Qantas CEO Alan Joyce is being reported in The Australian (online) today threatening to pull Project Sunrise if the pilot’s union doesn’t play ball. Mr Joyce says he won’t be ordering aircraft until he has the Sunrise business case tied down and a key part of the business case is getting the pilots to agree to productivity gains similar to those seen when the 787-9s were brought into the fleet.
“It’s a very exciting project but it’s not too big to fail and if we don’t have a business case we won’t do it …”
My Joyce said he was after some flexibility from the pilots, harking back to when the 787-9s were introduced as an example of what he was seeking – how the aircraft are operated, how night credits are applied, and flexibility with inflight crewing.
The Australian and International Pilots Association (AIPA) has generally been supportive of Project Sunrise. But Mr Joyce has set an end of 2019 timeline to wrap this up and get the aircraft ordered. The AIPA has told The Australian it will be challenging that end of year deadline.
“We will be very disciplined in this,” Mr Joyce said.
Alan Joyce has form for playing hardball with the airline unions. In 2011 he famously shut down the Qantas with immediate effect in response to continuing industrial action action against the airline which was estimated to have cost Qantas nearly two hundred million dollars.
The effect was dramatic. It brought the more militant union outliers to heel and gained Mr Joyce the grudging admiration of many Australians – despite the inconvenience.
It gave Mr Joyce the impetuous to transform the airline from a loss making entity to a profit machine. In the process he cut some 5000 jobs, sold in excess of 50 aircraft, and substantially reduced overall spending.
With a track record like this, there is no reason to think Alan Joyce might be bluffing.
The Project Sunrise aircraft haven’t being ordered yet. Other than bad PR, Alan Joyce could walk away from the whole enterprise with minimal financial fallout. As Mr Joyce says, he has a responsibility to shareholders.
It will be quite something to see who wins this standoff.