Labour disputes and technical problems hit airlines

by Frank Leberecht

Problems in air traffic in late October in China and the world and have led to serious trouble for passengers.   While the Australian carrier  Qantas grounded its entire fleet due to a dispute between Qantas management and labor unions and left thousands of passengers stranded at international and Chinese airports, Chinese carrier China Southern  preliminary grounded its superjumbo Airbus A 380 due to technical problems less than two weeks after its maiden flight for the Chinese carrier. On its website, China Southern  announced that it was waiting for equipment from the European Airbus Corporation to fix the problem.

According to a report in the New York Times, the Qantas management said that the airline’s fleet of 108 aircraft in up to 22 countries would remain grounded until Qantas reached an agreement over pay and work conditions with the unions representing pilots, mechanics and ground staff. But it was also the A 380 itself that had forced Qantas to take measures to ensure passenger safety before. In a report in February 2011, Financial Times wrote that Airbus A 380 problems cost  Qantas Australian $ 80 million after the grounding of its A380 fleet due to engine problems on an A 380 in late 2010. Confronted with the current situation of halting all Qantas flights, Qantas CEO Alan Joyce estimated the osses for the airline at Uus $ 20 million a day, according to a the Sunday edition of South China Morning Post on 30 October.

International air traffic is widely assumed as key contributor to globalization since it brings people from all over the world together. Still, the industry is highly sensitive to international crisis events: due to so- called “exogenous shocks” like the events of 9/11/01 or the SARS-epidemic in China in the past, the airline industry also faced massive losses. “If you want to be a millionaire, start with a billion dollars and launch a new airline,” Virgin carrier CEO Richard Branson once put it.

However, the industry is highly desirable for a nation´s prestige creating such iconic design and technology products like the Boeing 747-Jumbo-Jet or the Airbus A380, the world´s biggest airplane. Boeing and Airbus are the major competitors in global civil airplane-production.

It was four years ago that China also entered the market and launched its first home-made passenger airliner in December 2007 described as a “milestone in the nation’s ambition to become a giant of the global aviation industry” according to a report in the “China Post”.

“The aviation industry is the embodiment of a nation’s level of science and technology, industry and overall national strength,” former Chinese Vice Premier Zeng Peiyan said at the launching ceremony of mid-range civil aviation ARJ-21 in 2007.