Qantas is under pressure in the media from a rather novel union campaign, in which compliance with due process is being turned into a virtue in long-running disputes with the airline group because no one is going on strike until some time after Anzac Day and Easter, which coincide late next month.

And while purely coincidental simultaneous  protected industrial action by pilots, engineers, refuellers and baggage handlers may seem bad news for Qantas and travellers, it is no more serious than the apparent failure of the current management and board to run an expanding, profitable and useful company.

How can a baggage-handling strike be any worse than the new do-it-yourself baggage checking-in system now being rolled out at more airports, which some have criticised for being full of glitches, inconsistencies and frustrations for regular flyers but the airline says is getting rave accolades?

For at least the past three months the tired old clichés about Qantas being undermined by “dumping” on international routes have looked absurd beside the likes of Singapore Airlines and Emirates charging more for their premium products than Qantas, and holding their market share steady or rising while Qantas, clinging to aged jets and poor network decisions, keeps sinking toward single figures in market share.

(Qantas had only 17.7% of the international market in February, and even with Jetstar international reaching 7.6% share,  it only had 25.6% of the market as a group compared to a 35% share in 2003 before Jetstar was invented, only to help drive Qantas customers elsewhere.)

The lesson on international may be that premium payers don’t care what a  fare costs, and are abandoning Qantas for what they see as superior quality and convenience.

The current Qantas group strategy seems to be one of continued contraction, in international travel, and a line in the sand in domestic, which is starting to look as much under threat from Tiger as Virgin Blue.  It can’t go on.

In this morning’s installment of the industrial-action-about-to-tsunami-Qantas  genre, its spokesperson says:

“The unions are threatening industrial action while the company deals with rapidly increasing fuel prices, an underperforming international business and the operational impact of natural disasters in New Zealand, Japan and in Australia.”

But so are its competitors. Apart from the A380 groundings, Qantas has the same challenges as its peer airlines, who are all posting record profits and paying their shareholders dividends,  while Qantas isn’t.

It is this group under-performance that leaves Qantas CEO Alan Joyce and Qantas chairman Leigh Clifford and the board, nowhere to run.

Well, apart from off-shoring Qantas assets and jobs to the extent that Qantas flights across the Tasman are a sham, flown by a NZ company pretending to be Qantas,  and Jetstar has started shifting wide-bodied jets to Singapore to be flown serving Australian connections to Changi for a carried using Australian-registered jets manned with Singapore-based workers on Singapore labour agreements.

Those devices, which also included Jetstar flying cadet pilots to NZ to open NZD bank accounts for pay that would avoid Australian superannuation and taxation obligations while working and flying exclusively in Australia,  are at the core of union unrest and calls for job security clauses, whether pilots or engineers.

Whatever the rights and wrongs of demanding job security, there is a much bigger issue for the government of taxation security. Will it allow a precedent where anyone can be employed under a foreign contract issued by a foreign entity and evade Australian taxation and super levies while performing duties in Australia?

Peter Fray

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