Qantas accused of driving away rivals

[NickN]

from smh.com.au

Andrew West
April 16, 2009
QANTAS is dramatically increasing the prices it charges other international airlines for providing baggage handling and ground services in a calculated effort to lose business, an airline union claims.

The Transport Workers Union alleges the inflated quotes are part of a broader strategy to shed jobs and outsource all ground services to contractors that pay lower wages.

In the past six months, the union said, Qantas had effectively driven away Philippine Airlines, Etihad and its own Jetstar subsidiary by increasing prices for ground services by up to 30 per cent.

"Whoever heard of putting up prices, especially this much, in the middle of a recession?" the union's national secretary, Tony Sheldon, said.

"We believe their ultimate strategy is to downgrade training and wages for the ground crew they already employ by actually losing contracts. That allows them to say they cannot compete and the only way they'll be able to compete is by cutting wages."

A Qantas spokesman, Joe Aston, confirmed the company had lost several clients. "Some airlines will move to other providers."

Mr Aston said Qantas had "adjusted our rates to be more in line with commercial prices", having previously provided ground services to other airlines at cost price.

The Herald has confirmed that Philippine Airlines will terminate its contract with Qantas for ground services on May 16. Philippine Airlines's Australian general manager, Arnul Pan, said Toll DNATA would take over all its ground operations, including passenger check-in, baggage handling and cargo.

"The decision was made in head office [in Manila]," Mr Pan said. "They came down here to Sydney and had a meeting with Qantas and just made the decision."

A spokeswoman for Etihad, Anne Tullis, also confirmed the Abu Dhabi carrier had renegotiated its deal for ground operations in Sydney late last year and Qantas had lost the contact.

"In order to be cost-effective and competitive, we put the provision of our ground handling services at Sydney Airport out to tender in the last quarter of 2008," Ms Tullis said in an email.

Three companies took part in the bid, with Menzies Aviation lodging the most competitive price.

It "met our other service delivery criteria as a result of which the company was selected", she said.

"The company now provides ground handling services at Melbourne and Brisbane as well."

Mr Sheldon said the union was attempting to begin talks with Toll DNATA to negotiate a collective agreement for staff taking over the Qantas contracts. But he said that contract staff generally received lower rates than Qantas employees.

Employees at Aero Care, the contractor that now runs ground operations for the Qantas budget subsidiary Jetstar, are paid almost $300 a week less than their Qantas counterparts.

Last month, Qantas baggage handlers staged a wildcat stoppage to protest at the loss of at least 120 jobs through outsourcing.

http://www.smh.com.au/travel/travel-...0415-a7ke.html

The folks at Menzies, Toll and Aero Care will be happy with this, picking up the extra revenue during a recession!

It makes sense to outsource the work if there are others willing to do the same job at a lesser cost, provided operations aren't significantly affected.