Qantas Says Labour Woes Cost US$16 Million a Week, Bookings Dive
By Amy Pyett, Victoria Thieberger, Reuters | Oct. 27, 2011
Australia's Qantas Airways said protracted labour unrest was costing it about AU$15 million (US$16 million) a week in lost revenue and has caused a dive in forward bookings ahead of the Christmas holiday season, making it unable to give a profit outlook.
Qantas also predicted a volatile remainder of the first half of fiscal 2012 as it also faces higher fuel prices and heavy losses at its international operations.
The airline is under growing pressure from staff who have taken strike action since September over pay disputes and its other efforts to cut soaring costs.
Qantas Chief Executive Alan Joyce said on Friday the industrial unrest had cost the carrier AU$68 million to date, more than the AU$49 million cost of the volcanic ash cloud from Chile which disrupted flights for weeks earlier this year.
He said three unions, covering aircraft engineers, pilots, and baggage handlers, wanted to retain "outdated work practices."
"They have created such uncertainty for our customers that we have seen a dive in forward bookings," Joyce told the annual shareholders meeting.
A noisy meeting was underway and hostile questions from shareholders about the company's outsourcing plans and its failure to settle with unions were met with applause, whistles and cheers.
A group of 20 to 30 protesters were outside the meeting site holding placards saying "No job cuts at Qantas" and chanting "Alan Joyce CEO, Workers rights must not go."
The airline has been forced to ground planes and cancel flights as disputes with baggage handlers, ground staff, pilots and engineers look set to drag on until at least Christmas.
Joyce said it would cost the airline more to give into union demands.
"Agreeing to the union's unreasonable demands would have a far greater cost on the company including risking the future of Qantas," Joyce said.
He said more than 600 flights had been cancelled so far, and 70,000 passengers had been affected.
Australian Associated Press reported an additional 10,000 passengers were delayed on Friday as workers went on strike during the Qantas shareholders' meeting.
Government Intervention
Joyce said earlier the carrier had not asked Australia's government or Prime Minister Julia Gillard to intervene in the disputes. The government can use powers under the Fair Work Act labour laws to force an end to disputes.
"We haven't, (but) the act is very clear. The prime minister and the government have the ability to intervene, if they so wish, in national interest terms," he told Australian radio.
Gillard has urged both Qantas and the unions to enter more intensive negotiations to end the dispute.
Qantas is looking at setting up two new airlines in Asia. It plans to cut 1,000 jobs and order US$9 billion of new Airbus aircraft as part of a makeover to salvage its loss-making international business.
Shares in Qantas were trading up around 1.2 percent, slightly ahead of the 1.1 percent rise in the broader market.