The Qantas strategy to shift jobs and tax obligations offshore through Jetstar to Singapore and New Zealand is in disarray today after the low-cost subsidiary was forced to suspend flying by at least four of its cadet pilots on Australian services at New Zealand pay rates.

Jetstar took the cadets off salary but left them on allowances “pending operational clearance” after evidence its group CEO Bruce Buchanan gave to a public hearing of the Senate inquiry into pilot training and airline safety standards caused anger among pilots and direct complaints about its accuracy to members of the Rural Affairs and Transport Committee.

Buchanan has been recalled by the Senate inquiry to a hearing next Friday, March 18.

Under the Jetstar cadet scheme young pilots with prior flying experience entered into a contract with Jetstar New Zealand to be trained to take pilot positions with Jetstar, including flights in Australia. The savings to Jetstar, and the losses of revenue to the ATO, of Jetstar pilots flying in Australia under New Zealand labor conditions are substantial.

The Australian and International Pilots Association, which is in dispute with Qantas over its strategy of shifting pilot jobs overseas onto New Zealand and Singaporean terms and conditions, is understood to have recruited at least one of the cadets into its organisation on the grounds of industrial protection.

That cadet, a resident of Australia who has never taken up residence in New Zealand, was among four Jetstar cadets who have confirmed they were  flown to New Zealand by Jetstar for the purpose of opening a New Zealand bank account.

They are paid in New Zealand dollars at a large discount over similarly experienced Australian Jetstar pilots, for flying duties that have been exclusively performed in Australia.

After their three-day bank account opening exercise in New Zealand, which included “observing” Jetstar operations on several intra-New Zealand flights, the cadets at their own expense undertook seven weeks of endorsement training for Airbus jets in the UK, and then carried out line training with Jetstar in Australia.

The cadets have been suspended from flying duties and are receiving allowances but no salary “pending operational clearance”. It isn’t clear whether that clearance to fly in Australia will come from CASA or the New Zealand Civil Aviation Authority.

Jetconnect is a mock Qantas full service operation that flies trans-Tasman routes in Qantas livery with staff paid under New Zealand terms and conditions for work that used to performed by real Qantas employees.

Qantas has also transferred two Australian-registered, Jetstar-painted Airbus A330 jets to Singapore to perform Melbourne-Singapore and Auckland-Singapore flights under Singaporean labour contracts as a curtain raiser to the basing of a larger fleet of jets, including Boeing 787s, at Changi Airport.