Scorched earth on the runway

The boss of Australia’s flag-carrier takes a big gamble

See article

Readers' comments



I strongly suspect this is the first chapter in the end of Qantas. Aussie Unions vs Cheap Foreigners is only a small part of it, really. Right now, Qantas is a relatively premium airline compared to the competition, but on the short flights like SYD - MEL there is little value add to getting a free muffin or cheese sandwich. The problem is here that those flights are pretty frequent for lots of people who just fly super budget. So obviously, this is where Q should be cutting prices and costs. But then, people start to view Q as no different from the other cattle carriers, and Q has less incentive to keep up the premium service. I don't feel that Joyce has the creativity necessary to figure out how to position Q as a premium airline that people really would want to pay extra for, and seems to be going for the "brutal cost cuts" solution like everybody else. I predict in 2~5 years there will be no point to booking Q over another airline, and not long after that there will be no Qantas at ll.


Any 'victory' Alan Joyce wins will be just a short term one. The damage done to staff/management relations, the tarnishing of an iconic Australian brand and the winds of global aviation will continue to whittle away at QANTAS"s market share.

Consensus and cooperation are the keys to future success/survival, not extreme measures where no one comes out ahead.


"... business-class travellers, who are especially profitable, were already said to have started switching as the Qantas disputes dragged on."

I would really hate it if this happened on a flight that I were booked on but still, suspending all flight operations looks to me like a courageous and valid decision. If it can't get any worse, one may as well turn to drastic measures.

Quantas is the safest airline in the world.
If the pilots and engineers were not focused on doing their job at the time, it is perhaps a good idea to stop all flights till they are again at 100 percent.
Many airlines place a higher priority on money, with fatal results.


It's hard to believe that a man would shut down his whole enterprise for a couple of hours just to get a point across...however, it happened. Joyce took a very controversial step when he chose to shut down the airport for a few hours because while he may have caused the strikes to be delayed for a while, he may have lost many customers and also revenue in the process of doing this. Somehow, I think there was a much better option for Joyce to pursue, but now only time will tell on how this decision will play out.

Dr Kick

QANTAS CEO's behaviour is just like those at the top of Wall Street: Kick the workers' butts. QANTAS' shareholders should demand his ouster.

Management choices all along the way have led to this situation. Arrogance and greed such as demonstrated by Wall Street underlie all of the reasons for management's actions--they chose this path long ago; workers have only recently woken up to the devil/deep blue sea choice that management has given them.

This is not fair dinkum by any stretch of the imagination.

Long Hauler

Joyce is the face of corporate greed, awarding himself a $2,000,000 bonus and then sticking the knife into all staff. He wants a NY salary while the staff should be on Thai ones he reckons. An economic vandal without any thought for the plight of his customers. I wonder what this idiot was thinking with the Melbourne Cup and CHOGM under way.
He despises unions but what are the Business Council of Australia, Australian Industry Group, the Australian Chamber of Commerce and Industry?


I decided to minimise Qantas travel - despite being Platinum level frequent flier - about 8 years ago. Reasons: declining aircraft standards (we would ride in some old British Air planes at times,declining punctuality, declining service and attitude by "behind the scenes" groundstaff, some militant unions making it difficult/impossible for management to make changes to meet competition, corporate culture influence from British Air.

Current underlying issues: increasing union militancy - not all the workforce, some have spoilt things for other excellent employees; unsustainable staff benefit liabilities; hangover from previous bad management performance; a declining esprit de corps.

Someone has to do something - before Qantas completes its slide into being another Alitalia.

E.T. Cartman

Why do Qantas think they will do any better with an Asian based airline? I fly Singapore to Australia every month and never even consider using Qantas - schedule, price, service and convenience just not competetive with other options.

The Qantas domestic cash cow will dry up soon too once regulators consider the traveling public and open domestic routes up to foreign competition.

Riley Calaby in reply to E.T. Cartman

Australia’s already exceptional in allowing 100% foreign owned Australian companies to operate domestic services. I don’t see what’ll spur the regulators to go further while other countries maintain even more protectionist policies.

I think the situation needs to be put into perspective.

The pilot's form of industrial action of wearing red ties and making 1 minute PA's stating their case was hardly a cry to ground the airline. Their demands? Stop the airline from contracting other airlines to fly in Qantas colours, uniforms and standards to Australian ports. The pilot's were willing to give 22% in efficiencies (re-scheduling, crewing requirements, etc...) in exchange for an employment clause and a 2.5% pay "increase" to offset inflation at 3.5%+ (in addition to their real wages dropping further while negotiations take place).

No, Mr Joyce's plan is more in line with Qantas Chairman Leigh Clifford (ex CEO of Rio Tinto) who views Unions as an annoyance rather than an employee voice to be worked with. He would rather see foreign workers come to Australia on a fly-in / fly-out contract at half the current wage of Australian workers. Imagine being able to employee an Indonesian truck driver on the Pilbara at $50,000 rather than $110,000 they are required to pay today! Using Qantas' industrial woes to force the Government into action is a stroke of genius (hence the overwhelming support of business leaders in Australia)

In addition, the holy grail for Qantas is the relaxation of foreign ownership laws that "constrain" Qantas competitively as claimed by an inexperienced airline board (less than a 4 year average in the airline industry). The current expansion plans of using Jetconnect and Jetstar to service routes allocated to Qantas while shrinking Qantas' main fleet in tandem is simply a tool to circumvent the Qantas Sales Act. Eventually the flag carrier of Australia will be represented by New Zealand, Singapore and China through Jetconnect, Jetstar and the recently announced RedQ airline servicing Asia as Qantas.

The employees of Qantas do not have a problem with Qantas buying other airlines and operating them to keep the Qantas Group profitable. They do get their feathers ruffled when these airlines use the Qantas brand to replace their jobs. When a passenger boards a Qantas plane they should get the standard of safety and experience in which they have paid. I feel as though I am already home when I get on a Qantas plane in New York and hear the Australian accent welcoming me aboard. From LA to Auckland and Brisbane, I like the Kiwi accent but I want what I paid for - 90 years experience!

So I guess the inconvenience of listening to a pilot's PA for a minute might have annoyed some passengers - but take a minute to understand the issues and their consequences. It is sad Mr. Clifford is using an Australian icon to have his last shot at Unions and the Labor government!


It is all a bit too complex for Joyce, his pay increase is one you give to the sacrifical lamb when you've already calculated the settlement and need to square it off in advance on a times earnings basis.

It was Chairman Clifford with the record of braking the unions on individual contracts in the mines, and the raft of m&a management consultants that they've brought in from the usual useful idiots that don't have a clue about operational airline strategy.

The thing that saved QANTAS however and made it a global outperformer in the past decade (and built the evident level of hubris among QANTAS management and the stupid funds management analysts that just bid up their share price as they played hardball) well versus the rest of the flayling airline industry world anyway ..... is that the AUD, being a commodity play, moves up with the USD fuel cost equalising or better the increased cost (psst .... making for market competitive fuel surcharge heaven that goes straight to the bottom line! Imagine how that sticks in the craw of those US State-Mercantilist Dept lawyers!).

The strategy of losing market share while making money plays for only so long. But if they make fifth freedom seeking foreign operating subsidiaries on USD balance sheets, they become just like all the other fuel price smashed mugs on the planet. Check the fuel cost versus labour cost paradygm and you'll see what I mean.

Clever is one thing that Clifford and the management consultants and all the Labor Party crony stooges that land in QANTAS board jobs are not. They think they need to get the job done before the B787 hub busting planes arrive and they run out of excuses to launch new subsidiaries in intermediate hubs that lose meaning as they are overflown on longhaul routes.

So they want USD balance sheet employees flying and maintaining AUD balance sheet planes.

The other plan of nationalising the old QANTAS international and dealing in global realpolitik makes more sense and is more the traditional Aussie corporatist smart alec play run out of Canberra. Don't underestimate them yet, they did the private equity raiders and ticket clipping Labor stooges Dixon and Eddington in.

Yes that's the same Labor Party above with luminaries like Shorten expressing their "solidarity" with the workers. On ticket clipping socialist cronyism, the Australian Labor Party taught Blair everything he ever knew. They are on their way to oblivion as a party in Australia. UK Labour will be the same after their next go-around after the Ed and David minstrel show.

ps: correct QANTAS spelling to be noted by The Economist's email subs


The funny thing (sic) about Qantas is that we are always hearing about the disadvantages of being an "end of the line carrier". But when I went to book a Sydney-Shanghai business return yesterday I was quoted $10,000. And it costs that or more to fly Sydney - LA. Up to $15,000 in fact. Sydney-London via Jo'burg was $17,000. The planes are always full. And, unless it's an A380, old and tired. On the NZ leg where there's a airline called Jet Connect pretending to be the flying roo, which makes Easy Jet look like luxury travel for half the price. Qantas behave like a bunch of extortionist thugs most of the time. Yes the unions are being unreasonable but it's pretty clear where Alan Joyce and co's motivations come from and it sure isn't about putting out a good product in an unprotected market. My newly minted Virgin platinum card (they brilliantly just did a status match with my Qantas one) is looking really rather good right now.


I'll still fly Qantas. Bugger the union. 1,000 jobs on the line you say? I wonder how many Aussie families hold Qantas shares directly or indirectly through their pension schemes. I'll wager that it's a heck of a lot more than 1,000....

uPelican in reply to Dwrig

Over 80% of QANTAS voting shares are owned on behalf of others by JP Morgan, Citicorp,HSBC and National Nominees. QANTAS is NOT an Australian national carrier. Its a private business. Owned by people who don't live in Australia and its Chairman is an advisor to KKR, the US private equity fund who has already had a bite at owning it. My tip is QANTAS as a business thinks it will make more mioney if it gets out of Australia and repositions itself - without the need for all those expensive Australian accents with their standard of living expectations.

perrissimo abbas

I was very p***ed off to hear the Captain of QF-26 on arrival at LAX from AKL on Monday October 24, 2011 use the aircraft's public announcement system to plug for support of Qantas pilots versus employing "foreign pilots" which latter phrase was not explained.

There is a time and place for everything.

That was not the time. And not the place.

Il Doge in reply to perrissimo abbas

Locked inside a pressurised metal cylinder, travelling at around 900km/hr at some 11,000m above the earth; I couldn't conceive of a better example of a captive audience. The comment doesn't directly relate to the article.

But, by way of an answer, "foreign pilots" is a reference to NZ pilots flying at lower wages in an (indistinguishable) Qantas subsidiary. Presumably, Messrs Joyce and Co are preparing the field for future "negotiations". And while we are diverging from the topic, I'm still perplexed at the timing (mid-dispute) of Mr Joyce's 71% pay rise to take his current package to some AUD5m.


Great to see a CEO from a Commonwealth country with "the cojones" to face down these spoiled children. What do they not understand about finances on a global stage.......Advance Australia Fair play for management and labor!



Products and events


Take our weekly news quiz to stay on top of the headlines

