Alan Joyce shuts down QANTAS.

[weemadando]

OK, so due to ongoing industrial disputes between multiple unions and QANTAS over agreement renegotiations, Alan Joyce (the same CEO who just voted himself through a 5m per annum payrise) has shut down the airline, and locked out all staff who are covered by the disputed agreements.

They're refunding tickets apparently, but this is a prime example of why the Occupy movement is a thing. CEO pays himself massive payrise and then declares that everyone else has to take a real paycut (below CPI pay increases) etc.

And now he's gone with a raw power move that can only end poorly for everyone involved.

Not to mention everyone who might have wanted to catch a QANTAS plane anywhere in the world.

[GuppyShark]

http://www.abc.net.au/news/2011-10-28/q ... se/3607160
Qantas defends Joyce pay rise
In a vote that seemingly defied a fiery mood, 97 per cent of shareholders voted in favour of the increase at the airline's AGM in Sydney on Friday.

The text of the article talks about how the board were "booed, hissed and mocked" but still a 97% favorable vote?

[thejester]

Just shows that smalltime shareholders have a tiny % of the vote. Most AGMs are something like that - it only takes a dozen people for the room to become 'fiery'.

TBH I have no idea as to which sides claim has more merit. This is a huge step by Joyce though and has the potential to be a PR disaster - while CEO the share price has gone down significantly, the safety record has coped a battering and jobs have moved offshore. The unions might have caused rancor in the general public by causing hour delays, but no flights at all, effective immediately? That's a quick way to piss a lot of people off...and I'm one of them, cause I'm supposed to be flying back to Canberra on Wednesday.

[weemadando]

Total cost of union demands 165m over 3 years.

Immediate cost of this shutdown 20m PER DAY. That's just on operation costs. Which the fuck knows how much this will cost in flow on effects and lost customers.

*edit* Apparently the industrial action as it was, ran them to 15m a week.

No matter what way you look at it, it's pretty clear that on every level Joyce and the board are playing hardball because they can. The fact that they couldn't even come close to an agreement for the better part of a year is telling. Doesn't seem like they went into it with a modicum of good faith.

[Alkaloid]

That's a quick way to piss a lot of people off...and I'm one of them, cause I'm supposed to be flying back to Canberra on Wednesday.

You still fly QANTAS domestic? Why? It's just a more expensive Jetstar now.
Joyce is a godawful businessman, as far as I can tell. All he seems to be able to do is shout 'cut costs, cut costs' and hope he can keep ahead of the competition, tarnishing his own brand name doing it. It's absurd.

[weemadando]

Isn't Jester similarly ensnared in government travel bookings? Which are almost uniformly controlled by QANTAS business travel.

[thejester]

That's a quick way to piss a lot of people off...and I'm one of them, cause I'm supposed to be flying back to Canberra on Wednesday.

You still fly QANTAS domestic? Why? It's just a more expensive Jetstar now.
Joyce is a godawful businessman, as far as I can tell. All he seems to be able to do is shout 'cut costs, cut costs' and hope he can keep ahead of the competition, tarnishing his own brand name doing it. It's absurd.

Jetstar don't fly to Canberra. Why would they? There's no tourism market and a huge percentage of the air travel is corporate/government and thus is prepared to pay ridiculously inflated air fares. Tiger only flew to Canberra once a day for similar reasons.

[Alkaloid]

Ah, right, that makes sense. I forget how tiny and out of the way Canberra is sometimes.

Also, love the quote from the Australian and International Pilots Association. "No-one predicted this, because no one thought Alan Joyce was completely mad."

[bobalot]

Just shows that smalltime shareholders have a tiny % of the vote. Most AGMs are something like that - it only takes a dozen people for the room to become 'fiery'.

TBH I have no idea as to which sides claim has more merit. This is a huge step by Joyce though and has the potential to be a PR disaster - while CEO the share price has gone down significantly, the safety record has coped a battering and jobs have moved offshore. The unions might have caused rancor in the general public by causing hour delays, but no flights at all, effective immediately? That's a quick way to piss a lot of people off...and I'm one of them, cause I'm supposed to be flying back to Canberra on Wednesday.

To put this into perspective. In the last 7 months, industrial action by the unions has amounted to 6 hours. Alan Joyce, a day after giving himself a 71% pay rise, has locked out his staff without pay and stranded tens of thousands of people. He's even grounded domestic flights even though domestic pilots were not involved in the industrial dispute.

I'm not sure about his plan of stranding tens of thousands of passengers all over the world (and Australia) and then blaming the unions is going will be bought by the public. It's obvious that Qantas management timed this action for the Commonwealth Heads of Government Meeting (CHOGM) meeting for maximum effect.

[Dendrobius]

Yeah, he may be completely mad, but there seems to be a method to the madness. Now that he's invoked the government, if Fair Work forces the unions back to work...isn't that pretty much a "flawless victory" to Joyce? He can then continue to drag the negotiations out whilst gearing up all the offshoring, etc...and do exactly what he wanted to?

It's obvious that he's got zero intentions to keep Qantas the way it is now. He just needs time, and this will probably give him that time he needs to get things over the line?

[Gandalf]

Yeah, he may be completely mad, but there seems to be a method to the madness. Now that he's invoked the government, if Fair Work forces the unions back to work...isn't that pretty much a "flawless victory" to Joyce? He can then continue to drag the negotiations out whilst gearing up all the offshoring, etc...and do exactly what he wanted to?

It's obvious that he's got zero intentions to keep Qantas the way it is now. He just needs time, and this will probably give him that time he needs to get things over the line?

Wouldn't doing something like that affect the brand negatively, hurting stock prices?

I remain ignorant of how economics works.

[Fingolfin_Noldor]

That's a quick way to piss a lot of people off...and I'm one of them, cause I'm supposed to be flying back to Canberra on Wednesday.

You still fly QANTAS domestic? Why? It's just a more expensive Jetstar now.
Joyce is a godawful businessman, as far as I can tell. All he seems to be able to do is shout 'cut costs, cut costs' and hope he can keep ahead of the competition, tarnishing his own brand name doing it. It's absurd.

Actually, he is making a move to reshape Qantas by relying less on the Australian market, and relocate significant operations out of the country.

That is his plan, and that is what the unions are revolting against. The trouble is geographic; Australia and New Zealand has and always been at the end of the world in terms of air travel routes and such. Shifting to Asia is an attempt to correct that. Simply put: the Australian market isn't as important as it was before for Qantas. The Asian market however is far more important.

[Archaic`]

To put this into perspective. In the last 7 months, industrial action by the unions has amounted to 6 hours.

Just watching the news for the last week, you should realise 6 hours sounds strangely low. The union rep who made the 6 hour statement was talking about only his own union, the pilots union. It's the strikes by other groups, particularly the engineers and baggage handlers, which have impacted on the firm most, and they've been substantially above "6 hours".

He's even grounded domestic flights even though domestic pilots were not involved in the industrial dispute.

Which is a great emotive talking point (also used by the same union rep who said the 6 hour thing), but which is totally irrelevant when you consider that plenty of domestic staff have been involved in the industrial dispute. Pilots are important, but they're not the only people essential to the running of the airline.

Yeah, he may be completely mad, but there seems to be a method to the madness. Now that he's invoked the government, if Fair Work forces the unions back to work...isn't that pretty much a "flawless victory" to Joyce? He can then continue to drag the negotiations out whilst gearing up all the offshoring, etc...and do exactly what he wanted to?

It's obvious that he's got zero intentions to keep Qantas the way it is now. He just needs time, and this will probably give him that time he needs to get things over the line?

Wouldn't doing something like that affect the brand negatively, hurting stock prices?

I remain ignorant of how economics works.

Honestly, if anything, the share prices may very well go up, not down. The impact on the brand may be significant in the Australian domestic market, but that's really not the biggest earner for Qantas. They, and their shareholders, are going to be more concerned about Qantas's international markets, particularly Asia. If you can, see if you can catch a repeat on ABC News 24 of the interview they did with Dick Smith over the situation. His position was essentially that this was a long time in coming, given the wages paid by Qantas's global competition to their own employees.

[bobalot]

To put this into perspective. In the last 7 months, industrial action by the unions has amounted to 6 hours.

Just watching the news for the last week, you should realise 6 hours sounds strangely low. The union rep who made the 6 hour statement was talking about only his own union, the pilots union. It's the strikes by other groups, particularly the engineers and baggage handlers, which have impacted on the firm most, and they've been substantially above "6 hours".

No, that would be the TWU (baggage handlers, etc) who have made that claim. All industrial action has been protected industrial action. This is a verifiable claim whereas yours is not.

The APIA (the pilots union) have limited their action to "limited to making brief, positive in-flight announcements and wearing red ties".

He's even grounded domestic flights even though domestic pilots were not involved in the industrial dispute.

Which is a great emotive talking point (also used by the same union rep who said the 6 hour thing), but which is totally irrelevant when you consider that plenty of domestic staff have been involved in the industrial dispute. Pilots are important, but they're not the only people essential to the running of the airline.

See above.

Yeah, he may be completely mad, but there seems to be a method to the madness. Now that he's invoked the government, if Fair Work forces the unions back to work...isn't that pretty much a "flawless victory" to Joyce? He can then continue to drag the negotiations out whilst gearing up all the offshoring, etc...and do exactly what he wanted to?

It's obvious that he's got zero intentions to keep Qantas the way it is now. He just needs time, and this will probably give him that time he needs to get things over the line?

Wouldn't doing something like that affect the brand negatively, hurting stock prices?

I remain ignorant of how economics works.

Honestly, if anything, the share prices may very well go up, not down. The impact on the brand may be significant in the Australian domestic market, but that's really not the biggest earner for Qantas. They, and their shareholders, are going to be more concerned about Qantas's international markets, particularly Asia. If you can, see if you can catch a repeat on ABC News 24 of the interview they did with Dick Smith over the situation. His position was essentially that this was a long time in coming, given the wages paid by Qantas's global competition to their own employees.

Are you for real? There are reports that 80,000 passengers have been stranded and this is costing Qantas 20 million dollars a day, how exactly is this going to drive their share price up in the short or medium term or even leave a viable company?

[Stark]

Because it means the uncompetitive structure of Qantas can be changed. Qantas sucking and being less profitable isn't new, and captain give me more money than my employees will ever see per year knows that if he can fuck employees he can 'turn around' the company by cutting costs.

The sad part is that this industrial action wasn't even particularly egregious; they just played into a rich fuckwits hands and are now probably totally screwed. Molokai on the bright side - even if successful I doubt Qantas will have a bright future anyway. Sooner it fails the better.

And man the AGM would totally have been 'hey guys I have this plan to reduce staff costs' 'fuck that's amazing have an absurd amount of money to buy more sex slaves and low-cost housing to gouge the poor'.

[tim31]

Alan Joyce: a face you'd just like to punch

Dad was stuck in Adelaide and was lucky to get a Virgin flight home

And I'm really looking forward to seeing how this has affected things at work tomorrow

[thejester]

Because it means the uncompetitive structure of Qantas can be changed. Qantas sucking and being less profitable isn't new, and captain give me more money than my employees will ever see per year knows that if he can fuck employees he can 'turn around' the company by cutting costs.

The sad part is that this industrial action wasn't even particularly egregious; they just played into a rich fuckwits hands and are now probably totally screwed. Molokai on the bright side - even if successful I doubt Qantas will have a bright future anyway. Sooner it fails the better.

And man the AGM would totally have been 'hey guys I have this plan to reduce staff costs' 'fuck that's amazing have an absurd amount of money to buy more sex slaves and low-cost housing to gouge the poor'.

Is 'uncompetitive structure' code for 'tied to expensive Australian labor' or is it more complicated than that?

[The Big I]

I think that its more that they want to send everything overseas into Asia. Case in point QANTAS says they pay their baggage handlers 15% more than Virgin baggage handlers, but as the TWU points out QANTAS uses 3 baggage handlers per aircraft while Virgin uses 6 handlers per plane. Oh well Mr Joyce is 2 from 2 he helped fix Ansett as well.

[bobalot]

Because it means the uncompetitive structure of Qantas can be changed. Qantas sucking and being less profitable isn't new, and captain give me more money than my employees will ever see per year knows that if he can fuck employees he can 'turn around' the company by cutting costs.

The sad part is that this industrial action wasn't even particularly egregious; they just played into a rich fuckwits hands and are now probably totally screwed. Molokai on the bright side - even if successful I doubt Qantas will have a bright future anyway. Sooner it fails the better.

And man the AGM would totally have been 'hey guys I have this plan to reduce staff costs' 'fuck that's amazing have an absurd amount of money to buy more sex slaves and low-cost housing to gouge the poor'.

Is 'uncompetitive structure' code for 'tied to expensive Australian labor' or is it more complicated than that?

There are other things. I recommend you read Ben Sandilands who has reporting on the airlines since 1960. His articles are up at http://www.crikey.com (most of my points below are from there).

1) The price of aviation fuel has soared in the last decade and remains high and is biting into the profits of many air carriers.
2) Australia it is not a international hub like Singapore or Hong Kong is and therefore Qantas doesn't get a big slice of the international air travellers market.
3) Qantas's decision to give away half its capacity to London Heathrow (one of its most valuable routes) so they retire 4 old aircraft is particularly silly decision. Management had known for years that the aircraft needed replacing but didn't plan their replacements to arrive in a timely manner, so the London market was half conceded to their alliance partner British Airways, whose reputation (at the moment) is not as good as Qantas, so travellers will be more likely to go to their alliance competitors.
4) Qantas failed to expand into the important air routes (with the exception of London). An excerpt from the article where this analysis came from, below:

It is important not to allow history to be rewritten by Qantas in relation to the rise of its foreign competitors. They didn’t force Qantas off routes to what have now become enormously important ‘secondary’ cities in Europe, or the more recently emerging routes to central Asia, northern Africa or ex Soviet era eastern Europe.

Qantas failed serve those routes, except via London, and its competitors filled the gap. If Emirates and Thai International and Singapore Airlines in particular had not demonstrated business acumen in flying one-stop to those destinations from Australia, the really valuable contribution Germany and the continent in general makes to Australian tourism would not have occurred as quickly or efficiently.

So yes, there are other issues. The Qantas board, after the collapse of Ansett, have not performed all that well (Anybody remember the high leveraged buyout of Qantas they were spruiking just before the GFC?).

[Stark]

Qantas has a lot of problem both in its market and in the way it operates, and complaining about expensive Australian labour when you're an Australian company is a lol. Its moot anyway, becuase Joyce is playing the public like a fiddle. Who needed workers rights anyway? Should give him MORE lifetimes of his employees' wages.

The laugh of them maybe bringing in Chinese pilots is so amazing given the public narrative on it that I hope to look back on this in my old age and laugh.

[bobalot]

When it comes down it, the excuse of "We had to do this overnight grounding or the unions would kill us slowly!" is bullshit.

If this was the course that Qantas management was going to take to break the unions, why didn't they give the 80,000 members of the travelling public advanced notice of their plan? They could have taken this action without stranding tens of thousands of people all over the world and in Australia.

[Stark]

Because it needs to generate shock to work.

Crte anger or annoyance, the steer it onto your enemies. That's what Joyce has been doing with the media (who laps it all up), so when people think 'wow that was annoying' they won't blame him or any of his inflated housing prices. They'll blame the workers.

It's textbook stuff.

[Alkaloid]

Um, this might just be the papers I read, but I haven't noticed a whole lot of people blaming the unions for this, mostly they seem mad a QANTAS and Joyce in particular. That was clearly the plan, but is it actually working?

Also, just looked at the papers, apparentley the Civil Aviation Authority is 'interested in the dispute re safety.' God knows what that means, but it could be seriously bad news for either side.

[weemadando]

The Hun, unsurprisingly ran a big 2 page spread puffing up the brave, courageous leadership of Alan Joyce. Murdoch being vehemently anti-unionist? Say it ain't so.

[Stark]

The best so far is Abbott saying the government should have intervened to protect the 'essential service' of a commercial airline. I mean, what a fuckwit.