Men Who Killed Qantas - Matthew Benns [62]
At the heart of many of these publicly raised issues was the anger of Qantas staff that Jetstar was eroding standards of pay and conditions that had taken years for Qantas staff to build up. One Qantas flight crew member recalled: ‘When Jetstar started up there were some very ugly scenes in hotels when Qantas and Jetstar crews stopping over would meet at the check-out. The Jetstar crews were working for a lot less money so resented us Qantas high-flyers and we resented them for taking jobs on the cheap.’28 Jetstar pilots were usually not members of the union and were earning around 40 per cent less for flying the same routes as their Qantas colleagues.
But those pesky unions and all their high-minded ideas of fairness and equality were not going to be the problem to Jetstar that they were to Qantas. By 2007 Jetstar was looking to get as many staff as possible out of the union and on individual contracts. ‘Jetstar as an organisation needs the flexibility to grow and we believe that a flexible workplace agreement allows us to do that,’ said the indefatigable Jetstar spokesman Simon Westaway.29 The plan to get as many pilots and engineers as possible on individual workplace agreements was described by the Australian International Pilots’ Association as ‘a union-busting activity’.30 Association General Manager Peter Somerville said: ‘It has nothing to do with flexibility, it’s about peeling employees from their collective representatives.’31
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