case. Just a note on that point. You cannot subpoena documents that you simply heard a rumour about as that would be deemed as a fishing exercise. You have to have some reasonable grounds to suspect something exists before you can gain access.

I think between us however, we can build enough of a case to run this one and prove that Qantas are making poor decisions and in doing so undermining the employment of LAMEs by destroying the same company the Pilots and others work for.

That will do for starters. Pls inbox me or post openly. The next few weeks will just be prep until we can review what we have in the office.

Steve P
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Old 2nd Jan 2014, 01:57
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11.1 The parties to this Workplace Determination recognise that the major factor influencing job security for Qantas employees are forces external to Qantas.

11.2 The parties therefore recognise that some factors which affect Qantas' business performance are beyond the control of Qantas or are factors over which Qantas has little control. Subject to these factors, Qantas commits to retain the existing engineering and maintenance functions of employees covered by this Workplace Determination.

11.3 For its part, Qantas shall seek to remain competitive and seek to ensure that job security for employees covered by this Workplace Determination shall be maintained for the duration of the Workplace Determination, and the employees and the ALAEAin turn commit to continue to cooperate on issues which improve Qantas' productivity, efficiency and overall profitability.
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Old 2nd Jan 2014, 03:04
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Just a few points on this case. We would have to prove that Qantas were not remaining competitive. The first thing we need to know is - what does "Qantas" mean? It is contained in the definitions of the Determination.

5.2 ―Qantas or the ―Company means Qantas Airways Limited.

I'm not sure what this means but a quick google search shows that QAN on the stock exchange stands for Qantas Airways LTD. Which appears to say that our contract is with the master company.

That being the case, it looks like we would be able through that definition to access documents from any part of the company including the subsidiaries that feed into it.

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Old 2nd Jan 2014, 03:28
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Next thing the ALAEA would have to establish is that Qantas were not remaining competitive. I have seen so many posts here about cost shifting and stupid decisions but we need a list of as many as possible. Be good if 20 issues were raised as part of a case. I will post them here as they develop but would start with the first one that really pi$$ed me off. The withdrawal from Frankfurt.

I know that loads were always good there. I suspect it was part of the deal to get EK to hold hands with their little friend. None the less, this appeared to be a service offered by Qantas that was making money.

The excuse that they used, and I am sure there are public statements to this effect, was that it was a loss making route. I've been looking at the loads around the time of the service withdrawal. I know loads aren't the absolute defining definition regarding profit but they are a very good insight.

I've taken the number from the BITRE website. I thought I would look at the 12 months before the withdrawal. The loads to Frankfurt compared to other Qantas International destinations. Of 15 International destinations, Frankfurt had the 3rd highest loads. Why would an airline carrying 85.9% loads withdraw that service and continue to fly to many places carrying 70's and even 50's load factor?

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Old 2nd Jan 2014, 03:39
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Mate you are on holidays...

Turn your computer off and relax. You will give yourself a heart attack!!!

This will all still be waiting for you when you get back.
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Old 2nd Jan 2014, 04:16
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QAL being uncompetitive in fact is not sufficient to prove a breach.

The obligation is “to seek” to remain competitive, not “to ensure” the Company remains competitive.

QAL can try hard but fail to remain competitive and still comply with its obligation. Technically, QAL would be in breach if it did nothing to try to remain competitive but ended up remaining competitive through blind luck. No damage to the ALEA though.

QAL would also be in breach if it deliberately sought to become uncompetitive. Good luck proving that! I imagine QAL would argue the ALEA breached its obligation under the same clause!
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Old 2nd Jan 2014, 04:22
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What I find amazing is the load factor for the UK. I'm not sure of the date they handed the Heathrow slots to BA but remember it was just prior to the Olympics - but 87.1? Equal best load factor? Crazy management!!
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Old 2nd Jan 2014, 05:39
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Yes Creampuff I agree that Qantas being uncompetitive is not the breach. It is whether they are seeking to remain competitive. Trying hard and failing is ok to. I suspect they are trying hard to fail. I think this is deliberate either by design or stupidity.

So the court would rightly concentrate on how the company sought to remain competitive. That would go to the decision making process of those people making the decisions and what evidence they had before them to make the decisions on.

Halving flts to London was a good example. Although it was in May 2012 when the flts were cut, the announcement was made in Aug 2011. The decision must have been made by then. Again a case of - why would you cut services? It would be rightly ok if you were struggling to get pax.

I've taken a snap shot of the 12 months of loads on the LHR services in those 12 months. They appear on the right column. These supposed (according to press release) services were losing money with an average load factor of 86.6%....

The corresponding previous 12 months, the loads are now down to 85.4%. These are extremely healthy load factors for any airline. The effect of this reduction of services was to make Qantas carry less pax for each piece of metal sent to London. Of course when the Board made this decision, they didn't know it would make them less profitable but they sure as hell knew they had been carrying 86.6% beforehand.

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Old 2nd Jan 2014, 06:02
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The transcripts of the Jetconnect case might be a good start. I believe it was recognised that there was some fairly dubious accounting procedures going on.

The problem is, the QF response would probably be for the QF group to remain competitive this arrangement was required to maintain a presence in NZ.
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Old 2nd Jan 2014, 06:11
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I can imagine this

"Qantas needs to close itself down systematically by divesting itself of itself so as to remain competitive"
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Old 2nd Jan 2014, 06:39
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Mstr Caution, I agree completely. I don't see how saving a couple of bucks on staff wages offsets the cost of maintaining a separate AOC and management team for jitconnict.
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Old 2nd Jan 2014, 06:41
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Qantas needs to close itself down systematically by divesting itself of itself so as to remain competitive.
Where have I heard that kind of reasoning before …. Hmmmm …. I know:
We had to destroy the village to save the village.
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Old 2nd Jan 2014, 06:44
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Hey mate. "shall" or "will".......the are very similar. Hard to think of a circumstance where the use of either within a sentence changes much. Important here though we look whether "will" changes the substance of the commitment given to us by Qantas.

Qantas shall seek to remain competitive


Qantas will seek to remain competitive

Na that won't harm us either way. They made a commitment. They are bound by law to honour it. In return we had to give them efficiency and that section of the job security clause was run extensively in the MOD case and we were ordered to give them that efficiency.

Just looking at some other flight data. Whilst Qantas were dropping services with loads of 85%+ they were moving metal to less popular routes. Singapore had services added when their original loads were only 78.6%. The corresponding months of now and the same months in the year before the change are shown. This is how you drive inefficiency into an airline business.

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Old 2nd Jan 2014, 07:09
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The board of this company is obliged to use their best endeavours to take the company in a direction which makes a profit for its shareholders.

The argument to say that they did not would have to be very strong indeed.

Cream Puff is right.
Proof of deliberate action by anyone on the board to prevent the company from operating to the benefit of the shareholders would be difficult to prove. However, a well structured case of past actions and outcomes might show interested parties the level of incompetence demonstrated by the board. Additionally, if deep detail is provided in each case, it might create such public interest, if provided to the media, that even the Government might get involved (albeit privately).

I wish you and all contributors to this action, the very best of luck.
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Old 2nd Jan 2014, 07:23
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Happy for the media to follow the thread as the case develops.

Out of curiosity there was one area where I suspect a decision was made that certainly on the surface appeared not to be cost effective. I don't know the detail and would like some help from out Pilot friends.

Wasn't there a time recently when Qantas Pilots were being paid but not working their full hours when contractors were brought in to fly? Think something to do with freighters. Anyone got any details?

Also from LAME readers. With Qantas cutting back numbers all around the country, I found it concerning recently when they decided to increase the number of managers in the same areas.

I take Mel for example. There was one Line manager and an Ops manager offsider. They are replacing the Ops manager position with 4 Ops managers (one per crew). What are they doing in other States?
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Old 2nd Jan 2014, 07:35
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Off topic but for the pedants, an interesting discourse on 'will' versus 'shall' can be found here:

What?s the difference between ?will? and ?shall?? | OxfordWords blog

To summaries, there's little difference!
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Old 2nd Jan 2014, 09:07
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Regarding "Ops Mgrs", I am reliably told from old mate up in Qld that same thing is happening up there. Save money?......Go figure
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Old 2nd Jan 2014, 12:25
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I don't know if this will help much Fed Sec, but if could be useful. I've been told that Air Vanuatu who used to have their 737 Maintenance done by Qantas in Brisbane has now been told this will no longer be available. Surely if the Engineers were getting all their work done for Qantas and this was being done as well then they are deliberately losing money that would have been given to them for this work for no particular reason?

There may be evidence of other such "Minor" work that brought in extra money being allowed to disappear to the deliberate detriment of the Qantas Group.
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Old 2nd Jan 2014, 20:31
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shutting the airline down because of pilots wearing red ties would surely fall into these clauses
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Old 2nd Jan 2014, 23:09
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The notion that self interested management are risking and losing the crown jewels can be understood by the public, the press should be able to get behind you.

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