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From Schwartz Media, filling in for Ruby Jones, I’m Elle Marsh, this is 7am.

In recent weeks, we’ve seen chaos at airports around the country. And it’s about to get worse.

Major airports and airlines have warned that the July school holidays could see even more delays and disruptions as they scramble to try and fill thousands of job vacancies.

Of course, there’s one Australian airline that used to fly above all the chaos: Qantas. It’s long been one of the safest and most reliable airlines in the world. But now is its reputation at risk?

Today, senior reporter for The Saturday Paper, Rick Morton, on how Qantas became one of the country’s worst performing airlines and the future of the company.

Its Wednesday June 22.

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ELLE:

Alright. Rick, I think anyone who's been travelling at the moment or who knows anyone who's been travelling in this first half of the year will know that it's been a bit chaotic at airports. And can you tell us, is flying actually more difficult than it was pre-pandemic?

RICK:

I think the art of getting planes off the ground is more difficult. You can actually get them in the air and getting passengers to their destinations with their luggage without major delay. It has been pretty chaotic over the last few months…

Archival Tape -- Karl Stefanovic (The Today Show):

“Well, travellers are this morning being warned to brace for more delays at airports across the country. The chaos and crowds expected to last…for weeks…”

RICK:

…especially since Easter, when we essentially came back to the pre-COVID, you know, traffic volumes in domestic air travel.

Archival Tape -- ABC News reporter:

“Well, very busy scenes here at Melbourne Airport and long lines here at the check in counter. Many flights actually with some delay or another, in fact, most flights at this point…”

RICK:

And that's where this story really takes its root, when people started going interstate again.

Archival Tape -- Sky News anchor:

“Mass airport delays in the leadup to the Easter holiday period - travellers are experiencing long queues, and they’re missing flights…”

RICK:

There was a lot of friction at the airport terminals in terms of getting through security, in terms of, you know, actually boarding the plane if there was a plane that had the crew to take off and then if they got to the other end, whether they would actually, you know, find their luggage there, because there were so many stories of people not just being, you know, disconnected from their luggage, but for having that lost completely…

Archival Tape -- ABC News reporter:

“Melbourne airport actually is expecting 1.4 million people to pass through its doors over the next couple of weeks…”

RICK:

…or having been without it for days at a time, which is really unusual in a pretty well-oiled machine. I mean, aviation has to run like clockwork.

Archival Tape -- Passenger at airport:

“We checked in our bags now before the flight…just cancelled. Qantas is as bad. I've had friends call. Same thing yesterday, cancelling an hour before the flight…”

RICK:

And if you go back to when travel really started picking up again properly, when passengers flooded back into airports around April over the Easter break, Qantas was the airline that stood out for posting the worst airline industry performance statistics since the recording of those stats began in 2003. Just 58.7% of Qantas flights actually arrived on time. That's worse than Virgin Australia or it’s own budget subsidiary Jetstar. And it’s a pretty sad state of affairs when the premium national carrier is falling to the bottom of the pack.

ELLE:

Yeah. And that's not really what passengers have come to expect from Qantas, is it, Rick?

RICK:

No, not at all. And there's so many stories like this and I mean, so many.

Just last week, one passenger, Eleanor Gordon Smith, who's a Ph.D. candidate, spoke out about her flight, Qantas flight 8. It was cancelled without warning at 2 a.m. at Dallas-Fort Worth International Airport in the United States of America.

She said there was, and I'm quoting this, “a planeload of people at check in with nowhere to go and no guidance.” She went on to say, “the Qantas desk isn't just unmanned, it has become a Lufthansa desk. No texts, phone calls, no updates on Google. The flight has disappeared from the Internet. I've flown Qantas exclusively for 20 years,” she said, “and loved them, but you leave 300 people in an airport at 2am, where there is no food on site, no hotel vouchers, and not one staff member turns up at any time when they said to board. And she went on to say, and forgive my French here, “fuck Qantas.”

ELLE:

That's pretty wild that they didn't even have a Qantas desk or any staff.

RICK:

That's it. Yeah, it literally turned into a Lufthansa desk. That's quite a feat.

ELLE:

I mean, when did things start to deteriorate for Qantas? It's clear that the whole aviation industry has been struggling to get back on its feet and is suffering from things like staff shortages. But why is Qantas particularly struggling?

RICK:

I think part of it actually is in the explanation for what happened around Easter because they're saying it's not just us. They're saying the whole aviation sector, not just in Australia but around the world, is suffering. In fact, there are skills shortages everywhere in in most industries like hotels and things like that.

But that is a convenient way of looking at something that they performed the worst in in Australia. And the fact that there are really clear signs within their own attempts at cost cutting that have led them to this moment.

Archival Tape -- ABC News host:

“Qantas has just announced it will cut at least 6000 jobs across all parts of the business…”

RICK:

So put it this way: the size of the Qantas workforce has been cut by about 9000 jobs in the past two years of the pandemic.

Archival Tape -- ABC News host:

“The airline also says 15,000 employees will continue to be stood down, particularly those associated with its international operations…”

RICK:

And there's been some major workforce changes as well. On top of all of those things, which Qantas of course itself says it has had to do to cope with the shutdown of travel during the pandemic. But where it gets really interesting, if you ask me, is that when you dig into just what Qantas chose to cut during this time, you start to see some funky stuff.

ELLE:

What do you mean by that, Rick? Can you tell me a bit more about those cuts and changes?

RICK:

So the big thing here is ground handlers. They call these ‘below the wing services’ at airports. So pretty much anything that is on the ground outside the airport is below the wing. And in, you know, mid to late 2020 when news of this pandemic was kind of shooting around the world and we were having lockdowns and travel had essentially stopped, what they saw was an opportunity to save some cash.

Now, in November 2020, Qantas said that they were letting go of these 2000 Qantas employees who, you know, loaded planes, handled baggage, all of that stuff, and they instead were going to just hire those operators, basically cheap labour from other companies that were not covered by as generous enterprise bargaining agreements and that were essentially third parties.

So that was the announcement. Now, last month, the Federal Court of Australia found that the airline's decision to do that in the way that it did and at the time that it did was taken illegally.

Archival Tape -- 7 News reporter:

“Nearly 2000 Qantas staff, baggage handlers, cleaners, ramp crews lost their jobs to contract workers during the pandemic. The Federal court upholding a ruling it was illegal…”

RICK:

There was a high level team of executives deliberately discussing doing that move at the time it did to avoid industrial action from the Transport Workers Union.

Archival Tape -- Speaker 1:

“This is the largest finding by a country mile of illegal sacking and outsourcing in Australian corporate history…”

RICK:

Airline executives in the Group Management Committee had actually discussed what they called a vanishing window of opportunity to pursue a complete exit from ground handling, and that this would save the company $103 million annually.

They knew that they could do it in a pandemic because the planes wouldn't be travelling anyway, so it would minimise disruption.

ELLE:

So is what you're saying that even though there was these major workforce changes for thousands of ground handlers during the pandemic where they were then outsourced, this was potentially part of the plan well before the pandemic?

RICK:

So the thing is, the planes were on the ground.

They wanted to get rid of the ground handlers at this point because the pandemic gave them cover. But this is actually the completion of a long held goal at Qantas and a programme of outsourcing of Qantas, the job that began, you know, almost 15 years ago.

ELLE:

We’ll be back in a moment

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ELLE:

Rick, we've been talking about Australia's most prestigious airline carrier Qantas, and how it shed a lot of staff during the pandemic. But it appears that this was actually part of a longer term strategy and it wasn't wasn't wholly to do with lockdowns and travel bans. So Rick, whose strategy is this and how did they lay the groundwork?

RICK:

So it's a good question. Alan Joyce is the current chief executive officer of Qantas and he's a big personality ..

Archival Tape -- Karl Stefanovic (The Today Show):

“Qantas CEO Alan Joyce joins us now. Good morning to you, Alan. Nice to see you this morning.”

Archival Tape -- Alan Joyce:

“Good morning, Karl. Good to talk to you again…”

RICK:

and makes a lot of media appearances and he's beloved by the business pages, as is Qantas the brand, and he knows that.

Archival Tape -- Alan Joyce:

“And what we have for you, Karl, because I know you're exclusively travelling first class, a first class cabin will have its own beds, will have its own seat, will have its own wardrobe, the only thing that's missing is its own dunny, mate…”

RICK:

But he's also been one of the highest paid CEOs in Australia over the last decade and he's earned about $100 million since 2008 when he became the Qantas boss.

He has really been the principal architect of and certainly the most enthusiastic champion of this plan to restructure the Qantas workforce.

Qantas always had a higher cost base than the other airlines when he took over and that was something that he had determined to change early on. It's basic business, right? Lower the cost base, increase the profit. Alan was very enthusiastic about them and he was actually determined to not just lower the cost base but to drive it through the floor, which is exactly what we've seen happen.

But it's been put to me by other experts as well, company directors. And I've spoken to investors, people who get the sense that Qantas has now done, if not irreparable damage, significant damage to its brand because it hit you know, as one person said to me on the phone, you know, at what point do they just admit that they're a budget carrier?

ELLE:

It sounds like you've been speaking to a whole range of people within Qantas and outside of it. What have they been saying about some of these long term consequences of structural workforce changes and cuts?

RICK:

Yeah, so I spoke to Michael Kaine, who is the Transport Workers Union national secretary...

Archival Tape -- Michael Kaine:

“20 years ago, a Qantas job was the most sought after job, one of the most sought after jobs in our country. And you would come to that company, you'll be part of building and maintaining the spirit of Australia. You would have a permanent job, it would be one that would support you and your aspirations and your family…”

RICK:

and he told me that it is and I'm quoting him here, it is really regrettable and it's really disappointing for the Australian flying public that just when they want aviation to literally take off again, we've got airlines and particularly Qantas that just don't seem to be match fit.

Archival Tape -- Michael Kaine:

“…over the last 15 years there's been a deliberate strategy to push work away from direct engagement, permanent jobs, good jobs that were sought after to the lowest common denominator. And the Australian Flying Public and workers are very much bearing the terrible consequences of that now.”

RICK:

You know, ground crew is just one example. I was talking to a former union boss now, now Labor Senator Tony Sheldon, who said that Qantas has treated its staff such as check-in staff, the baggage handlers, the engineers, the pilots, cabin crew and other frontline staff. Quote, unquote, with utter contempt, and he told me in a statement “Joyce is a textbook example of everything wrong with modern day corporate governance. He has taken vital national infrastructure, illegally outsourced jobs, and cut the pay and conditions of those who remain. All to improve Qantas's margins and boost his own pay at the expense of his workers and the travelling public. In less than 15 years, Alan Joyce has trashed a century old Australian institution.”

And I should say that all of this happened over the last two and a half years when Qantas got about $2 billion in Australian government/taxpayer funding, including $855 million in JobKeeper, the clue of which ought to be in the title in that job should be kept. So that’s the context for all of this, this particular species of anger I think we're seeing about Qantas at the moment.

ELLE:

Yeah, wow. Do you think this could be a potential turning point for Qantas? Is anything going to change or are we just going to continue to see more workforce cuts and outsourcing?

RICK:

Yeah look, none of these problems are fixable unless Qantas is willing to admit that it is at least partly or, you know, largely the cause of its own kind of failures. And it is because this workplace culture does have an impact.

So there is a particular, you know, place in the hearts of many Australians for Qantas the brand, and Qantas, the airline, given what it has represented for Australians over the years. But the temperature of the feedback I got over the weekend was that people were done with it. They were done with it because they were no longer respected by that company and certainly that company, the reason they were not being respected was because the company had stopped respecting its workers. And right now when you look at it, it's a pretty grim state of affairs. It's about more than people having a shitty flying experience at the moment I think.

ELLE:

Rick, thank you so much for speaking with me today.

RICK:

Thank you Elle

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ELLE:

Also in the news today

NSW Treasurer Matt Kean has announced the NSW state budget, before the state heads to the polls in March next year.

Kean revealed the government would wind back the state’s reliance on stamp duty.

First homebuyers purchasing properties under $1.5m will be able to choose between paying stamp duty or an annual $400 property tax plus 0.3% of the property’s land value.

And, the trial of Brittany Higgins’ alleged rapist Bruce Lehrmann has been again delayed, after Television journalist Lisa Wilkinson referenced the case while accepting a Logie award for her work breaking the story.

ACT Chief Justice, Lucy McCallum has reluctantly delayed the trial which was due to start next week.

I’m Elle Marsh, this is 7am, see you later.