Has anyone heard about the reduction of the crew complement to 2 cabin crew on the E-Jet 170?
Apparently, they are in the process of editing the training videos and new procedures. This will be yet
another increase in workload and productivity that they are planning but not telling us about. If there is no truth to this rumour, then I can't see why a clause that mandates minimum crew complements on each aircraft type can't be included in the current proposal. However, I am certain the company would be hesitant and talk their way around it.
I am not sure what the exact process is if this EBA gets rejected and VBA continues with its application to terminate our current agreement, but it definitely requires further investigation as the rumours that we will be put straight onto a less than favourable award sound incorrect.
Consider some of the reasons
VB profits were down last year (taken from the company's own Annual Report by a friend of mine):
- 41% increase in marketing costs due to the launch of V Australia (costs shouldn't be as high for the 2010 financial year)
- 27% increase in fuel costs (which is currently being alleviated by the strong AUD and drop in oil prices)
- Labour and staff related costs increased only 11% to $595 million compared to a 19.3% increase in productivity (productivity is forecast to increase further this financial year, with several EBAs in negotiation for pit crew, ground crew and cabin crew)
- Despite intense competition in the market, there was a 14.1% capacity and yield was only down by 2.4% compared to the previous year
- Cost saving initiatives introduced throughout the year saved $90 million dollars and is set to achieve a further $150 million dollars in savings next year
- Cash flows from operating activities were $101 million, compared to $294 million in the prior year, reflecting the decline in yields and the start up costs associated with V Australia.
- The share price is up 40% since 30 June 2009.
And the icing on the cake after all the talk about the abuse in the EBA roadshows, General Manager of People, Mr R Tanner's total salary package was worth $551,000 for 2009 (up from $355,00 in 2008).
His salary consisted of:
- $275,00 in cash salary and fees
- $124,000 Short Term Incentive cash bonuses
-
$36,000 in superannuation benefits, compare the $1385 he received in super each fortnight with the amount you see on your payslip
- $69,000 in options
- $47,000 in Medium Term Incentive bonuses
- this figure does not include Long Term Incentive bonuses
We need to look at the bigger picture. Are crew complements going to be reduced? Are our sign-on times going to be reduced from 1 hour across the board? What happens if we vote 'no' again? Are we happy with the package they are offering and does it take inflation into account? Are we happy to deliver yet 'another' productivity increase without adequate compensation? What other cost-saving initiatives does
VB have in store for us?
In my mind, it is now very clear why R Tanner was so heated in the EBA roadshows, his Short Term Incentive, Medium Term Incentive and Long Term Incentive bonus targets were under threat as every cost-saving he makes across the people department means more money in his pocket.
It seems this is no longer about achieving cost savings to save Virgin Blue from failing during a recession, it is about achieving cost-savings so that managers and executives can achieve their Incentive bonus tragets and exercise their share options
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