Qantas reaches agreement with pilots over Project Sunrise

written by Adam Thorn | March 30, 2020

Qantas and the Australian and International Pilots Association (AIPA) have reached an agreement that will allow its members to fly the new ‘Project Sunrise’ routes.

However, the airline appears to have confirmed earlier reports that its order for the 12 Airbus A350-1000s, necessary to travel non-stop from London and New York to Sydney, has been delayed until after the coronavirus situation abates.

The Sydney Morning Herald obtained an email from AIPA president Mark Sedgwick possibly hinting that the COVID-19 crisis, which has stood down two-thirds of Qantas staff, may have played a part.

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Sedgwick said, “This is an incredibly uncertain time for our members, with many stood down from flying on no pay, with no end in sight. When we return to flying, our expert pilots will be at the helm as part of Qantas’ ultra long-haul services.”

The vote brings to an end a bitter wrangle between the two camps, with the airline’s chief executive, Alan Joyce, threatening to bring in Chinese pilots to fly the planes if no deal could be struck.

Qantas chief pilot Captain Richard Tobiano announced the news in a memo to staff, which read, “Reaching an agreement… means that we have now met the flight operations component of the Project Sunrise business case.

“The extraordinary circumstances facing aviation has seen Airbus agree to extend the deadline on our decision to purchase the A350s so we can focus on navigating the coronavirus crisis.”

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Before the COVID-19 crisis, Qantas had a March deadline to place a multibillion-dollar order with Airbus for a new fleet of up to 12 A350-1000 jets to operate what would be the longest commercial flights in the world.

The carrier said it needed pilots to agree to a new pay deal, which included “productivity benefits” to make the Project Sunrise business case stack up before it could make the order.

On 20 February, Australian Aviation reported that Qantas chief executive Alan Joyce upped the stakes in his negotiation with staff, telling reporters there was “no shortage of pilots” ready to take on the assignment in an off-the-cuff remark.

Talking as he announced cuts to services to Asia, he said, “I’ve had the letter from a captain from China Southern who says he’s been laid off in recent issues there, and he can get hundreds of captains from China and Asia to operate Project Sunrise if we want to.”

Previously, in a memo obtained by Reuters, Qantas International head Tino La Spina was reported as saying the airline would form a new lower-cost pilot group if needs be.

A Qantas Airbus A380 at Sydney airport. The airline will require A350-1000s to fly the new route (Rob Finlayson)

He said, “Airbus extended the delivery slots one last time once they knew they were the preferred supplier, but they are not willing to continue their exposure beyond that point.”

Last week, the Qantas Group secured a $1.05 billion loan to help the business during the current pandemic, which is secured against part of its fleet of unencumbered aircraft.

The loan has a tenure of up to 10 years at an interest rate of 2.75 per cent.

This funding increases Qantas’ available cash balance to $2.95 billion with an additional $1 billion undrawn facility remaining available.

The last Qantas international flights are due to stop flying in the coming days, and two-thirds of staff have been stood down.

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14 Comments

  • Steve A

    says:

    Really? To spend more than 4 year’s of QF profit on up to only 12 aircraft to fly only 5 return services per day for a maximum of just 475,000 people per annum for maybe $125 million potential profit. About time QF was re-nationalised and sanity was brought back to top management once again.

    • Jack Field

      says:

      May as well shut down the airline then. Because fact is aviation is a high capital low return business in general.

      • Bernhard

        says:

        I don’t think much of Joyce’s threat to use Chinese pilots. The sledgehammer approach means he also runs out of industrial goodwill all whilst he wants a ‘proportionate’ handout/bailout from the government in light of Virgin’s bailout/handout. Also it may well be that the larger carrying passenger craft-a380s, 747s, 777s will be more cost effective once the virus issue ends and companies realise that flying larger planes to less routes ensures survival rather than smaller planes to multiple routes-airlines have been talking a lot for a while about looming pilot shortages, well the use bigger planes to less destinations and save the expenses of keeping multiple ports going with smaller craft (in terms of Qantas and others international practices). In terms of Australia’s domestic though, after looking at costs and not over servicing various routes it will come down to sucking up the costs as necessary for the overall good that various regional routes provide in having a air service. The recent lending against assets Qantas has done will reinforce what I’ve said once interest rates rise and those loans need servicing.

    • john

      says:

      Qantas has a terrible reputation as being incredibly arrogant now. Look at teh way they look down at Jetstar staff for example.

      Nothing should be nationalised.

      We’ve gone from a recession before Corona with pilot shortage diminishing, to a massive recession, with a massive glut of pilots. Supply & demand dictates, that pay for working for an airline will drop.

      If we were to get another airline in Australia to replace Virgin or Qantas or both, pay rates would be much lower. Get used to the new world or stay on the dole.

  • Bill O'Really

    says:

    But Al is onto it, he is a saviour like on other. Just ask him. He could have got China Southern pilots, which of course is what every Australian really wants on the flights from New York to Sydney, Outstanding option, he has pilots from China just calling him up on his phone, ready to roll does Al. Cheap and cheerful with Saviour Joy Boy, all the way. What a guy.

    • Bob from Inglewood

      says:

      Guy? Interesting, I am sure he’d rather be a Yank “guy” than an Australian bloke.

  • Craigy

    says:

    @ Steve A Do you have a copy of the business case? Without it, your comments are worthless.

  • AgentGerko

    says:

    So Mr Joyce has stooped even lower, using a worldwide pandemic as a bargaining tool to force pilots into accepting a pay deal under possible threat of not being rehired. Well, Project Sunrise may proceed, assuming of course that Airbus can develop the A350 to handle those distances, which it cannot currently achieve, but you’ve still got to talk passengers into accepting cramped conditions for 19+ hrs.

    • john

      says:

      the recession was here way before the pandemic. Many didn’t like to admit it, but it was, so more about recession pricing of pilots.

  • PaulE

    says:

    When this is eventually over, we will be living in a very different world of aviation. There will be airlines that no longer exist and, possibly, many ‘top end of town’ executives will have adapted to the new norm of distance conferencing. Who knows? But certainly, now Qantas has, sadly, grounded its 747’s prematurely, there is a need for an aircraft larger than the 787-9 and with more range than the 787-10. My armchair guess is Project Sunrise will never leave the terminal but the A350-1000 will replace the 747’s on similar routes.

  • Michael Andrew

    says:

    The purchase of the A 350-1000 for project Sunrise is Joyce’s strategy to secure 100 plus 737 MAX aircraft at the right price, this after re certification of the MAX aircraft is complete. When Qantas was last nationalised it lost money and direction!

  • Jim

    says:

    Chinese Pilots, what a Joke. Why not just sell the airline to the Chinese, like everything else in this country. Nice government regulations we have here.

  • AlanH

    says:

    Project Sunrise? I just keeping asking myself why? What’s the rush and who wants/needs to be couped up in an aircraft for that length of time?

  • Ron Spencer

    says:

    Chinese pilots some of you commentators have never been on a China Southern plane or any other plane as there is thousands of Australian pilots out there working for the world airlines and some who want to come home

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