Neha Jain: http://newzealandaviationnews.blogspot.com/ 26

1. Unions set to tackle the flying kangaroo
IF you were to believe the nation's trade union leaders, the confrontation between Qantas and the labour movement is not only shaping as this year's biggest workplace dispute, it threatens to escalate into the most serious industrial fight since John Howard took on the maritime union in 1998.

Sound far-fetched? Here's Tony Sheldon, the national secretary of the Transport Workers Union who has been talking up the prospect of industrial action by his Qantas members before even lodging the union's claim

"This could certainly be the largest issue confronting the entire trade union movement since the waterfront dispute," Sheldon tells Focus.

Steve Purvinas, who represents the airline's engineers, claims the next phase of negotiations "will most likely be the most important in the history of Qantas".

Barry Jackson, president of the Australian and International Pilots Association, says the dispute is "about jobs and whether there will a recognisable aviation industry based in Australia in the future".

Staring down the aviation unions is Qantas management, led publicly by chief executive Alan Joyce. After announcing a healthy half-year profit last month, he says Qantas is being buffeted by rising fuel prices, a combined $70 million hit from the Queensland floods and Cyclone Yasi, and soon-to-be-announced losses due to the earthquakes in Christchurch and Japan.

"This is the most serious challenge the business has faced since the global financial crisis and as such we will need to review our operations to ensure our ongoing success," he told Qantas employees via email this week.

In an interview with Focus, Joyce condemns Sheldon's comments as "outrageous", accusing the unionist of positioning for a fight before negotiations over a new workplace agreement have started. "I think we're obviously concerned we're getting to the stage where unions believe that strike action is a viable and necessary negotiating ploy before you've exhausted all negotiations," Joyce says.

"Industrial relations dialogue starts with you going through as much dialogue and trying to work together to try and avoid industrial action.

"Industrial action should be a last resort. Industrial action is going to damage the company. It is going to damage (union) member job prospects and their job security because we are in a very challenging environment with the fuel price where it is today, and we're in a very challenging environment with the issues we've had in Japan and New Zealand.

"I think even talk about industrial action is damaging to their members' interests and we should not be going there."

At the centre of the dispute are union demands that Qantas provide guarantees on job security, offshoring and the use of outsourced labour. Their push is being backed by the Australian Council of Trade Unions, which says the aviation unions' campaign is consistent with its attempt to make insecure work the dominant workplace theme on the political landscape this year.

"Australians should not have to fight for job security and fair pay, yet the airline which proudly flies a national emblem is refusing to afford its workers the respect and fair go this country stands for," ACTU president Ged Kearney says.

"The use of labour hire and outsourcing, offshoring, short-term contracts and casualisation have all been part of Qantas' approach to undermine job security in the pursuit of higher profits."

The pilots union wants the same terms and conditions that apply to Qantas pilots to apply to any Qantas Group flights operated on a code-share basis or that replace a Qantas flight.

The union says the demand is designed to negate the impact of the company setting up subsidiaries that employ pilots on lower wages and conditions in New Zealand and Asia. For instance, the association asserts that through the use of a "sham company" such as Jetconnect, Qantas makes 'red tail' flights across the Tasman, with pilots who are paid in New Zealand dollars, under New Zealand conditions.

Jackson denies the job security clauses represent a union bid to guarantee pilot jobs.

"The job security clauses we are fighting for are an attempt by Qantas pilots, who care deeply for the Qantas brand, to stop the deceptive outsourcing and offshoring by a management team seemingly hell-bent on a race to the bottom on aviation standards," he says. "Our members are not naive to the competitive environment in which Qantas operates. We want the company to continue growing and being profitable and we believe that accepting the terms of our proposed agreement in vital to achieving that."

Purvinas, the federal secretary of the Australian Licensed Aircraft Engineers Association, says his union is seeking guarantees on job security and offshoring, including assurances that Qantas would have the ability to do A380 heavy maintenance in Australia.

The union believes Qantas wants increasingly to outsource work, and is seeking a clause in the new enterprise agreement that says any contract arrangement entered into by Qantas must offer the same or better wages and conditions as contained in the agreement.

"We are demanding protection to prevent our jobs from being undercut by individuals or labour hire groups offering to do the work for less money," he says. "It would be farcical to think we could negotiate our wage rates, lock them into a binding legal contract, our enterprise agreement, only to see Qantas cut another arrangement with another group to sidestep our agreement."

Similarly, the Sheldon-led TWU, whose members include baggage handlers, catering and ramp staff, wants Qantas to agree to so-called "port rates" that compel any contractor to pay wages and conditions as contained in the airline-union agreement.

Sheldon says the use of outside labour had led to higher staff turnover, lower training, and reduced safety and training across the airline's operations. "Employees are indicating they would like to see port rates in place so there is not an underclass of employees at our airports, as well as increased training and screening for all contracted workers," he says.

Joyce says the company cannot accept job security clauses as they would be "hugely detrimental" to the commercial operations of Qantas and Jetstar.

"A lot of the unions are raising these job security claims which are, in essence, a veto on change, and they are a veto on us being able to run the business and have flexibility," he says. "Of course, that would cause us huge problems because given the cyclical nature, and the volatility, and the crises that can happen in this business, we need every possible lever we can pull to ensure that the business doesn't underperform and that we can make sure we can manage the business effectively during periods like this."

Joyce says some of the unions were adopting the tactics of the US unions by deliberately raising issues about the company's safety and security performance in order to put industrial pressure on management.

"'I think some of the unions are using the playbook from the North American unions," he says. "They have a very open and obvious mechanism and one of them is that you put the company management under pressure by attacking the brand. That is very shortsighted. If it damages the brand, it damages the company and if it damages the company, it damages employee's job security."

Joyce cites allegations by Sheldon this week that Qantas had profiteered from the Japan earthquake by charging exorbitant fares to passengers leaving Tokyo, a claim the company describes as baseless and grubby.

"I am pretty proud of Qantas," Joyce says. "I think it's a great company. It's an Australian icon and people attacking Qantas for short-term gain is absolutely appalling. And any time it does occur, it certainly gets us worked up but it doesn't encourage us to give in to union demands."

2. Virgin Blue warns of full-year loss on rising jet fuel prices
VIRGIN Blue Holdings has warned of subdued full-year profit as higher jet fuel prices, pushed up by turmoil in the Middle East and an earthquake in New Zealand hit demand for travel.

The airline group, comprising Virgin Blue, Polynesian Blue, Pacific Blue and V Australia, said today it expected to post a full-year before tax loss of between $30 million to $80m.

That would compare to last year's statutory net profit before tax figure of $34.3m and this year's first-half figure of $37m.

In early trade, Virgin Blue shares fell 2.5 cents, or 7.58 per cent, at 30.5c, the lowest since August 26, 2010.

At the airline's 2010-11 first half results presentation in February, Virgin Blue chief executive John Borghetti said the second half would be "challenging", but declined to issue specific earnings guidance, saying it was too early to do so.

Australia's second biggest carrier said jet fuel costs have risen even further since it released first half results on February 23.

The extra rise in the last six weeks has added an extra $50m to its second-half fuel costs. The Christchurch earthquake is expected to have a $15m impact, it said.

"We have witnessed an unprecedented number of significant events in an extraordinarily short period of time, including natural disasters and a sharp spike in fuel prices," chief executive John Borghetti said in a statement.

"These events have severely impacted consumer confidence, resulting in a slower than usual recovery in tourism," he said.

Mr Borghetti said the market conditions validated the airline's plan to wean itself off the heavy reliance on the leisure market and look for a larger share of corporate and business travellers.

4. ExecuJet Expands Down Under and in Europe

International FBO operator ExecuJet announced three new FBO additions to its line-up. At Essendon Airport in Melbourne, Australia, the company will expand its current maintenance facility to include an 8,100-sq-ft FBO with integrated lounge area, offices and stores. ExecuJet Melbourne also plans to include aircraft management and charter services in the new building, which is expected to open this August. Currently, the company’s Part 145 repair center holds New Zealand CAA and Australian CASA certificates of approval and is a Gulfstream-, Bombardier- and Embraer-authorized service facility.
The services provider has also been selected to operate a new 21,500-sq-ft FBO/hangar on the western apron at Wellington Airport, which is currently undergoing redevelopment. Once complete in September, the new facility (ExecuJet’s first in New Zealand) will offer FBO services in conjunction with Wellington’s Capital Jet Services, along with maintenance, aircraft management and charter.
The aviation services provider also purchased the former Assistair FBO at Valencia Airport in Valencia, Spain. Located in the airport’s general aviation terminal, the location offers support services including fuel, weather provision, permit handling, flight planning and operations support. The location is ExecuJet’s fourth European FBO.

NEHA JAIN

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