Men Who Killed Qantas by Matthew Benns

Author:Matthew Benns
Language: eng
Format: mobi
Tags: History
ISBN: 9781742750378
Publisher: Random House Australia
Published: 2009-01-01T00:00:00+00:00

In the spring of 2007 the airline set up a subsidiary called Team Jetstar to recruit flight attendants on new, ‘flexible’ terms and conditions. A recent enterprise bargaining agreement meant that Team Jetstar staff would be paid a lower base wage but have incentive payments for working longer hours. The model was put in place to compete with the in-flight staff cost of new competitor Tiger Airways, which was backed by Singapore Airlines. ‘We have to be competitive against new entrants,’ said Joyce. ‘Tiger had Australian workplace agreements with terms and conditions that are more competitive than Jetstar. Team Jetstar matches those conditions. Through this we can create over 500 new jobs based in Australia.’32

But what the unions were worried about was these crews then being used on Qantas routes. A precedent had been set by the Qantas-owned Australian Airlines. Qantas had long ago spotted the advantage of having direct links to more international markets. It had joined with partner British Airways in launching the Oneworld alliance in 1995. American Airlines, Canadian Airlines, Cathay Pacific, Iberia and Finnair had all quickly joined later that year. The alliance gave passengers greater freedom to choose routes across the globe where Qantas did not traditionally fly, increasing the number of people who could use the airline on one straightforward ticket. Qantas had also seen another niche in the tourism market and in 2002 launched a Cairns-based international leisure brand called Australian Airlines. The carrier started flying at the end of 2002 with trips from Cairns to Japan, with Singapore, Thailand, Bali and Hong Kong quickly following.

However, the airline was not a success, despite paying its staff less than those employed by Qantas and having a cost base 20 to 30 per cent lower. By 2005–6 passenger numbers were dropping – down by 3.6 per cent in a year – and Australian Airlines had lost $11.6 million before interest and tax. It had to go. Qantas wanted to focus instead on launching Jetstar Asia. There was a small overlap, but the domestic Jetstar model had proved to be the example of how a cheap international alternative could work; Australian Airlines had not.

The five Australian Airlines Boeing 767s were repainted in Qantas colours and the 370 employees absorbed back into the airline under their existing workplace arrangements. And that’s what the unions did not like. Documents filed by the Australian and International Pilots’ Association in the Federal Court in February 2007 alleged that former long-haul Australian Airlines pilots were now flying Qantas jets on Cairns–Tokyo and Sydney–Manila routes. While a Qantas pilot would be paid up to $187 an hour for the job and a Qantas first officer $123 an hour, the Australian Airlines crews were doing it for 20 per cent less. There were 94 Australian Airlines pilots in Qantas uniforms working for less money, said the Association as it sought recompense under the Workplace Relations Act.

Australian Airlines’ problems had begun as early as its inaugural flight from Melbourne to Honolulu, when the aircraft was delayed after fuel loaded into the centre wing tank leaked onto the tarmac.

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