AFAP Virgin Pilot Federation Committee Update
Qatar Airways and Virgin Australia Wet Lease Flying
Following the announcement that Qatar Airways (Qatar) are seeking approval to take a 25% stake in Virgin Australia and to commence daily scheduled return services between Brisbane, Melbourne, Perth and Sydney and Doha under a wet lease arrangement, the AFAP requested to meet with the Virgin CEO and COO.
On 24 October, the AFAP represented by Steve Hungerford (VPF Chair) along with Senior Legal/ Industrial Officers Patrick Larkins and Deanna Cain met with Jayne Hrdlicka (Chief Executive Officer), Stuart Aggs (Chief Operations Officer), Alex Scamps (General Manager, Flight Operations and Chief Pilot) and Jo Glynn (General Manager, Workplace Relations).
Subsequently Virgin suggested a further meeting with the CEO, COO and the extended VPF Committee on Friday 8 November (and all but 3 of our 15 Committee members were able to attend). To facilitate this meeting, the AFAP requested an extension from the ACCC from 7 to 11 November for submissions, which was granted.
We wanted to take a pragmatic approach to the Qatar announcement and meet with Virgin prior to making more specific comment publicly and submissions to relevant government bodies.
In both meetings with the CEO, the AFAP made our position clear that our primary goal was career opportunities for Virgin Australia pilots based in Australia. As part of the discussions with the CEO we shared our concern that the wet lease was open ended, and a foreign operator could utilise Australian air rights indefinitely.
Virgin has engaged with the AFAP constructively and stated that it shares the goal of VA operating international flying on its own metal and with its own crew. Virgin advised the wet lease is the only mechanism through which the re-introduction of long haul flying by Virgin Australia is possible.
AFAP Position
The AFAP acknowledge the likelihood of Virgin Australia (Bain) making the capital investment to introduce a wide body fleet as extremely low. As Virgin does not currently operate wide body flying (or have any orders with manufacturers), access to a new fleet would be on a significant lead time (Virgin advised 5 years), whereas Qatar has access to a significant order book of wide body aircraft.
The Virgin Australia proposed wet lease of Qatar Airways is vastly different to the Qantas Airways wet lease of Finnair A330 aircraft for 2.5 years, followed by a dry lease of up to 3 years. Qantas is wet leasing its existing international routes (SYD-SIN and SYD-BKK) because it had insufficient aircraft to operate the wet leased services. In contrast, the proposed Virgin/Qantar wet lease is to operate new daily services from Sydney, Melbourne, Brisbane and Perth to Doha, which adds capacity to the market.
We also acknowledge the flow on benefits from the expected passenger feeds from Virgin’s new international services which is likely to result in additional domestic services to meet this new demand and thus create Virgin Australia domestic pilot opportunities.
Overall, the AFAP supports the Qatar investment and sees the wet lease as the first credible pathway to the reintroduction of long haul international flying into Virgin Australia operated by VA pilots.
However, we cannot support the use of a wet lease arrangement to access unused Australian air rights that is open ended. We also see the purpose of the wet lease is to start up a new international operation and then to transition to a dry lease after a defined period.
The AFAP position is we support the wet lease arrangement subject to a condition that by the end of 3 years from the commencement of the wet lease flying (“3 year period”) Virgin Australia will confirm its intention to either:
- commit to transition to a dry lease arrangement by the completion of the 5 year period; or
- cease the wet lease flying at the end of the 3 year period.
Effectively Virgin would have 3 years to determine if the flying is commercially viable and a further 2 years to transition to a dry lease with flights operated by Virgin Australia pilots by the end of 5 years.
A copy of our ACCC submission is available here.
Secondments
As Virgin has already foreshadowed the long haul joint venture is expected to create secondment opportunities with Qatar based overseas. Virgin advised that the details of the secondment terms and conditions and total number of pilots that will have access to these secondment opportunities have not yet been finalised, however it is not expected to be significant numbers due to Virgin having limited capacity to release pilots from performing VAA flying.
Further consultation will occur, however Virgin has indicated that the Etihad secondment arrangements from 2014 will be the starting point. This allowed pilots to take a fixed period of Leave Without Pay (LWOP) to be employed with Etihad and then return to Virgin Australia without impacting a pilots GDOJ.
The Qatar secondments will create movement and promotional opportunities within VAA as these positions will need to be backfilled.
Questions
Should you have any questions regarding the above, please feel free to contact your AFAP representatives directly, or AFAP legal industrial team of Senior Legal/ Industrial Officer Patrick Larkins (patrick@afap.org.au) or AFAP Senior Legal/ Industrial Officer Deanna Cain (deanna@afap.org.au) at the AFAP dedicated AIC email address virginaic@afap.org.au, or alternatively by posting on the VPF Forum (https://afapvpf.discussioncommunity.com/) or by calling the AFAP office on (03) 9928 5737.
Regards,
First Officer Mick McGinnis – AFAP Vice-President Administration & Finance
First Officer Steve Hungerford – VPF Chair
Captain Brad Wilson – VPF Vice-Chair