Pilots at QantasLink have become the first major unionised cohort within the Qantas Group to accept a two-year wage freeze in light of the effect of the COVID pandemic on the industry.
According to the Australian Federation of Air Pilots, which negotiated the new enterprise agreement, the paperwork has been backdated to 2019, meaning the wage freeze period has now already passed.
As such, the 450 pilots involved will see as 2 per cent wage increase both in 2021 and 2022.
According to the union, over 90 per cent of participating QLink pilots at both Eastern Australia Airlines and Sunstate Australia Airlines voted in favour of the new enterprise agreement.
AFAP is also currently in negotiations with Qantas budget subsidiary Jetstar over its enterprise agreement with its pilots.
“The AFAP worked collaboratively with the company to conclude the enterprise bargaining discussions,” a spokesperson for the union said of the QantasLink agreement.
“We are pleased to have arrived at a pragmatic outcome for the QantasLink pilot groups.
“The AFAP’s Eastern and Sunstate pilot councils look forward to resuming negotiations towards the second half of next year in what we anticipate will be a better negotiating environment.”
The company will now lodge the necessary paperwork with the Fair Work Commission to seek agreement certification, at which point back payments should then be processed, the union said.
This process could take up to eight weeks.
It makes QantasLink pilots the first major group to negotiate and accept the wage freeze deal, since Qantas announced in May this year that it would introduce a two-year wage freeze on all new enterprise agreements across the Qantas Group, as it seeks to reduce its annual costs by $1 billion by FY23.
At that time, the flag carrier confirmed that its next round of enterprise agreements will include the two-year wage freeze, and stipulate a 2 per cent annual increase thereafter, down from 3 per cent before the COVID-19 pandemic.
“Managing costs remains a critical part of our recovery, especially given the revenue we’ve lost and the intensely competitive market we’re in,” chief executive Alan Joyce said in the ASX announcement.
At the time, trade union TWU’s national secretary Michael Kaine criticised Qantas’ decision to freeze wages and stunt future wage growth, in light of the fact that the airline welcomed over $2 billion in government bailouts since the beginning of the pandemic.
Kaine said that Qantas’ latest management decision sees the airline “acting like a dictator”, by “using public resources to shore up its position, cut jobs and impose unilateral decisions on its workforce”.
The TWU pointed out that in 2014, Qantas posted a $2.8 billion loss and imposed a similar two-year wage freeze on its workforce, from which the union believes Qantas workers’ earnings never recovered.
“There is a system of enterprise bargaining in place so that both sides can sit down and compromise,” Kaine said, adding that the wage freeze announcement “flies in the face of enterprise bargaining”.
“This year Qantas will have received $2 billion in federal government funding. On top of that the airline has wrung more public funding from state governments following recent announcements,” he said.
“We cannot see the benefit of this funding for the public when it continually results in job losses, outsourced workers and lower wages.”
It comes one month after Qantas announced it posted an underlying loss before tax of $1.83 billion, due to “diabolical” operating conditions and sudden border closures in the second half of the financial year.
This was despite the airline receiving over $1.1 billion in government aid through multiple financial aid programs, including $558 million in JobKeeper wage subsidies.
Qantas saw a staggering statutory loss before tax, which includes one-off costs such as redundancy payouts and aircraft writedowns, of $2.35 billion.
“This loss shows the impact that a full year of closed international borders and more than 330 days of domestic travel restrictions had on the national carrier,” Joyce said, adding that operating conditions have “frankly been diabolical”.
“It comes on top of the significant loss we reported last year and the travel restrictions we’ve seen in the past few months. By the end of this calendar year, it’s likely COVID will cost us more than $20 billion in revenue,” Joyce said.
The flag carrier introduced $650 million in permanent long-term cost reductions over the year, with the aim of reaching $1 billion in permanent annual savings by FY23.
Over 9,400 people have permanently left Qantas since the beginning of the pandemic, more than the 8,500 previously forecast by the airline.
According to Qantas, the additional staff losses were driven by offshore job losses at airports and sale offices, the introduction of some automation, and an increase in voluntary redundancies.
Over 8,500 employees currently remain stood down from their duties, 6,000 of which are tied to Qantas’ international operations.
“We have had to make a lot of big and difficult structural changes to deal with this crisis, and that phase is mostly behind us,” Joyce said.