Qantas: Joyce lockout one year on

The ramifications of Alan Joyce’s unprecedented decision to lock out his workers and ground the entire Qantas fleet are still being felt 12 months later.

By almost any measure, the outcome has been negative.

The lockout and grounding alone cost the airline $194 million, contributing to a half a billion dollar turnaround on its bottom line, falling from a $250 million profit the previous year to a $245 million loss in 2011-12.

Shareholders have also felt the pain. Qantas’ share price has lost a fifth of its value, falling from $1.54 on 28 October last year to $1.29 on Friday after dipping as low as 97 cents. That represents the loss of $585 million of shareholders’ money in just 12 months. To add insult to injury, dividends remain suspended.

The Flying Kangaroo has cut 2800 Australian jobs and closed some operations here, including heavy maintenance, and orders of new planes have been cancelled.

The damage to Qantas’ reputation both internationally and at home has been immeasurable. But there is no doubt Qantas’ domestic market share is under attack from Virgin, particularly in the business travel sector, as a result of the grounding.

But most damaging of all has been the lasting mistrust by Qantas’ workforce of its senior managers and board.

“The lockout gutted the company,” says Tony Sheldon, National Secretary of the Transport Workers’ Union.

“It cost $194 million and for the first time in 17 years Qantas has failed to return a profit.

“Staff opinion of management is at an all-time low. The damage to the Qantas brand is huge and talking to our members they just can’t see how this will change as long as the existing management team is in place.

“Meanwhile, Alan Joyce and Leigh Clifford continue to pursue an ideological agenda of targeting loyal and honest Qantas staff and threatening the future of Qantas all whilst being hailed as champions by right wing ideologues in business and public life.”

All this comes down to one decision taken on Saturday, 29 October 2011 by chief executive Alan Joyce and his chairman, the ex-Rio Tinto union-buster Leigh Clifford, to escalate what had until then been a low-key industrial dispute by locking out 35,000 workers and grounding all flights.

An estimated 68,000 passengers were stranded, including many overseas.

It took place on Derby Day, the day after Qantas’ annual meeting, and one of the busiest days for domestic tourism travel of the year.

At that stage, unions representing pilots, licenced engineers and ground staff were attempting to negotiate new enterprise agreements with Qantas. For all three unions, job security – specifically the retention and protection of jobs in Australia – was the number one issue.

Industrial action had been minimal.

Sheldon says his members were seeking “dignity and respect at work with fair conditions for all”, He said management reneged on undertakings it had given, and subsequent documents revealed it never intended to reach a settlement.

“TWU members took on average of seven hours industrial action in the run up to the lockout,” he says.

“In contrast, Alan Joyce’s lockout resulted in 1.2 million hours in employer industrial action.”