October 31, 2011
FOR well-known reasons, the timing of Qantas's bold - or perhaps impetuous - move on Saturday was dreadful. The airline's surprise attack on its employees came one day after its chief executive, Alan Joyce, was voted a 71 per cent increase in his salary package; one day before the airline was due to fly 17 heads of government home from the Commonwealth summit in Perth; on the weekend of the Victorian spring racing carnival - one of the highlights of the social calendar leading to the race that stops a nation; and on the day that more than 13,000 passengers around the world were expecting to take to the skies with the Flying Kangaroo.
No wonder the Transport Minister, Anthony Albanese, and even the Prime Minister, Julia Gillard, have been sounding less than impressed with Australia's own airline, or that management - and Joyce - are coming in for savage criticism from passengers. Qantas's reputation is under threat of lasting damage. Its competitors can barely contain their glee.
But - timing aside - the airline had no choice. As Joyce has explained, the union campaign against his long-term plans to lower the company's costs and secure a future for its troubled international operations has been slowly, deliberately choking it. To give in would buy only time, not solve problems.
The dispute is a case study in Australia's ability to cope with globalisation. That international air travel is one of the symbols of globalisation, and a major artery that nourishes it, only underlines its importance. Australia's open skies policy means Qantas, national flag carrier and all, must compete or die. With its existing cost structure, it cannot compete against international competitors able to pay lower wages. Something has to give.
The test will be for the Fair Work Australia apparatus, of which the Prime Minister is the proud author. The criterion is not whether Fair Work Australia can end this dispute. In the short term, that is virtually beyond doubt. The dispute will end - somehow. The real test is whether a necessary long-term process of organisational restructuring can be carried out through Fair Work Australia's processes, and whether the management of a company pitilessly exposed to the transnational forces that are reshaping the world economy can make the decisions it needs to survive.
That, almost certainly, is why Qantas has done what it has. Its action challenges the government to become involved and ensure national institutions allow companies to adjust to the forces of a globalised world. As the Prime Minister might say, game on.
