Americans have long experience of companies cutting benefits, cutting wages, and trying to prevent workers from joining unions. Few workers in America have been hit harder than aviation workers. US airlines have long used hardball tactics including bankruptcy courts, anti-union consultants, and offshore maintenance centers to undermine US aviation unions.
When they haven’t been able to break the unions, they’ve simply outsourced out all their flights to subcontractors. The strategy, in a nutshell, is to turn unionized Airline X into a shell company that subcontracts all its flights to a company with a name like “Airline X Express” that doesn’t have unions. This destroys the livelihood of airline workers. Many people believe it also compromises safety.
[pullquote]Qantas has grounded all its flights, everywhere, in an attempt to break its unions.[/pullquote]
Now these American aviation industry practices are being copied in the rest of the world. Australia’s main airline, Qantas, just announced a complete lock-out of all its employees. Qantas has grounded all its flights, everywhere, in an attempt to break its unions. The airline has estimated it will lose $20 million a day, but it considers the price worthwhile if in the end it can emerge union-free.
Qantas has already copied US tactics by founding separate, non-union subsidiaries and transferring flights to these. It wants to go further by copying US companies in sending its airplanes offshore for maintenance in low-wage countries. Many critics have argued that these offshore maintenance centers in Central America and Southeast Asia do much lower quality work than airline-owned maintenance centers in developed countries.
Many of us fly Qantas because of its high-quality staff and extraordinary safety record. Qantas hasn’t experienced a fatal accident since 1951. This record isn’t due to strong financial management by the Qantas board of directors. This record is due to the high-quality work of Qantas employees on the ground and in the air.
The Qantas management argues that the airline can be more profitable if it can break its unions and impose management-dictated employment contracts. It’s probably right. But is that the most important thing an airline should be doing? Most people would probably rank the most important priorities for an airline as: (1) safety, (2) service, (3) profitability. Unions guarantee (1) and (2). It would be a shame to see them sacrificed for (3).
[pullquote]The Qantas management has effectively declared war on its current passengers in order to boost future profits for its investors.[/pullquote]
It’s not easy to ground an airline. An airline is an incredibly complex operation. The management at Qantas must have secretly planned this lockout weeks or months in advance. The Qantas management has effectively declared war on its current passengers in order to boost future profits for its investors.
That’s a dangerous strategy. The Qantas management may find that its current passengers don’t want to be future passengers. It’s hard to make a profit for your investors without passengers. Today’s lockout may be the beginning of the end for Qantas.