While Alan Joyce continues to bask in the glory of his Qantas farewell tour, all is not well at the airline’s Network Aviation subsidiary. With a growing number of pilots paid well below award wages, strike action may impact on FIFO workers and threaten mining profits. Michael Sainsbury reports.
Last Sunday, at a meeting in Perth, pilots belonging to the Australian Federation of Air Pilots (AFAP), which covers about 80% of the around 240 pilots at Network Aviation, agreed to proceed with an application for Protected Industrial Action (PIA).
That’s the same route that the division’s flight attendants plan to go down after a successful PIA vote was tallied last week, “much to the concern of management”, as one insider said. Both pilots and flight attendants are the worst paid in the Qantas Group, according to documents seen by MWM. They also miss out on rostering flexibility, optional time off and their staff perks, including basics such as meals, are down a rung from staff on the East coast.
MWM has learned that Network’s cabin crew, totalling about 300, could be on strike within a week.
Perth based Network Aviation started life as a mining charter specialist, catering to the countless thousands of fly-in-fly-out (FIFO) workers who operate Australia’s economic engine room, the iron ore mines of the Pilbara and their copper, zinc, nickel and lithium cousins. This remains its main business, but it is fast expanding into regular passenger services. It has taken over Qantas routes from Perth to Darwin, and insiders say plans to add flights from Perth to Adelaide and Hobart are well advanced.
A strike action has the capacity to severely upend Australia’s mining sector, as well as souring Alan Joyce’s farewell tour. Qantas’ resources are stretched, as one insider says, “to breaking point;” On any given day, a sick pilot or cabin crew member can throw the entire group into turmoil. Even staff now call it “Jetstar with a red tail,” – due to its ultra low-cost model.
Employee survey results
To add more angst to Alan’s victory lap, well certainly for his successor, the airline’s hapless finance chief Vanessa Hudson, a recent survey of Qantas’ Sydney International Base pilots distributed by Sydney International base manager Georgina Sutton, has excoriated management and the company’s once-famed culture. That’ll be one of the many issues for Hudson, to remedy.
With 41% participation, it found that “Employees do not feel like they are treated with respect at work” that they have a
Lack of comfort voicing ideas and opinions, and a belief that opinions and ideas cannot be shared openly or without fear of retaliation.
A whopping 74% found that “the employee experience” did not meet their expectations, indeed only 5% found that it did, 22% were neutral. The kicker, despite Joyce and his senior team’s famous “town hall” events, allegedly designed for exactly that, was the: “Lack of open and honest communication at the Qantas Group.”
Of course, rather than being chastened by the survey, Qantas cosseted white collar managers are angry because, after all, it’s all about them – rather than staff or customers.
This dire lack of communication extends to the company’s dealings with the media. MWM has asked about two male pilots who suddenly left the group in recent months, following two separate incidents in Bangalore, India that involved inappropriate behaviour with women – including a flight attendant. The Qantas chief spin doctor Luke Enright – whose official title is the rather grand Head of External Affairs – would neither confirm nor deny the events. He referred instead to “gossip and rumours” – rather than answering legitimate questions.
Private equity play
Seasoned observers of Alan’s strategy of running Qantas like a private equity play will know that this is catnip to the annual multi-millionaire: swap out Qantas mainline aircraft with Network planes, often repainted, ageing Jetstar A 320s, and slash costs by using pilots and cabin crew on significantly lower wages that those they have replaced. Slice and dice, divide and conquer.
The Network Aviation Pilots Enterprise Agreement 2016 expired in October 2020 and over the past seven years of operating under this agreement, Network Aviation has experienced substantial growth. The number of pilots and aircraft has more than doubled, alongside the addition of a new A320 fleet. This growth has not, however, been reflected in the pilot industrial space.
“Without a suitable agreement in place and with salaries frozen under the 2016 Agreement, Network pilots’ pay has decreased compared to the minimum Award equivalent. In 2022, approximately 62 pilots were paid below the minimum Award equivalent, with the majority experiencing a shortfall of around $7,200. This number increases every year a new enterprise agreement is delayed,” AFAP said in a summary note obtained by MWM.
The union noted in its latest counter-claim to Qantas that its Fokker 100 pilots saw a “drop of nearly 24% in effective salaries in the previous 15 years.”
“The striking disparity exists in the total remuneration received by Network Aviation pilots compared to their counterparts in Qantas Short Haul. It is estimated that Network Aviation pilots receive approximately 50% less in remuneration,” the AFAP claim noted. That’s half pay for flying Perth-Darwin on an A320 compared with a Qantas mainline flight on a near identical 737. Customers, of course, pay the same price.
AFAP pilot membership numbers have doubled in the last year at Network Aviation with pilots leaving the Qantas union the Australian International Pilots Union, whose president Tony Lucas has an office near the Qantas Industrial relations boss, and the Transport Workers Union, which has long had designs on broader representation of pilots. Some maintain dual membership due to insurance commitments.
One manager, when told of impending industrial action by NA flight attendants, said that she was “disappointed”. Not as disappointed as the flight attendants and pilots – arguably the hardest working crews in the entire groups – who are paid wages that have, at times, been under award.
The long goodbye
And so to Corporate Australia’s longest goodbye, which began back in February when Alan said that he would depart “before the end of 2023”. Then, on March 31 when Joyce held the COVID-delayed 100th anniversary bash for what is now, surely, the Limping Kangaroo replete with 1,200 guests and glittering hand picked entertainers, including Kylie Minogue.
This was the surest sign yet that Australia’s, nay the entire globe’s best, at least the best remunerated, airline CEO would finally pack it all in and retire to a comfy life in Australia’s boardrooms and arts organisations.
Since then, Alan’s adoring public has been drip fed, bit by bit. In April, after an exhaustive international search, the Qantas board star studded with people – well all but one – who have precisely nil experience in the airlines sector – came up with a short list of two people who sit in the airlines’ mahogany row in Mascot. Along with Hudson, there was Joyce’s long time bag carrier, Loyalty chief Olivia Wirth. Once Hudson’s victory was secured, she wasted no time shuffling the executive deck, promoting loyalists and leaving Wirth stewing in her old job. So much for the sisterhood.
Hudson’s ascension was announced on May 1, but with the proviso that Joyce would not actually leave until six months down the track in November. He needed this unusually long time because there were many parties to throw and attend, a house to sell, bumper results to announce and more cash to shovel out the door to shareholders. Instead of investing in his increasingly threadbare fleet and maintenance division. And you know, letting go of a sinecure that has earned him over $130 million over 15 years must be tough.
But now it is up to Hudson to start spending money to fix the company’s fleet, wrestle with increasingly restless, uppity unions? All threatening the airline’s hallowed share price – and the Qantas board’s sleepy compliance with management.
Qantas, under the stewardship of Alan Joyce, has become the textbook case of neo-liberal corporatism. The company became the largest ever recipient of public funding during Covid, yet its aggressive workplace relations and its brawls with the unions led to a cultural decline.
Even though the hard tactics were welcomed by business groups and investors, the decline in customer service and efficiency, along with the declining staff morale, led to an erosion in public confidence and damage to the famous brand.
That was compounded when the Federal Court twice found Qantas to have sacked workers illegally in a suit by the Transport Workers Union (TWU).
Qantas took its case to the High Court to appeal on grounds the Fair Work Act had not been interpreted properly.
Michael Sainsbury is a former China correspondent who has lived and worked across North, Southeast and South Asia for 11 years. Now based in regional Australia, he has more than 25 years’ experience writing about business, politics and human rights in Australia and the Indo-Pacific. He has worked for News Corp, Fairfax, Nikkei and a range of independent media outlets and has won multiple awards in Australia and Asia for his reporting. He is a fierce believer in the importance of independent media.