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 support a new labour agreement that ends nearly 18 months of negotiations. Around 83% of pilots represented by the rival unions backed the deal.
The new agreement delivers pay rises of up to 28% for eligible short‑haul pilots over the next three years.
Pilots were represented by two unions: the Virgin Independent Pilots Association (VIPA) and the Australian Federation of Air Pilots. Both groups were involved in the negotiations and the subsequent vote.
Yes. VIPA highlighted a job‑security clause that aims to help ensure pilot jobs remain in Australia and cannot be cannibalised by future airline acquisitions or outsourcing.
No. The pay deal was finalised without industrial action, unlike a recent and damaging dispute at Qantas involving several key unions.
Investors may be concerned the pay rises make it harder for Virgin to control costs as it repositions itself as a more upmarket competitor to Qantas. The deal narrows the pay gap with Qantas, which could increase operating costs for Virgin.
Virgin was the worst performer among Australia’s four largest airlines for on‑time performance last month while it bedded down a new reservations system: almost 30% of Virgin departures were late and about one in three arrivals was late.
Unlike Virgin’s settlement, Qantas recently experienced damaging industrial action with three key unions, including the long‑haul pilots' association. The Virgin deal closed the pay gap without strikes, while Qantas was the best punctuality performer in February.
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