When unions fly too high

The dispute between the Unions and Qantas is officially out of hand, and frankly it's embarrassing that it has gone this far.

Nobody would dispute that it is a fundamental right in this country that unions should have the ability to protect or promote the rights of their members. However it is also a fundamental right that any company, private or public, should be able to run its business as it sees fit. If management does a poor job or makes poor decisions, then its owners (either private or shareholders) will make the decisions to address that. It is not the position of any unions to attempt to force decisions on a company that will impede the lawful strategic plan of the organisation.

What the Unions are doing to Qantas is tantamount to industrial sabotage. And for the Aircraft Engineers association secretary Steve Purvinas to advise people to boycott Qantas is a poor reflection on his maturity, leadership and professionalism. He would presumably see himself as 'standing up for the workers' and 'fighting the big guys', whereas in reality he is doing anything but. He is sabotaging, under the veil of workers rights, a publicly owned and iconic Australian company.

Qantas make a compelling argument in drawing a distinction between the performance of the domestic business and that of the international business. The reality, whether the unions appreciate it or not, is that the international arm of Qantas is close to a basket case and has been for years. In fact, if Qantas was purely international and had no domestic business, it would have gone under a long time ago. In the financial year 10/11 Qantas international lost 216 million dollars, Qantas domestic declared EBITDA of 228 million, Jetstar's EBITDA was 169 million, Qantas frequent flyer made 342 million and Qantas freight made 62 million. Big numbers. And a large number of shareholders who expect a return, and they rightly should.

However consider this: nearly every dollar Qantas made domestically, they lost internationally. Any board would look at this and consider shutting down the international operation. And if the unions continue with their aggressive position, that decision would look more attractive.

Don't think Qantas would do it? If you owned the company, why would you run the more expensive Qantas brand internationally over the cheaper Jetstar brand? Why not make their premium brand [Qantas] a pure domestic player and move all the international routes to the more budget Jetstar? Don't think they haven't discussed it, and don't think it couldn't happen.

Qantas haven't been perfect through this process. They made a glaringly amateur tactical error in their campaign by awarding a significant pay increase to their Chief Executive Alan Joyce right in the middle of heated discussions. Whilst the pay rise was probably contractually due, the timing was unfortunate and inflammatory and it nearly cost them the public support they have generally had through this dispute. Had the unions behaved more professionally through this dispute, that one mistake by Qantas might have been a game-changer in the court of public opinion.

And now Tourism Minister Martin Ferguson is involved, telling both parties that the tourism sector had 'run out of patience' and he would refer the dispute to the Fair Work act if it wasn't resolved soon. This comment from Ferguson is significant, as the act allows for industrial action to be terminated if it threatens to materially damage the economy. With 100 flights a week now being cancelled, that horse might have bolted.

No doubt big businesses can sometimes throw their weight around and behave like bullies, however through any objective analysis, Qantas have been highly professional through this dispute (Joyce' pay rise aside). However the Unions are behaving disgracefully, particularly Steve Purvinas, and irrespective of their desire to get their members a better deal, have absolutely no right to impede any company from managing its business in the way it sees fit.

The best advice for the Unions, and Steve Purvinas, might be this: be careful what you wish for, you might just get it. But ultimately at what cost?