Sunday, 30 October 2011

Deja Vu


So the Leprechaun’s spat the dummy and grounded Qantas.

This reminds me of the Australian pilot’s strike which began in August 1989.

This earlier dispute was about the Pilots and their wages. AFAP pilots decided to fly only between 9am and 5pm which effectively grounded the fleets of the airlines involved. Those affected were Ansett Australia East-West Airlines, Ipec and Australian Airlines.

Bob Hawke (PM at the time) brought in the RAAF, and they flew some routes to keep the traffic flowing. At the time, I was principal of a special school in Townsville, and was booked to fly to Brisbane for a conference.

On the day of the flight, I arrived at the airport with half a dozen other Townsville principals, after we were told the RAAF was doing the honours. Sitting on the tarmac like a beached whale was a RAAF C-130E.

It occurred to me at the time that I may have flown on this aircraft before, during training on the way to Shoalwater Bay and back, but then I remembered that in 1969, the aircraft were C-130As.

Nevertheless, I remembered enough about travelling on a Herc to prepare myself for a noisy and uncomfortable trip. I also remembered that it was not a good idea to choose a seat above the empennage for the undercarriage, as things got a bit cosy in that part of the fuselage where it narrowed to make space for the wheels. In this area it was necessary to interlock your knees with the person opposite because of the limited space.

I therefore gave up my place in the queue to move back just far enough to avoid this positioning, thoroughly confusing my colleagues, some of whom did likewise, and some who did not.

When we got to Brisbane members of the second group gave me an ear bashing because I didn’t warn them about the peculiarities of the C-130.

As to the current histrionics, the best understanding of what is really going on comes from Senator Nick Xenophon’s speech to the senate (under parliamentary privilege) on 23rd August 2011.

Some extracts –

Qantas has systematically built up the low-cost carrier at the expense of the parent company. I have been provided with a significant number of examples where costs which should have been billed back to Jetstar have in fact been paid for by Qantas. These are practices that I believe Qantas and Jetstar management need to explain. For example, when Jetstar took over the Cairns-Darwin-Singapore route, replacing Qantas flights, a deal was struck that required Qantas to provide Jetstar with $6 million a year in revenue. Why? Why would one part of the business give up a profitable route like that and then be asked to pay for the privilege? Then there are other subsidies when it comes to freight. On every sector Jetstar operates an A330, Qantas pays $6,200 to $6,400 for freight space regardless of actual uplift. When you do the calculations, this turns out to be a small fortune. Based on 82 departures a week, that is nearly half-a-million dollars a week or $25½ million a year.

And -
My question for Qantas management is simple: are these arrangements replicated right around Australia and why is Qantas paying Jetstar's bills? Why does Qantas lease five check-in counters at Sydney Terminal 2, only to let Jetstar use one for free? It has been reported to me that there are other areas where Jetstar's costs magically become Qantas's costs. For example, Jetstar does not have a treasury department and has only one person in government affairs. I am told Qantas's legal department also does free work for Jetstar.

(Hansard 23rd August 5259 19.37)

Given what Xenophon has revealed, there should be a judicial enquiry into the actions of Qantas management in flensing Qantas to stabilise Jetstar.


cav said...

I'd say it was a big call 1735099. Joyce has balls.
I flew to Melbourne from Sydney for $50 last week and for $93 the return trip.
For Qantas to compete they must reduce costs or go the same way as Ansett.

1735099 said...

Funny thing is their profit went from $112m in f/y 09/10 to $250m in f/y 10/11.
Unless my maths has gone to God, that's actually an upward trend.....

A Pinch of Common Sense

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