Sunday 30 October 2011

A win for Qantas would be a win for Cairns

In toady's Loose Change column, local business commentator Mark Beath, dishes up a contrary view on the Qantas dispute.

The Qantas grounding has obvious threats to the Cairns economy. At least in the short term.

It would be expected and hoped that this phase of the dispute will be short and that services will resume this week.

Longer term impacts will be more complex related to the dispute itself and the impacts of any subsequent agreement. So it was interesting today to see the blog response from Harry Clarke, an economics professor at La Trobe University: Qantas to fight trade union reactionaries...
Allan Joyce’s move to ground the entire Qantas fleet today was an inevitable attempt to break the backs of trade unionist reactionaries. As a Qantas shareholder I am dismayed at the current outcome but, as Qantas has not paid dividends for a couple of years, I support attempts to force the airline to gain competitiveness and staying power. Having pilots paid over $500,000 annually is inconsistent with this task and the attempts by maintenance engineers and pilots to trash the Qantas brand suggest that the best outcome for these clowns is to be sacked and then sued. Ungracious, overpaid pilots who lie to me about their employer when I travel on their airline arouse nothing within me but contempt. When a firm is losing $2m per day because of a strike the fact that the CEO is paid $5m per year is irrelevant. He is worth $20m if he can give these reactionary trade unionists the kick up the backside they so richly deserve. Qantas sells air services as an internationally traded good and international travellers are voting with their feet to support other airlines which offer cheaper and better quality service. Domestic air services in Australia remain expensive and the service is anything but great. The Australian travelling public deserve better and Australia needs a viable international carrier not a sheltered workshop.
Already the Labor politicians are shaking in their boots at Joyce’s move because it is hardly a good look for the Labor Government but reading Joyce’s press release I support it. The Government should keep out of this one. Qantas will fail without decisive action and, even though this might cost me money, I’d prefer to see this fight resolved now – it offers the best prospect for competitiveness reforms. Pilots, engineers, baggage handlers – accept the need for reform or find yourself new jobs. As the Qantas AGM showed you have no support among shareholders and the travelling public will see you for the contemptible grasping reactionaries that you are. That you attacked the customer base of Qantas as a negotiating tactic should never be forgotten.
Well, I suspect that rant from Harry will not gain unanimmous support of sentiment, which may be an understatement. However, as previously posted, why I like Harry is that he can never be accused of ideological bias and dishes it out in equal measure accross the spectrum. The very next post on Harry's blog starts "Tony Abbott’s idiot populism..... " and then goes on to berate the "dwarf throwers at Catallaxy" which is our most prominent libertarian economic blog with some high profile right wing economists. Yep, he's my kinda guy!!

Regardless, the pay and security demands from the unions here can never be seen as positive for the Cairns economy. It can only ever contribute to slower regional growth and higher risk. The Asia focus of the Qantas business strategy is to our advantage. The concept of job security in airlines indicates that these unions have never grown past their protected public service mentality. The interests of the employees of Qantas, even local employees, are not the interests of Cairns.

As Warren Buffet famously observed, from the perspective of an investor, the best outcome would have been for someone to have shot down the Wright brothers at Kittyhawk given the investor money that has been trashed in this industry.

Qantas is 90 years old. In metaphorical perspective job security in context for this industry is like a 90yo prostitute demanding job security in a brothel.

1 comment:

John Babet Community Reformation Group (CRAG) said...


Senator Xenophon (South Aust) Speech in Senate - Hansard 23 Aug 11 2011

Original Hansard:;fileType=text%2Fxml