Truth is turning into an early casualty as Qantas management, the ACTU and the Australian Licensed Engineers Association get ready for “possible” peace talks on Monday.

No matter what the outcome, there is not going to be a rapid restoration of full schedule at Qantas, because of the backlog of work that needs to be done to clean up its jets and restore them to full operational condition.

Many of the cancellations that were blamed on the overtime bans by the ground engineers this week were due to a lack of customers rather than the claimed success of the industrial action.

In other words, demand is dropping, and no doubt faster than it would have if there wasn’t a concern among travellers that their Qantas flight would be late, very late.

Government pressure on the engineers to give in is in part being driven by the Queensland Government’s concerns at the damage being done to tourism.

Those claims are absurd. Inbound tourism to Queensland is being damaged by a very expensive Australian dollar and the emphasis by Qantas on replacing its Japan services with Jetstar flights.

Jetstar services into Queensland are not being affected by the engineering dispute, but by unrelated management decisions by its Qantas owner, and domestic tourism has been impacted by the exchange rate flip side, which is driving a boom in outbound tourism that is painful for the Sunshine state and threatens to kill off some of the Tiger Airways flights from Melbourne.

The Japanese market abhors the label “low cost” to the airline experience as much as it values a good deal. Jetstar is the kiss-of-death star in the consumer culture of Japan, which places enormous value on packaging, image, courtesy and relative comfort.

Despite offering good deals Jetstar is up against cultural perceptions that aren’t going to change any year soon and this is the real challenge for Japan-Queensland tourism.

The engineers that are in today’s terms still essential for the prompt servicing and dispatch of Qantas flights have not had a pay rise since the start of 2006. Very large pay rises have been enjoyed by smaller sections of the Qantas work force since then, especially in the bonus earning management positions that hack into cost centres like maintenance and parts inventories.

Monday’s talks will also take place in the context of management uncertainty at Qantas. Dixon’s fixation with keeping the engineers on as little money as possible while the product and reliability goes to hell in a handcart is very bad for the numbers. Peter Gregg his CFO is the front runner, closely followed by product supremo John Borghetti and then Alan Joyce, the CEO of Jetstar.

Jets that had been earning money for 12-14 hours a day are averaging much lower utilisation.

The only thing that is encouraging is safety. The word from the hangars is that commendable decisions have been made by stand-in management engineers to pull from service jets being flown with time limited defects that in tandem could cause a disaster.

An example was the grounding of a jet that could have flown a few more sectors with a minor fault in a reverse thrust mechanism, and likewise with a problem with wheel braking performance. But not together on the one plane, because of the risk, however small, that both sets of faults might under emergency braking end in a crash.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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