Virgin Australia agrees to 28% pilot pay rise

In stark contrast to the situation at Qantas, former Qantas executive GM John Borghetti, and VIPA, which covers the largest number of Virgin Australia pilots, have reached an enterprise agreement which provides for pay rises of up to 28%.

In a statement VIPA says:

VIPA the union representing Virgin Australia and V Australia pilots, has secured pay rises of up to 28% for its members at Virgin, with its first enterprise agreement.

The agreement took almost two years to negotiate and offers significant improvement over the current common law contracts members were under.

VIPA is the largest pilot union in the Virgin Australia group and the agreement is to be voted on by pilots over the next two weeks.

VIPA Executive Director Simon O’Hara said today that the union hoped the agreement was the beginning of a professional and collaborative approach with Virgin regarding industrial relations issues with pilots.

“VIPA acknowledges that this good result would not have occurred if not for the imprimatur of the CEO, Mr. John Borghetti. There is no doubt that Mr Borghetti’s arrival ushered in a new era of industrial relations within the Virgin Australia Group.”

“VIPA supports the new CEO and also his mature approach to organizational and cultural change.”

In addition to the pay rise, the agreement provides for a comprehensive system for consultation between management and pilots, the introduction of a credit system, the cornerstone of this agreement, that measures overtime and work performed, a new insurance system for pilots and back-pay pay rises from 1 July if the agreement is voted up.

“This document represents the framework for the future and as such it is critically important that we achieved good structure and robust processes to underpin the Industrial relationship moving forward,” Mr O’Hara said.

The deal doesn’t put Virgin Australia at a cost disadvantage to Qantas, where the pilots are seeking annual rises of 2.5% over the three year period of their as yet unresolved enterprise agreement, as it fills in some of the existing pay differentials between both carriers.

The ‘stark’ differences are in the relationship between the Virgin Australia management and its pilots and engineers, where CEO John Borghetti is committed to increasing the use of Australian based employees to the maximum possible level, while Qantas is determined to shift jobs and assets off-shore and rotate through Australia flight and cabin crew paid under the terms and conditions of the labor laws of which ever country its foreign entities are based.

Qantas has previously said it will announce cuts to its Qantas international operations and more details concerning a proposed Asia based full service carrier and new transfers of business to international alliances on August 24.

It has refused to negotiate a guarantee sought by its pilot union AIPA, under which Qantas aircraft would always be flown by Australian based and trained flight crew, on the grounds that this would be a veto against change and innovation.

Earlier this week AIPA President, Captain Barry Jackson, told its annual dinner that Qantas regarded its experienced pilots as ‘inconvenient heroes’ in relation to recent in-flight crises involving the engine disintegration on an A380 near Singapore last November, and earlier incidents involving a temporarily out of control A330 that made an emergency landing at Learmonth, and the damaging decompression of a Boeing 747-400 prior to an emergency landing in Manila.

Jackson said the management of Qantas had destroyed in a few short years the brand value of the airline through mediocre decisions and a policy of denigrating and marginalising its pilots and maintenance engineers as being too expensively excellent for the cost cutting short term mentality that was evident at the board and executive level.

There was, he said, a lack of respect for the standards that had made Qantas a leader in aviation, and a determination to eliminate those advantages for the lesser requirements involved in meeting so-called  world’s best practice when the Australian practices of Qantas had been superior.

He told the annual dinner of AIPA that the tradition of 90 years of excellence at Qantas deserved better than to be destroyed by a management that had failed to engage with its employees, or to grasp the importance of continuing the highest standards of pilot training and engineering excellence.

Jackson said AIPA was firmly committed to avoiding inconveniencing Qantas passengers through industrial action but would take important initiatives after the August 24 announcements to protect and save the meaning of Qantas to Australian travellers.

The developments at Virgin Australia are expected to strengthen AIPA in the further pursuit of a guarantee that Qantas remain genuinely Australian, instead of a sham branding exercise like the Qantas painted Jetconnect trans Tasman 737 services, or the various efforts Jetstar has made to pay pilots New Zealand wages for flying in Australia or hang Thai cabin crew off the end of 20 hour shifts to work domestic sectors in this country.