Qantas Could Cancel Project Sunrise Amid Pilot Dispute

The much-touted Project Sunrise is not a fait accompli, warns Qantas CEO, Alan Joyce. He said this week that Qantas could cancel the project unless the pilots’ union agrees to a new enterprise bargaining agreement (EBA) and amended workplace employment conditions. Mr Joyce warns that the financial viability of Project Sunrise depends on a range of factors, including the pilots’ union coming to the party.

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The Qantas CEO has warned he could cancel Project Sunrise. Photo: Qantas.

A report by Robyn Ironside on The Australian yesterday, Thursday, October 3, 2019, quotes Alan Joyce as saying;

“We are hoping the have a good dialogue with them (the pilots union) but we can’t put an order in for a new aircraft unless we know the business case is going to meet the thresholds … It’s a very exciting project but it is not too big to fail and if we don’t have a business case we won’t do it because that’s what our shareholders expect.”

Project Sunrise

Project Sunrise is an ambitious plan by Qantas to operate ultra long-haul nonstop flights between the big Australian east coast capital city airports and far-flung destinations such as New York and London.

The idea was publically launched back in 2017, with the aim of starting the ultra-long-range nonstop flights by 2022. To that end, Qantas has long stated that it wanted to order the aircraft needed by the end of 2019. The aircraft reportedly in the running are the A350-1000ULR and the Boeing 777-8.

But Alan Joyce has long said he needed modifications to existing EBAs to make Project Sunrise work. And now Mr Joyce says he won’t go ahead with the aircraft order unless he gets that.

What is an enterprise bargaining agreement?

An EBA is an agreement that sets wage and working conditions. They are negotiated between individual businesses and trade unions who represent the employees. Once agreed upon, EBA’s are legally binding.

Following agreement, the EBAs go to the Australian Government’s Fair Work Commission for assessment and approval. EBAs are set for a finite period of time.

Qantas needed a new wage deal from the pilots union in 2015 in order to get its then new Boeing 787-9s ordered. Amongst other things, Qantas got a 30% productivity improvement from pilots in relation to the 787-9s. At the time, it also got new agreements from unions representing Qantas ground staff and engineers. Said a spokesperson for the pilots union in 2015;

“The brightest future for the vast majority of our members is provided by an airline that is positioned for sustainable growth.”

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Qantas needs its pilots to agree to new work conditions before it will order the aircraft for Project Sunrise. Photo: Qantas.

The 2015 agreements took some time to negotiate. Alan Joyce has always wanted to negotiate the agreements for Project Sunrise within a much shorter time frame, leading to friction with the unions. According to The Australian, the pilots union believes meeting Mr Joyce’s timeline will be “challenging.” 

The Australian and International Pilots Association

Qantas pilots are represented by the Australian and International Pilots Association (AIPA). The union is run by its 2,250 Qantas pilot members. AIPA has been generally supportive of Project Sunrise. But they have raised concerns about the length of the proposed flights and crew fatigue, citing safety as a paramount concern.

Video of the day:

AIPA wants to ensure crew onboard the flights are able to get plenty of rest. They also emphasize the need for contingency planning to deal with diversions, emergencies, and disruptions. AIPA is concerned about fatigue risk on a day to day basis as well as the long term cumulative impact on members. 

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Alan Joyce has a history of taking on the unions. Photo: Qantas.

But a former pilot yesterday described the Qantas negotiating style as unreasonable;

“Well, it would be done in a day if they didn’t come in with an unreasonable bunch of claims, whilst simultaneously disallowing everything from the pilots’ side. The consensus amongst the pilots is that we were lied to when the last EBA happened and that much of its outcome was based upon those lies. They aren’t all that keen to be caught again. 

Previous EBAs have been dragged out forever the company side. One classic was the period when the government rules said that the company had the attend these negotiations, but didn’t actually specify that they had to actually negotiate. That led to one company rep spending the meetings reading the newspapers. It’s worth noting that the short-haul EBA was recently, very decisively, voted down. It’s not about pay levels either. Take it or leave it isn’t a negotiation.”

Not out of character

Alan Joyce isn’t shy when it comes to taking on the unions. In 2012, he temporarily shut down the entire airline in order to bring recalcitrant unions to the table. He is also quite outspoken on a number of matters. This week’s veiled threats to cancel Project Sunrise are not entirely out of character.

Perhaps the last word on the matter should go to that former pilot. He had this to say yesterday about Project Sunrise;

“…. many of us believe the entire Sunrise project is nothing more than smoke and mirrors, to make various people think that AJ has an actual plan. From the very start, we’ve believed that he’d cancel Sunrise, and blame the pilots, even though it was probably a poor idea to start with. Quite honestly, if it’s not viable unless the pilots fly it for free, then it’s not actually viable at all.”

Simple Flying has approached Qantas for a comment on the matter. They have yet to respond.

What are your thoughts on Project Sunrise? Leave a comment.

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Jwuff

Pilots wages might be 2% of the cost of the business case at worst. So another 10% more efficiency would reduce costs by 0.2%. The conundrum is that if pilots are silly enough to believe that a 0.2% reduction makes the business case viable then they aren’t smart enough to fly the planes.

Ovtraveller

If the business case depends upon the reaction of the pax ( as a load factor) look at the Melbourne/ LHR where AJ claims a 98% occupancy and a full J cabin. Imagine not having to stop over in LA to get to Seattle or Chicago is a possible dream come true for many J flyers on a genuine business trip. Similarly, as a recreational traveller, a direct flight to Paris, Amsterdam or a major German hub would be fantastic. In light of the huge membership of QFF, might the company seek the opinion of its dedicated flyers or is… Read more »

Brian

As usual…the unions will hold the company to ransom!

Craig

That’s simply nonsense. If you read the article you would see that the union negotiated in good faith for the introduction of the 787 which has afforded the company a 30 percent productivity gain the company are seeking further reductions in conditions and pay for project sunrise. They are holding the gun to our heads

Pilot

No draft contract has been put forward by the company so how the pilot group can dispute anything is puzzling….

jjdjd

The number of typos/grammar mistakes in this article is embarrassing…

Joanna Bailey

Care to expand on this? Can’t see any myself.