While sometimes there are rumblings from Australian pilots and their unions, the country’s two main airlines have had relatively good relations with their aviators for quite some time. In a neat piece of timing, on Friday, the Australian Federation of Air Pilots announced that Virgin Australia pilots had agreed to a new deal, but last Tuesday, Qantas pilots rejected their offering.

All smiles at Virgin Australia after a big week

The announcement that Qatar Airways wants to buy a minority stake in Virgin Australia was undoubtedly on the pilot’s minds when they overwhelmingly accepted the airline’s proposal. They and all Virgin Australia (VA) staff have been through the wringer over the last few years, with a double hit from COVID and the airline’s financial meltdown.

A Virgin Australia aircraft landing at Perth Airport

Photo: Wirestock Creators | Shutterstock

Hearing that positive news set the scene nicely, and after 15 months of complex negotiations, 75% of voting pilots voted to accept the new enterprise agreement. Out of the 1,176 VA Boeing 737 pilots eligible to vote, 1,152 voted, and 859 said yes to the new deal, which guarantees a 35% base salary increase in the first year, followed by 3% annual increases and other gains.

Virgin Australia Boeing 737-800 taking off.

Photo: Virgin Australia

The agreement also includes industry-leading lifestyle and fatigue protections and represents a significant step in securing the pilot group’s long-term financial and professional stability. Australian Federation of Air Pilots (AFAP) Executive Director Simon Lutton hailed the outcome as a significant achievement for Virgin Australia’s pilots, adding:

“This agreement is an excellent package that delivers significantly higher salaries and reinforces Virgin pilots’ standing with industry-leading conditions. After extensive and detailed negotiations, we are proud to have secured a deal that was strongly supported by pilots and will provide them with certainty for the next three years.”

Virgin Australia Boeing 737-800

Photo: Suparat Chairatprasert | Shutterstock

VA pilots rejected an initial offer from the airline in June this year, and Lutton said the new deal places the pilots in a better financial position than they were pre-pandemic and improves upon the lifestyle protections that set VA pilots apart from their competitors.

A far less cheerful outcome at Qantas

Apart from receiving a resounding no from the pilots, the situation at Qantas differed significantly as the proposed deal was not endorsed by the AFAP. This proposed agreement covers Qantas Short Haul pilots who voted on October 1, 2024, to reject the new offer from Qantas. Of the 786 pilots who voted, 63.4% rejected the deal.

Qantas Boeing 737

Photo: Seth Jaworski | Shutterstock

Qantas has now posted two years of profits of more than one billion dollars ($670 million), so with the latest offer including a two-year wage freeze, the proposal was never going to gain approval, which is why it did not gain the union’s backing before the vote. Speaking on this aspect, Lutton said:

“The AFAP did not endorse the proposed agreement based on the direct feedback from our members and our survey results. Qantas’ insistence on a two-year wage freeze despite being highly profitable while also seeking concessions on key conditions was viewed by pilots as unreasonable.”

This is a real test for Qantas Group CEO Vanessa Hudson and her team to see how they approach this rejection based on such a fundamental issue. If Qantas refuses to vary the proposed wage freeze, she will be criticized for not learning from the combative approach of former CEO Alan Joyce, and if the airline capitulates, it will cost shareholders money and appear to be overly accommodating.

Qantas Boeing 737

Photo: John Mackintosh/Shutterstock

The union said that if Qantas chooses to ignore the vote outcome, the negotiation “could escalate,” but if the airline works with the AFAP in good faith, the union believes a successful outcome is possible. The union recognized that the proposed deal included important improvements in conditions for pilots, but ultimately, these improvements were not enough to overcome the negativity of the proposed wage freeze.

Lutton added that the AFAP had already presented options and solutions to Qantas that would meet the pilot’s expectations and that the two parties “are not that far apart.” That does seem a little strange given that a wage freeze is, at this stage, a deal breaker for both sides, but time will tell where the cards ultimately fall.

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