Virgin seals short-haul pilot pay deal
Their endorsement brings an end to almost 18 months of protracted negotiations between the pilots and Virgin, and respite from a power struggle between two unions competing for members.
The pay rise will help close the gap between Virgin pilots and their counterparts at Qantas. The deal was completed without industrial action, in contrast to the damaging battle between Qantas and three of its key unions including the long-haul pilots' association.
But it raises concerns for investors about Virgin's ability to keep costs under control as the airline reinvents itself as an upmarket competitor to Qantas.
About 83 per cent of the Virgin pilots represented by the two rival unions - the Virgin Independent Pilots Association and the Australian Federation of Air Pilots - voted in favour of the new agreement.
VIPA executive director Simon O'Hara said the job-security clause for pilots would "help ensure their jobs stay in Australia and cannot be cannibalised by future airline acquisitions or other outsourcing". "This is exactly the sort of clause Qantas Group has been refusing to offer its pilots," he said.
In the years after its launch in 2000, Virgin benefited from unions giving it more latitude than Qantas because of its position as a challenger. But more recently, the unions have become focused on closing the gap in pay and other entitlements with Qantas.
A Virgin spokeswoman said the airline wanted to "provide a fair and competitive contract that values the contributions of our pilot group ... and we are really pleased with the positive result".
Meanwhile, Virgin was the worst performer among Australia's four largest airlines for planes arriving or departing on time last month, as it beds down a new reservations system. Almost 30 per cent of Virgin planes were late departing, while one in three of its aircraft was late arriving.
Qantas was the best performer in February.
Frequently Asked Questions about this Article…
About 1,000 short‑haul pilots at Virgin Australia voted to accept a new labour agreement that will deliver pay rises of up to 28% over the next three years.
Around 83% of Virgin pilots represented by two rival unions — the Virgin Independent Pilots Association (VIPA) and the Australian Federation of Air Pilots (AFAP) — voted in favour of the new agreement.
No. The agreement was completed without industrial action, ending almost 18 months of protracted negotiations between the pilots and Virgin.
The pay rise is intended to help close the gap between Virgin pilots and their counterparts at Qantas. For everyday investors, that raises questions about Virgin's ability to control costs as it repositions itself as a more upmarket competitor to Qantas.
VIPA executive director Simon O'Hara said the agreement includes a job‑security clause designed to help ensure pilot jobs stay in Australia and cannot be cannibalised by future airline acquisitions or outsourcing.
After Virgin's launch in 2000 unions initially gave it more latitude because it was a challenger. More recently unions have focused on closing pay and entitlements gaps with Qantas, which contributed to tougher bargaining and the current pay outcomes — a factor investors should watch when assessing wage pressure.
Virgin was the worst performer among Australia’s four largest airlines for on‑time arrivals and departures last month while bedding down a new reservations system: almost 30% of Virgin planes were late departing and about one in three were late arriving. Operational disruption like this can be a concern for investors.
In February, Qantas was the best performer among the four largest Australian airlines for on‑time arrivals and departures, in contrast to Virgin's poorer punctuality while it implemented a new reservations system.
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