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PRIME MINISTER
FOR MEDIA 13 SEPTEMBER 1989
The Australian economy is facin g an exceptionally
serious challenge it is a situation of national
emergency. The Government, the airlines and the
responsible union movement are meeting this in the only
way possible.
The challenge arises because the Australian Federation
of Air Pilots ( AFAP') refuses to negotiate within the
wage fixing guidelines. They have repeatedly stated
that they seek a resolution of their demands outside the
guidelines and the umbrella of the Industrial Relations
Commission. Such a stance has frustrated continued
attempts by the airlines to negotiate wage increases.
The AFAP has been planning for " battle" since early this
year, as revealed in circulars to members urging
preparation for a significant " non-income period" or
NIP. The AFAP has adopted the contradictory position of
wanting to be treated as business executives, but at the
same time using monopoly power to hold a gun at the head
of the airlines and the Australian people.
The Federation repeats parrot-fashion a willingness to
negotiate. The Opposition Leader, Mr Peacock, suggests
government intervention to arrange talks between the
airlines and the AFAP.
The truth is that these are completely empty gestures,
devoid of sincerity and sense. They fail completely to
understand the essence of the challenge faced by the
Australian people.
For the airlines to negotiate outside the wage fixing
guidelines would, in itself, destroy the wages system
and extensively damage the Australian economy. To sit
down and talk with a union only wanting wage increases
outside the guidelines and the scrutiny of the
Industrial Relations Commission would bring grave
consequences this Government is determined to avoid. 17 83* h
Wage increases outside the wage guidelines for AFAP
pilots would see a wage explosion, even worse than 1982,
with the inevitable consequence of inflation and
unemployment out of control, and with all the human
suffering and economic damage that involves.
Explosive wage increases would take away all the
opportunities for the future which the restraint and
responsibility of the Australian workforce and
Australian people have made possible over the past six
years. They would push up interest rates, destroy company
profits, push up unemployment and so destroy the
progress Australia is currently making through record
investment and employment growth to rebuild the
economy's capacity.
The key to Australia's future represented by the
tremendous co-operative achievement of unions, business
and Government in restructuring the Australian
industrial award system now at the very threshold of
success would be totally nullified.
A general pay grab by those able to get it would come
from the pockets of wage earners not able or willing to
adopt standover tactics, and from the pockets of
pensioners and other social security beneficiaries not
able to protect themselves in an economic free for all.
There can be no doubt that, substantial as they are, the
costs of resisting the Federation's demands pale into
insignificance beside the absolutely unacceptable costs
of giving in to them.
Following AFAP inspired resignations we find ourselves
in a situation in which the relationship between the
pilots and the airlines has been severed. The airlines
need to rebuild their operational capacity. This will
take time and so a national effort is required to cope
with the immediate consequences of the pilots'
resignations. This is of paramount importance in containing the damage
done. The airlines, the Government and the responsible
unions are doing everything in their power to have the
maximum number of planes flying as soon as possible.
Committing substantial resources to achieving this
objective is the best way the Government can assist
those sectors of the economy suffering as a result of
the damage done to the operational capacity of our
domestic airline industry. The Government is, of
course, particularly concerned about the impact on our
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tourist industry and is convinced that the only
effective way to alleviate its plight is to provide as
great as possible a level of service.
The airlines have taken three broad steps towards this
rebuilding exercise.
First, they have sought to rehire those who have
resigned. Contracts have been offered with conditions
within wage fixing guidelines, containing productivityrelated
wage increases. Some former pilots, including
some who earlier resigned and who were not management
pilots, have signed up. They will allow Ansett and
Australian increasingly to fly their own aircraft. This
process, however, must and will be handled with care.
Given the delicacy of the issue, and scheduling needs, a
critical mass of pilots is needed before all pilots who
have signed contracts can begin active duty.
Second, attempts have been made to hire new pilots.
Advertisements have been placed in Australian and
overseas newspapers, and recruitment offices have been
staffed in London and Los Angeles. The response has so
far been good, and can only increase once it is clearly
understood that long term career opportunities are being
offered. Third, the airlines are bringing in overseas chartered
aircraft and crews so that they can sustain operations
in the shorter term. This operation has inevitably
begun slowly as CAA processes are faced with
unprecedented demands. Because the Government and the
airlines do not intend to prejudice safety standards in
any way, the process of adapting to these demands is
inevitably slow to begin with.
These steps, after a necessarily gradual start, will see
an acceleration in the growth of available capacity.
They both cater for immediate needs and allow for the
complete rebuilding of airline capacity even if no
further pilots who resigned wish to return to work.
Of course, the most desirable path is for those who have
resigned both to consider those industries severely
damaged by the actions of the AFAP and their own futures
carefully. In the interests of all Australians I appeal
to all pilots to sign on for work. But I must emphasise
the rebuilding task will go on: the only question for
individual pilots is whether it goes on with them or
without them.
The Government is assisting in every way it can.
The airlines are not able to stand down staff because 17
this would undermine their ability to rebuild
operational capacity. It is simply industrial reality
that mass standowns will jeopardise the co-operation of
other unions in the effort to -rebuild flight capacity.
This places an intolerable strain on the financial
resources of the airlines, one that would not apply in a
usual industrial dispute where mass standowns could be
contemplated. In recognition of the importance of
providing the highest level of service immediately, of
facilitating as smooth a rebuilding of airline
operations as possible, and of avoiding the dissipation
of a highly skilled workforce, building on the agreement
between the ACTU and the airlines and the treatment of
staff affected by the dispute, the Government has agreed
to forego CAA and FAC charges normally payable by the
airlines equal to the cost of retaining staff on their
payrolls in accordance with that agreement. Such staff
will be required to take appropriate leave and be
willing to transfer to other jobs.
I wish to make it absolutely clear that my Government is
not compensating the airlines for other losses or for
revenues or profits lost as a result of the pilots'
actions. The airlines losses are running at around
per week before considering the wages of those normally
stood down. They are bearing these costs themselves in
the belief that they cannot afford the demands of the
greedy AFAP.
My Government regards these arrangements as essential to
place the airlines on a similar footing to other
affected industries such as the tourism industry which
have the freedom to stand down staff not able to be
gainfully employed.
I recognise that such an arrangement is unprecedented,
in the life of my* Government, but so are present
circumstances. Here we have a small group challenging
the very health of the Australian economy by insisting
on using its monopoly power to negotiate outside the
wage guidelines. This, plus the mass resignations that
require the airlines to rebuild, calls for unique
responses. More directly, the Government has made available RAAF
aircraft. The RAAF has deservedly attracted widespread
praise for the excellent service it has provided in
extremely difficult circumstances. Since the RAAF
started carrying domestic passengers on 25 August, it
has carried a total of nearly 33,000 passengers. The
RAAF has been operating up to 12 planes at a time,
including Boeing 707, C130 Hercules and HS748 aircraft.
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The RAAF is providing services to cities and. towns in
many parts of Australia including Hobart and Launceston,
Perth, Darwin and Alice Springs, Cairns, Townsville,
Brisbane, Sydney and Melbourne. It has also run special
flights to pick up people stranded at places like
Norfolk Island.
In addition, the VIP fleet is undertaking the carriage
of Australians from a wide variety of centres, and in
particular has been used in special humanitarian cases.
The Minister for Defence is examining ways of making
more aircrews available to increase the level of
utilisation of RAAF aircraft.
The Government has lifted restrictions on the operations
of foreign airlines and encouraged them to extend their
services to domestic travellers. Interlining carrying
international travellers on the domestic portion of
their trip has also been opened to foreign airlines.
Over the last few days9, my Government has introduced
further measures in redoubled efforts to contain the
damage caused by the pilots' actions. We have
established a Ministerial committee to supervise the
Government response and oversight longer term
contingency planning. Mr Willis will chair the
committee on which Mr Beazley and Mr Morris will serve.
I will participate as necessary.
A committee of officials chaired by the Secretary of my
Department, and including the Secretaries of the
Departments of the other Ministers on the committee and
the Acting Chief Executive of the CAA, has been
established to support the Ministerial Committee.
Both these committees will be reporting directly to me.
Under the umbrella of the officials' committee,
arrangements have been set in place to fast track
responses on problems relating to Government regulation
or necessary support.
My Government believes this commitment of our resources
is fully justified by the serious, national implications
of the present exceptional situation.
The airlines have been providing the public with a
skeleton service over the last few weeks, in particular
utilising leased space on RAAF aircraft and
international services.
From this point on, there will be an increasing
utilisation both of aircraft owned by the airlines 17 87
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themselves and aircraft leased by the airlines from
overseas, including crews.
Australian has a 727 operating Melbourne-Sydney-Brisbane
today. Ansett has a 737 operating Melbourne-Sydney-
Melbourne. With the addition of these aircraft to the
airlines' services, 20% of normal Australia-wide demand
some 5,500 seats were made available today.
From next week, when the American West aircraft become
fully operational that figure will rise to 25% of normal
demand. Over the subsequent fortnight, additional aircraft
including many leased from overseas will come into
operation on domestic routes. These include six new
leases arranged in the last 48 hours from the UK and
Europe. As a result, by the end of the month capacity sufficient
to meet 50% of normal demand will be available ( i. e.
some 15,900 seats). The airlines are today releasing
details in support of these estimates.
This substantial growth in capacity will allow the
airlines to boost training of new pilots, by allowing
them to upgrade their qualifications to meet appropriate
CAA standards.
This in turn will allow aircraft in Australian's and
Ansett's own fleets to return to service progressively.
The airlines have also been offered a substantial number
of full crews from overseas.
In summary in this dispute the Government is determined
to protect the national interest and the economic
welfare of all Australians. We therefore have no choice
but to resist the blackmail and the destructive tactics
of the AFAP, however long it takes.
We are determined that full domestic airline services
will be restored as soon as possible and yesterday's
Cabinet decision consolidated a process to ensure this.
Australian pilots must now decide whether this will take
place with or without them.
The Government would clearly prefer them to rejoin the
system and to negotiate new contracts with employers.
That way, they can gain reasonable increases in pay
based on improved productivity, and Australia can retain
their skills and experience.
But, if they continue to follow the greedy and
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destructive line of the Federation, they should be under
no illusion Australia's domestic airline industry will
in any event be fully restored and there will be no
place in it for them.
I repeat the Government has the absolute resolve and
capacity to protect Australia's national interests in
this dispute. 1789,