Qantas warns workers face cuts so airline can stay ahead

Qantas warns employees they’ll have to accept the same cuts as at Virgin so the airline can maintain its competitive advantage.

Chairman Richard Goyder and Qantas CEO Alan Joyce during the 2019 AGM in Adelaide. Picture: David Mariuz/AAP

Qantas CEO Alan Joyce has used the airline’s AGM to put unions on notice that he wants cheaper labour to compete with a post-­administration Virgin Australia.

Along with chairman Richard Goyder, Mr Joyce outlined the severe financial challenges facing the airline during the pandemic, with domestic capacity at just 30 per cent of pre-COVID levels and earnings down $100m in the first quarter of the 2021 financial year.

About 18,000 employees remained stood down, and 8400 had left or were expected to go as Qantas prepared to emerge from the pandemic as a much leaner airline.

Responding to questions from shareholders at the virtual meeting, Mr Joyce made the point that Virgin through its administration was able to terminate leases and contracts in order to drive down costs.

While Qantas did not have the same advantage, Mr Joyce said he would expect employees to be flexible on new work agreements.

“We’ve made it clear to the unions we can’t be disadvantaged in the process,” he aid.

“If there are concessions (made to Virgin), we will expect the same considerations to be given to Jetstar and Qantas because it’s really important we maintain our competitive advantage.”

Unions reacted angrily to the demand, pointing out the greater market share Qantas was expected to garner as a result of Virgin Australia’s shift to a “hybrid” airline.

Australian and International Pilots Association vice-president Shane Loney said they had only this year negotiated new short haul and long haul agreements, with the latter coming on “the back of threats to outsource our jobs”. “Qantas senior management seem to be using this as a Trojan horse to achieve their industrial agenda. It looks very much like trying to profit out of the pandemic,” said Captain Loney.

“There’s no certainty that the (30 to 40 per cent pay cuts) being talked about at Virgin will be achieved. To try to make it an issue for Qantas pilots is inappropriate.”

International division secretary of the Flight Attendants Association of Australia, Teri O’Toole, said with 18,000 Qantas workers still stood down, employees were costing the company very little.

“To take advantage of this crisis and try to drive down hard-fought wages and conditions permanently is not the Australian way of doing things,” said Ms O’Toole.

“There should be agreed ­temporary measures to allow aviation to recover without a complete destruction of entitlements across the industry.”

Australian Licensed Aircraft Engineers Association national secretary Steve Purvinas said his members would welcome Qantas and Jetstar matching their conditions to those at Virgin Australia.

He said life/work balance was their main priority in new work agreements with members likely to work a 36-hour week instead of 40 hours in exchange for 10 per cent less pay.

“We would enthusiastically enter discussions with Qantas,” Mr Purvinas said.

Mr Joyce also reprimanded unions for pursuing costly legal action throughout the pandemic, pointing out that in the past two years 66 cases had been brought against Qantas, of which only five were successful.

“Unfortunately it’s cost us $10m to defend those cases. A lot of cases we believe should never have been taken, so it’s not only wasting the members’ money, but our money in this crisis and we hope some sense will prevail,” he said. One of the five cases Qantas failed to win concerned the payment of the government’s $1500 a fortnight JobKeeper allowance.

Last month the Federal Court found the airline underpaid some workers after misinterpreting ATO guidelines.

Mr Joyce said they disagreed with the finding and expected their appeal to be heard by the full court of the Federal Court in the near future.

“We do think it’s wrong and we’re not the only ones,” he said.

“This will have a detrimental impact on a lot of businesses in Australia.”

Shareholders passed all resolutions put to the meeting, including the re-election of directors Maxine Brenner, Jacqueline Hey and Michael L’Estrange, Mr Joyce’s long-term incentive payment scheme and the remuneration report.

The meeting heard two directors, Barbara Ward and Paul Rayner would retire before the next AGM, and would not be replaced.

“(This means) the board will reduce by 20 per cent next year, from 10 members to eight,” said Mr Goyder.

“We consider this appropriate under the circumstances.”