Virgin pilots see more jobs from Qatar deal: ACCC

The union representing Virgin pilots has come out in favour of Qatar buying a stake in their airline, telling the competition regulator job benefits outweigh any risks.

Virgin Australia CEO Jayne Hrdlicka. Picture: Supplied

Virgin Australia pilots believe the proposed part-takeover of their airline by Qatar Airways will lead to more jobs and better career development, according to their union’s submission to the Australian Competition & Consumer Commission.

Doha-based Qatar has proposed that as part of its deal to take a 25 per cent equity stake in Virgin, it will also sign a “wet lease” agreement with the Australian carrier that allows it to dramatically ramp up flights between the two countries. The arrangements Virgin customers booking tickets to Europe would be on Qatar aircraft flown and serviced by Qatar crew.

The Australian Federation of Airline Pilots president Ben Bollen said as long as there was a hard cut-off of five years for the wet lease arrangement, with a commitment at three years on either continuing or ending flights to Doha, the deal would be a positive for the 800 Virgin pilots it represents.

“Without this deal, Virgin would struggle to compete internationally, limiting career advancement and job security,” said Captain Bollen. “By leveraging Qatar Airways’ resources and expertise, Virgin can grow its operations more rapidly, eventually leading to greater demand for Australian pilots as the airline scales up its fleet and operations. The option for pilots to be seconded to Qatar Airways also presents a valuable opportunity for professional development.”

Australia’s dominant airline Qantas has made its own submission about the Qatar deal, saying that the wet lease arrangement could allow Virgin to “permanently use Qatari labour at the expense of Australian jobs,” unless limits were set.

Virgin pilots believe the proposed part-takeover of their airline by Qatar Airways will lead to more jobs and better career development. Picture: Kendall Hill/Getty Images

Qantas faces an uphill battle, convincing the competition regulator of its genuine concern over Australian jobs.

The airline faces a $100m-plus fine for illegally firing 1700 baggage handlers and has cut its staff numbers by a quarter in the past decade, to 25,426, according to its full year 2023 numbers.

In addition, Qantas also uses a wet lease arrangement with Finnair on certain flights to Europe via Asia, and has previously had wet lease arrangements with airlines such as China Eastern. It also has a long-standing profit sharing arrangement with one of the world’s biggest airlines Emirates on flights via Dubai and flies many of its passengers on Emirates metal with Emirates-employed Dubai-based staff.

Still, Qantas pointed out in its submission that “the proposed wet lease enables Virgin Australia to schedule services crewed entirely with Qatari pilots and crew, whose pay and conditions are substantially less than Australian-based crew.”

“Given the Proposed Conduct is going to occur through a wet lease, its potential to impact competition in the sector over the long term should be assessed,” said Qantas chief executive of international and freight, Cam Wallace.

In fact, for Qantas on a domestic and international front, it’s arguable that things have ever been better. The airline has just posted its biggest and second-biggest profits on record after enjoying record high airfares and at times a seemingly skeleton crew of employees.

Qantas has enjoyed increased dominance of the domestic aviation sector since Virgin collapsed in 2020 and returned under new owner Bain Capital with a smaller portion of the high-yielding corporate market.

Both Qantas and Virgin have also profited from the demise of domestic regional carrier Rex, with airfares rising on average around 13 per cent since its demise

In the international market, the Flying Kangaroo has benefited from the global shortage of aircraft, which has hampered the return to Australia of many international carriers, along with the continued strong demand since the end of lock-downs, particularly in the higher yielding premium cabins.

Qatar looms as a significant threat. The airline was voted “world’s best airline,” by Skytrax – considered the “Oscars” of the airline industry, for 2024, for the eighth time and its business class is often voted the best in the world by category.

The airline already flies to Australia, but the Albanese government rejected the Qatari government’s request for increased services in 2023, citing a range of different reasons, including that Qantas had just ordered new aircraft.

Australians were furious at the government’s decision to protect Qantas in the face of its record high airfares, bungled customer service, and its illegal firing of staff.

In his ACCC submission, Captain Bollen said the proposed Qatar deal will allow Virgin to return to international flying, and give existing Virgin pilots the opportunity to be seconded to Qatar, which in turn would free up opportunities for Virgin to employ new pilots in Australia.

“We urge the ACCC to consider the benefits this deal brings to the Australian aviation market, the economy, and the opportunities it presents to the workforce while incorporating the necessary safeguards to ensure the long term sustainability of Australian based airline operations and delivering jobs for Virgin Australia pilots,” said Captain Bollen.