Qantas Shock: 2,500 Employees Stood Down

Qantas is temporarily standing down 2,500 workers as Australian border closures see flights dwindle. In a statement to the Australian Stock Exchange on Tuesday morning, Qantas said the affected domestic pilots, cabin crew, and airport workers, mostly based in New South Wales, will be out of work for two months.

Qantas is standing down 2,500 employees for two months. Photo: Getty Images

Delta strain strips Qantas’ domestic flying

Qantas and its low-cost subsidiary were almost back to pre-pandemic levels of domestic flying when COVID’s Delta strain arrived in town. Sydney is the center of that outbreak. A six-week-long lockdown there is expected to last another two months. Lockdowns are also currently occurring elsewhere in Australia, notably in southeast Queensland.

Subsequent travel restrictions and local border closures have seen Qantas’ domestic flying spiral back to 40% of pre-pandemic levels.

Qantas CEO Alan Joyce flagged the possibility of stand-downs recently in an internal staff email. On Tuesday, he acted.

“This is clearly the last thing we want to do, but we’re now faced with an extended period of reduced flying, and that means no work for a number of our people,” said Mr Joyce.

“We’ve absorbed a significant amount of cost since these recent lockdowns started and continued paying our people their full rosters despite thousands of canceled flights.”

This is the last thing we wanted to do says Qantas boss. Photo: Getty Images

Federal Government income support saves the day at Qantas

With Qantas and Jetstar canceled some 5,000 domestic flights in June, Qantas stresses these are not permanent job losses. At this stage, they are two-month stand-downs. Impacted employees will be given two weeks’ notice before the stand-down takes effect, with pay continuing until mid-August.

Current Australian Federal Government income support of US$552 per week targets people who’ve lost work or had their hours cut because of COVID-19 lockdowns. Qantas can claim that support for half their stood-down flight crews in a deal reached with the airline industry.

While the support gives airlines and their balance sheets some breathing space when it comes to employee stand-downs, the Transport Workers’ Union (TWU) has slammed the decision, saying there is “utter confusion” about who is entitled to income support. The TWU says the deal only applies to half the impacted cabin crew and pilots. Further, ground crew such as baggage handlers and cleaners are cut out as Qantas no longer directly employees them. Qantas recently outsourced 2,000 ground crew jobs.

“There is utter confusion over who will receive the wage subsidy. Qantas says it won’t pay workers stood down, but the Federal Government says it will only pay supports to cabin crew and pilots – and even then only half of them,” says TWU National Secretary Michael Kaine in a statement.

“There will be thousands of aviation workers terrified today about the future. They are being stood down from their jobs, and some won’t be able to access support. This half-baked approach on policy from the Federal Government doesn’t cut it for a vital industry like aviation.” 

Some 2,500 New South Wales-based Qantas employees will be out of work for two months. Photo: Qantas

Pilots union taken by surprise

Murray Butt, a Qantas Captain and President at the Australian International Pilots Association, told Simple Flying Tuesday’s announcement took pilots by surprise. He says while stand-downs had been flagged, there was no consultation or forewarning from Qantas.

As to who is entitled to income support and who isn’t, Captain Butt said Qantas and the Federal Government appeared to be working it out among themselves. He thinks around one-third of domestic pilots based in Sydney are facing stand-downs. But he also says the lack of detail from Qantas is causing confusion. With only half the stood-down pilots entitled to income support, AIPA is still trying to establish if Qantas will continue to pay the remaining pilots.

Just months ago, Alan Joyce was buoyant about the rebound of his domestic network. Shadowing the pattern in the United States, demand began to significantly uptick earlier this year. Qantas was rapidly adding capacity and bringing in bigger planes from its international fleets to operate flights.

“We’re pretty optimistic about where the domestic demand profile is,” said Alan Joyce back in April. “No one size fits all in domestic at the moment. What’s actually gone back to pre-COVID levels is the fly-in, fly-out market. The freight market is bigger than it was before COVID, and then in the domestic market, the leisure market is back to where it was before COVID.”

But a few hundred COVID cases and nervous State Governments can send the best-laid plans awry. Lockdowns in Melbourne in June, in Sydney across July, and now in Brisbane are shutting down key Qantas domestic hubs. Interstate travel bans on people who’ve been in these areas are further limiting who can fly.

It’s not just Qantas feeling the pain. With income support extended across the domestic airline industry, expect other airlines to follow suit soon.

AIPA thinks around one-third of Sydney-based domestic pilots may be stood down. Photo: Getty Images

TWU calls stand-downs a “kick in the guts”

Ground crew rather than pilots are Michael Kaine’s constituency. He wants to know why his workers are not as important as pilots and flight attendants. At a press conference on Tuesday, the TWU Secretary called the stand-down decision a “kick in the guts from the Federal Government.”

“Aviation workers performing experienced functions like pushing aircraft back, baggage handlers making sure an aircraft is properly balanced as we travel … these workers are somehow not as valuable as cabin crew pilots? That is a shocking indictment on the Federal Government.”

Qantas acknowledges Tuesday’s announcement is bad news for impacted employees, whether directly employed by the airline or not. But Alan Joyce thinks the end is in sight. He thinks borders will reopen as the vaccination rollout gathers pace. Once borders are open and people can fly again, the Qantas boss thinks passengers will be back in droves, and he’ll be able to get his employees back to work.

What do you think? Was today’s announcement from Qantas a surprise? Should income support cover everyone stood down at Qantas? Post a comment and let us know.