by A major aviation union has backed Virgin Australia over budget carrier Qantas, Jetstar, as the two airlines battle for the rights to run additional flights on separate routes to Bali.
The Australian International Air Services Commission (IASC) is considering applications from Virgin and Qantas for the rights to nearly 2,500 additional weekly seats between Australia and Indonesia available under the countries’ bilateral air services agreement.
Qantas has proposed offering an additional 2,320 weekly seats with the additional Jetstar flights, which will be carried on a daily Cairns-Melbourne-Denpasar route from May and a three-weekly Adelaide-Perth-Denpasar route from August.
Virgin Australia wants to fly 2,464 seats per week, on the Gold Coast-Perth-Denpasar and Adelaide-Perth-Denpasar routes.
In a submission to the IASC made on Monday, the Transport Workers Union argued that Virgin should be selected for the additional flight capacity because it would employ local aviation workers.
TWU national secretary Michael Kaine said in a letter to IASC director Jasmina Ackar that Qantas would not do so with the Jetstar flights.
Kaine said the TWU came to the position after consulting union members, including workers at Qantas Group and Virgin.
“Prioritizing directly employed aviation jobs, and maintaining a high level of safety and service standards, is critical to the long-term stability of Australia’s aviation sector,” Kaine wrote.
The TWU noted that Virgin was committed to employing directly locally employed crew for these additional flights, “an initiative that would significantly contribute to the growth of local aviation jobs in Australia”.
“Virgin’s commitment contrasts with Jetstar and Qantas’ heavy reliance on internationally based crews,” Kaine said.
He pointed to a union claim that Jetstar Asia pays some Indonesian crew on its international flights from the country as little as $2.93 an hour under an employment arrangement inherited from an airline it acquired in 2014, Valuair.
A Jetstar spokesman said the hourly wages claimed by Kaine were misleading, with “Bali-based crew taking home an average of $23.50 an hour”.
“Like many airlines around the world, we have some cabin crew based in international destinations where we operate a large number of flights, such as Bali,” the spokesman said, adding that bonuses, commissions and also include allowances in the salary of staff based in Bali. as well as basic pay.
In a statement announcing the TWU’s support, Kaine noted Virgin’s recovery after going into administration during Covid had seen workers make “enormous sacrifices” to ensure the airline’s long-term survival.
Owners Bain Capital are expected to re-list Virgin Australia on the stock exchange this year.
Eight carriers already fly between Australia and Indonesia.
In Qantas’ submission, the airline pointed to data from the year ending September 2023 which showed that Jetstar operated the most seats on flights to Indonesia with 43.4% while Qantas operated 11.4%. Together, the airlines had rights to 20,076 weekly seats.
Virgin Australia’s current allocation of 4,924 seats represents 14.7% of the market, with foreign airlines flying the rest.
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After both carriers expressed interest in the additional flights, the IASC asked the airlines to outline the public interest associated with their proposals.
Qantas argued that awarding additional flights to Jetstar would lead to lower airfares – and said the budget carrier’s fares were between 14% and 68% lower than rivals.
Virgin argued that if it got the additional flight rights, it would stimulate competition, hampering the dominance of Qantas and Jetstar. He noted that Jetstar is currently the only Australian carrier on the Perth-Bali route.
Virgin also revealed that it staffs its flights “exclusively with crews based in Australia, but we understand that Jetstar relies heavily on cabin crews based in Thailand, Indonesia, Singapore and New Zealand for its international flights”.
The battle for capacity comes amid ongoing controversy over the Albanian government’s refusal to allow Qatar Airways to almost double its capacity on flights to Australia.
The proposal would help partner airline Virgin Australia expand its limited international offering and has been backed by a range of tourism groups and key state parties to lower airfares.
Qantas opposed Qatar’s proposal and the saga raised questions about the Australian airline’s influence in Canberra. It is understood that Qatar and Virgin are still hoping to grant additional flights this year.
