Men Who Killed Qantas - Matthew Benns [106]
Then the bosses kicked the workers. Baggage handlers complained they were being forced out by cheap labour. ‘What these guys coming in don’t realise is that when they hurt their backs they will be on the scrap heap with no compensation whatsoever,’ said one long-term employee.19 And long-haul pilots were forced into a corner over new enterprise agreements. Australian and International Pilots Association president Barry Jackson said he feared for Australian pilots’ job security as Qantas followed its Jetstar model and sent jobs offshore to countries with cheaper labour, including Singapore, Vietnam and New Zealand. It was a good time for the association to remind people that the skill of the pilots had pulled Qantas out of the mire when the A380 got into trouble over Batam.
Alan Joyce followed up all this with uncharacteristically gloomy prophecies for the future. Pundits snickered that he had finally found predecessor Geoff Dixon’s doomsday guide for predicting the future of the airline industry. They suggested he may have been talking things down to scare the heavily unionised workforce into easing off its pay claims. Joyce pointed the finger at the foreign airlines, which were flooding the market with extra capacity. He said there had been a 39 per cent increase in flight capacity into Australia from 2003 to 2009, while inbound demand had only risen by 10 per cent. ‘In a financial sense, we are falling significantly short of where we should be. If we continue on our current path, there will be a real question mark over the viability of Qantas international,’ he said.20 Etihad’s chief executive, James Hogan, came out swinging and told him to harden up. ‘I have been hearing this for a long time from my mates in Australia. We have opened up the market. They should get back and fight and let the customer decide who wins. I can’t sit here and complain about capacity and people moving into my market,’ he said.21
But Joyce had a point. In 2003 Qantas held 35 per cent of the international passenger market. The problems with the A380 helped to drive that down to a record low of just 18.7 per cent in November 2011. Even with the Jetstar and Jetstar Asia share of the international market added in, the group still only held 26.8 per cent. The airline’s perennial challenge – Australia is a long way from anywhere – means it cannot offer a hub in the way its rivals can. The Qantas international division was becoming a thorn in Joyce’s side. There were rumours that parts of the management team would even like to sell off the international arm – if they could find anyone to buy it. Managers, many of whom had steered international operations for decades, were leaving in droves. Among those were airport operations expert Roger Lindeman, who defected to rival Virgin Blue after 42 years in senior roles at Qantas, and Hope Antzoulastos, who had spent 23 years at Qantas, working her way up to become network head for domestic and international operations. She quit after being moved to a project role, in keeping with Joyce’s policy of rotating people through all aspects of the business.
On top of all that, the Royal Bank of Scotland predicted the A380 crisis would cost the airline $80 million – excluding the estimated $70 million needed to fix the plane, which would probably come from insurers – and downgraded the airline’s pre-tax profit prediction by almost 10 per cent. Shares in Qantas were trading at $2.52 – around 40 cents cheaper than they were when the A380 hit trouble in November.
And money was not the only thing in freefall. In January a Qantas Boeing 737-400 with 99 passengers on board dramatically lost cabin pressure on a flight from Adelaide to Melbourne. The captain told passengers,