Planes set to fly again - but what now for Qantas?

Qantas management have taken a risky approach to end their dispute with unions. AFP/William West

Qantas planes are set to return to the air today after Fairwork Australia ruled to terminate an industrial dispute that grounded the airline over the weekend.

The extraordinary action on Saturday by Qantas chief executive Alan Joyce to ground the planes affected more than 68,000 passengers worldwide. Qantas and the three unions involved will now have 21 days to resolve their differences through mediation.

Roy Green, Dean of UTS Business School at the University of Technology, Sydney looks at how it came to this and what now for Qantas.

Read the full FWA decision here

Over the past two decades, Qantas has grappled, more successfully than most “legacy” airlines, with the challenge of moving from state ownership to a commercial operation.

Among its strategic initiatives was the creation of Jetstar to enable the development of Qantas as a premium brand through market segmentation.

It was largely the success of Jetstar that catapulted Alan Joyce to the leadership of Qantas over his rival John Borghetti, who has gone on to reposition Virgin as a formidable competitor in the premium brand space.

Now, potentially squeezed between Virgin’s aggressive campaign for the premium traveller and lower cost Asian competitors and with an ageing aircraft fleet compounded by delays in the delivery of new planes, Qantas has been forced to make a further strategic reassessment.

Changing business model

It seems to have decided to follow through the logic of the Jetstar model on a global scale, even, if it proves necessary, at the longer term expense of the Qantas brand.

This is a risky approach but one worthy of discussion and debate, and certainly one that should include its employees, shareholders and indeed the Australian government under the terms of the Qantas Sale Act.

So here is the problem. The Qantas board and senior management have made this decision unilaterally on the basis that no one else could be trusted to participate, and possibly emerge from a broader dialogue with different conclusions.

But the point is that corporate leaders do have a choice in devising and implementing new and untested business models.

They can behave as Qantas has done, with an extraordinarily insensitive combination of job losses, a 70% pay rise for the CEO and now a full-scale industrial lock-out.

Or they can pursue a more inclusive approach, drawing on the talent and dedication of their workforce, as well as a residual but still robust loyalty to an iconic brand.

Lock out

Alan Joyce isn’t the first Chief Executive to employ adversarial tactics against his workers. AAP/Mick Tsikas