||Issue No. 142||28 June 2002|
Interview: Safe as Houses
Safety: Ten Steps to Safety
History: Staying Alive
Unions: Choose Life
International: Seoul Destroyers
Corporate: Crash Landing
Activists: The Refusenik
Review: Dumb Nation
Poetry: Helping Out The Rich
Redundancy Bonus for Members Only
Lib MP Named in Cole Commission
Sentencing Guidelines for Safety Breaches
Safety Lock-Out Enters Second Week
Unions Seek Talks With New Airport Owners
Strip Bosses Face Dressing Down
Beattie Called Into Bargaining Impasse
Nurses Deliver Largest Ever Petition
US Braces for its Own Waterfront War
The Locker Room
Week in Review
Good News from the Pilbara
Go Mark, Go
Labor Council of NSW
When Ansett collapsed, Prime Minister John Howard, was quick to blame work practices. Commentators from the right wing think tank, the Institute of Public Affairs, supported that view. The IPA's Alan Moran, for example, argued that "union muscle" strangled "the goose that lays the golden egg."
An examination of airline industry productivity measures shows that Ansett employees in fact significantly increased their productivity during the 1990s. Ansett revenue per employee, for example, grew an outstanding 25 per cent between 1992 and 1998. Two other industry measures indicate that Ansett workers' productivity growth during the 1990s was twice as great as in Qantas for the revenue from passenger kilometres travelled per employee and three times that of Qantas for the available seat kilometres per employee.
In addition, the collective agreements during the 1990s had set out agreed protocols for changes in work practices. These resulted in agreements on specific flexibilities with the Transport Workers Union and other unions.
It was other factors that crashed Ansett. Ansett had too many aircraft types leading to higher operating and maintenance costs. Where Qantas had three types on the major routes, Ansett had seven, including dedicated freighter aircraft.
News Corporation and TNT, joint owners of Ansett from 1979 to 1996, failed to either streamline the fleet or invest in upgrading aircraft during the 1990s. When Air New Zealand bought out TNT in 1996 and News Corporation in 2000, it had no additional funds to invest in Ansett, and when Ansett faltered neither the New Zealand nor the Australian government were prepared to prop up the airline.
But, Air New Zealand had no clear strategy in place, either. It hollowed out the Ansett management structure, transferred all of the major management functions across to Auckland, and left Ansett without leadership for more than six months. ANZ management appeared little interested in building on the company's achievements as a result of the "Reach Out" program on customer focus and the agreements with the unions.
There were a lot of accusations against ANZ for skimming off Ansett resources but it was not in their interests to kill Ansett off. ANZ had wanted a presence on Australian trunk routes for years and Ansett provided that opportunity. However, Air New Zealand executives appeared to have no comprehension of the requirements of, and sensitivities required for, managing a foreign workforce, had no clear strategy for positioning their airline in the unified aviation market in Australasia, and little appreciation of Ansett as a national brand.
The principal issues faced by Ansett during the past decade or so were managerial problems. The critical incident was the grounding of the Boeing 767 fleet by the Civil Aviation Safety Authority (CASA) in Easter 2001 on account of Ansett maintenance breaches. CASA identified a range of managerial breakdowns. These were symptomatic of the long-standing managerial malaise stretching back to the 1980s.
In the event, the allegations by some commentators, the Prime Minister, and others that work practices and the unions killed off Ansett are cruel and unwarranted attacks on a workforce which has lost employment, whose entitlements may still be under threat, whose livelihood has in many cases disappeared, who demonstrated over long periods that they could have collective interests and strong affection and loyalty for their company, and who had demonstrated significant improvements in productivity during the 1990s. These do not come from poor work practices. Against the standard productivity benchmarks in the industry, the Ansett workers had proven their mettle.
Jim McDonald is Senior Lecturer in Industrial Relations in the Faculty of Business, University of Southern Queensland, Toowoomba
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