Qantas risks travellers' wrath for result

ROELAND VAN DEN BERGH
Last updated 05:00 01/11/2011
SHOCK MOVE: Chief executive Alan Joyce stunned the aviation world on Saturday with his decision to indefinitely ground the main Qantas brand with immediate effect.
Reuters
SHOCK MOVE: Chief executive Alan Joyce stunned the aviation world on Saturday with his decision to indefinitely ground the main Qantas brand with immediate effect.

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OPINION: Qantas has played an unprecedented game of poker, betting the airline to stare down three of its key unions and forcing the Australian Government's hand to intervene.

But the Qantas grounding is unlikely to have a lasting effect on the carrier in New Zealand.

Chief executive Alan Joyce stunned the aviation world on Saturday with his decision to indefinitely ground the main Qantas brand with immediate effect.

Nearly 70,000 passengers were left stranded around the world as 108 planes sat on the tarmac cancelling 500 flights.

The decision did not affect budget offshoot Jetstar or New Zealand-based subsidiary JetConnect which flies in Qantas colours.

Angry and frustrated passengers stranded around the world, including New Zealand, have vowed never to fly Qantas again.

But history suggests that such resentment is typically shortlived and nearly all will return to the fold, drawn by the key decision factors of convenience and price, travel agents say.

House of Travel retail director Brent Thomas says Qantas will suffer a short-term hit to its trust among travellers.

Many of those booking flights over the next few weeks will consider alternative airlines, with the events of the weekend and the long-running industrial dispute fresh in mind.

Qantas and Jetstar were similarly heavily criticised for refusing to fly in presence of volcanic ash covering much of New Zealand and Australian air space earlier this year, while Air New Zealand flew on.

Then, too, affected passengers swore to never board another Qantas jet. Yet within eight weeks bookings were back to normal.

This time Qantas had little choice but to ground the airline which was bleeding A$15 million a week, as rolling industrial action led to frequent flyers deserting en masse, grounded unserviced planes and mounting damage to its brand.

The unions representing its international pilots, engineers and ground crew are waging a bitter campaign over pay, work conditions and against Qantas' plans to set up a new full service Asian carrier which will pay its staff less.

Joyce claimed one of the unions had warned they would "bake Qantas slowly" into submission and were considering escalating their industrial campaign.

Faced with an inevitable progressive shutdown of the airline, Joyce took the bull by the horns and brought the issue to a head.

He correctly calculated that the government would immediately intervene by applying to the Fair Work Australia employment tribunal for an urgent ruling, delivered in the early hours of Monday, to terminate all industrial action.

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The action was all the bolder for coming ahead of today's Melbourne Cup and while Commonwealth leaders gathered in Perth, many relying on Qantas for a lift home.

Australian Prime Minister Julia Gillard was left fuming at the airline's "extreme approach" with little notice to the government or passengers when it had other options available.

But for Qantas the decision has met its objective of putting the dispute that was showing no signs of resolution, in the hands of an independent arbitrator.

The unions are barred from taking any further industrial action and the tribunal has given the parties three weeks to settle or face a binding arbitration decision.

The unions have labelled Joyce a reckless manager, but calls for the board to sack their "out-of-control CEO" are likely to fall on deaf ears.

Qantas' main shareholders have rallied behind Joyce, who was also awarded a 70 per cent pay increase on Friday while at the same time calling for the axing of 1000 jobs.

Air New Zealand is not rubbing its hands at the prospect of a windfall of disaffected Qantas passengers switching camps.

The national carrier's head of Australasia, Bruce Parton, said yesterday the instant grounding would put some tourists off travelling to the region.

- BusinessDay.co.nz

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