This assignment is a case study of Qantas airline, which is based in Australia. The assignment discusses the case as well as how the case is updated by the article titled ‘Qantas survival strategy a reality check for unions’.
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Qantas airline was exclusively owned by the Australian government but the changes in the aviation industry which started in early 1980s, saw the government sell some of its shares (45%) to other shareholders including British airways in 1993 (Creedy 19).
Up to and until 2007, the firm used to make huge returns despite the deregulation of the aviation industry initiated by the United States. In the wake of the 2008 global financial crisis, the firm’s returns started dwindling.
This made the CEO, Mr Alan Joyce come up with a strategy to ensure that the firm remained competitive in the highly liberalized aviation industry. In this regard, the firm increased capital on its low-cost subsidiary Jetstar airline to compete with other airlines like Malaysian airlines, British airways, Thai airlines and Emirates.
The article is about how workers’ unions work and more specifically, the Qantas workers’ unions. It updates the case by using it as a case study to illustrate the capitalistic nature of many unions. The argument of the authors of the article is that unions are capitalistic in nature contrary to the common rhetoric that they are socialistic in nature.
It also updates the case by the argument that the global financial crisis forced Qantas to strategize on how to sack the highly paid Australian workers and replace them with others from China who could accept low wages and poor working conditions. This was however resisted by the union.
The resistance by the workers’ union was not driven by logic or rationality, but rather, by self-interests. This is because when the firm had the monopoly to control prices, the unions were contented because they were benefiting from the returns of the high prices of products which were passed on to the consumers.
Their bargaining power was however compromised by the highly liberalized global aviation industry which made it possible for any firm to outsource labour and capital so as to remain in business.
Creedy. ‘Qantas and BA struggle to take off”. The Australian, 4 December 2008: 19.