Qantas

A brief note from QPC Chair Captain Mike Egan:

It has been brought to my attention that there is another Qantas Captain that shares the same name as me, and some members have mistaken the two of us. Please be aware that my views of the SH EA are aligned with the QPC as outlined in recent updates, including this one.

Qantas Short Haul EA Update No. 7

As you all would be aware, the AIPA negotiating team and the Company reached an in principle agreement on the SHEA a few weeks ago. In our previous update we gave a preliminary breakdown of the various items contained in the proposed agreement.

Overall, the Company’s EA offer falls significantly short of what the QPC believes is necessary for our endorsement. It goes without saying that Qantas can choose to present the proposal to pilots for a vote with or without the endorsement of either the AFAP or AIPA, however, we do not believe this is a productive way of engaging with pilots, nor do we believe it will bear fruit.

As previous EA negotiations have shown, the threat of this approach has generally resulted in distrust of the Company and a disengaged pilot group.

Qantas SH Webinar

While we have been busy working through a more detailed analysis of what has been agreed to between the Company and the AIPA negotiating team, we tuned in last week for the Company’s SH EA webinar.

Overall, the Company stated that the structural changes included in the EA offer would result in an immediate ~8.5% pay increase, and with the rest of the package, a 20% total increase in remuneration over 5 years, or approximately 4% per annum.

We ascertained several of the Company’s assumptions and costings from this webinar and have doubts about the value EA offer considering the significance of the concessions the offer contains, and the ability for the Company to negate the remuneration gains proposed in the structural changes.

The primary assumption flagged in analysing the Company’s figures was that rostering practices, pattern builds, day of ops procedures and standbys were assumed largely unchanged. Calculations were made retrospectively on published rosters and actual flown lines, with pilots being encouraged to apply the structural changes to previous rosters to make their own calculations.

However, on being challenged about trust and the possibility of these practices being changed to minimise any remuneration gains for the pilots, the Company could not, and did not, offer guarantees for their calculated pay increases.

While the Company suggested in their analysis that the structural changes were worth approximately 80-88 hours per annum (if flying ~950 hours per year), as above, we note again that the structural changes are not guaranteed to result in the remuneration increases the Company have suggested, as they are based on systems the Company can change at any time.

DPC60 remains a positive structural change for pilots in addition to guaranteed remuneration. In their analysis, the Company stated DPC60 is worth approximately 12 hours per annum, or ~1.3% on 950 hours a year when applied retrospectively to rosters. Again, this figure could be lower as rostering practices change.

We also view the valuation of ADC as unrealistic. A quick analysis of regional international flying gives an insight into just how few slip lengths hit the 30 hour threshold. Medium range regional international narrow body flying is most likely to generate increased frequency and thus lower average slip times that do not attract ADC. The FRMS is unlikely to require slip lengths of 30 hours or more for A321XLR range flying. Therefore we do not view ADC as a tangible remuneration benefit, but rather as a necessary protection against inefficient duties.

Summary

It should be emphasised again that the ~8.5% initial pay increase is not guaranteed. We believe if the Company is genuinely willing to provide these remuneration increases, they should guarantee them. We note the Company’s analysis of LHEA 9 and the 787 flying and rosters as a prime example of why pilots should be cautious and critical when accepting the figures the Company produce when analysing and projecting benefits.

As we have outlined previously, the most effective way for pilots to guarantee pay rises for the same amount of flying hours is through pay rate increases. While we welcome structural changes that protect pilots like DPC60, PCG and paid reserve, we remain highly skeptical about the increased pay these functions will actually deliver to pilots.

Given the lack of guarantees around the remuneration increases derived from structural changes, the exceptionally high inflation in Australia over the past 2 years, the on-going elevated inflation, the considerable concessions made in the SH variation, the two year wage freeze and the sacrifices made during the pandemic, we do not believe any of the concessions contained in this in principle agreement have sufficiently been accounted for.

We are committed to negotiating an outcome that is fair for all, and we believe the transparency and ease of accounting for EA offsets sought by the Company via a log of claims remains the best approach when dealing with Qantas and their unchanged IR approach.

A note on the ‘EA cycle’

The Qantas wages policy was established in a considerably low-inflation environment, when Qantas was in the immediate Covid recovery stage. When challenged on why pilots were being penalised with a wage freeze after over 2 years’ worth of exceptionally high inflation, Chief People Officer Catherine Walsh advised that it was due to where SH pilots sat within the ‘EA cycle’.

Interestingly, consumers have been paying elevated prices as a result of cost base and wage increases for some time, regardless of where various employee groups are in the Qantas EA cycle.

We do not view this internal Qantas EA cycle concept as relevant in negotiations. As such we view it as an excuse to further erode SH pilots’ incomes by extending the gap between consumer prices and wage costs. It is again worth noting that data indicates growing corporate profits have dramatically fueled inflation in Australia.

We will continue to analyse the Company SH EA information to provide you with a balanced view and enable you to make informed decisions regarding the Company’s EA offer.

Regards,

AFAP Qantas Pilot Council

Michael Egan - Chair
Mark Gilmour - Vice- Chair
Daniel Kobeleff - Secretary
Michael Armessen - Committee Member