The pugnacious flying kangaroo

There was a wacky and delicious moment in “Rainman” when Charlie’s autistic brother insists that they if must take an airplane from Chicago to L.A., they have to fly Qantas. By this point, Charlie, who is more than a little exasperated with his idiot/savant sibling, demands to know why they have to fly on that particular airline. Charlie’s logic is impeccable. Qantas doesn’t crash. The fact that they don’t fly from Chicago to L.A. is not his concern. He won’t get on a plane that doesn’t have a spotless safety record.

Many North Americans have warm and fuzzy feelings about Qantas that Australians don’t seem to share. Familiarity breeds contempt, and Australians have had 88 years to get overly familiar with the airline that began service as Queensland and Northern Territory Aerial Services Limited. Here, it is affectionately known as “The Flying Rat.”

Despite the ups and downs of the aviation industry, which has gone through more shake ups than a mob of kangaroos, Qantas has benefited enormously from a protectionist policy with regard to routes and landing rights. The collapse of Ansett Australia in 2001 saw the market share of Qantas shoot up to 90%. Only the entry of Virgin Blue, perennial labor disputes, fuel costs, and the increasing strength of the Australian dollar have dampened the outlook.

In response to Virgin, the company started a successful low-cost subsidiary of its own, JetStar. Qantas now flies to 81 destinations on 5 continents and has announced plans to expand to South America and Dubai. Since its privatisation in 1993, Qantas has been one of the most profitable airlines in the world.

So, why isn’t the CEO happy?

It’s a labor thing. There have been a baker’s dozen of labor disputes since 1989 alone, pilots, baggage handlers, flight attendants, maintenance workers, catering staff, more maintenance workers, still more maintenance workers and now, finally, engineers.

The recent threat of industrial action by the Australian Liscenced Aircraft Engineers Association seems to be the last straw for tough-minded Geoff Dixon. He’s not calling out the dogs, but he is, apparently, trying to do a Ronald Reagan on the Union. The company hired Newport Aviation to find replacement engineers, offering up to $100,000 for six months work. Strikebreakers.

ALEA is pursuing a wage claim of 5%, citing inflation. Qantas insists it can’t afford more than 3% a year. The airline currently commands 80% of the market share on flights between Australia and the U.S. In February, it doubled its first-half profit, posting a tidy $618 million, putting it on track for a record 1.4 billion. But Dixon has warned that the fuel bill for the 2008-2009 financial year could rise by more than a billion dollars.

Dixon makes no secret of his desire to move maintenance jobs offshore. Only government “blackmail” in the interest of saving Australian jobs has prevented him from doing so. Yesterday, the union backed down, calling off the threatened action. Dixon, who has run the company for eight years now, said that “he and Qantas are holding firm.”

Stay tuned. Qantas hasn’t crashed yet but there’s still time.