Not the full story apparently, Squark.
VARA enjoy Business class travel as part of their award. The powers that be want to get rid of that and have said "ok. No staff travel for you lot until you align with the rest of the group and pax in Economy like everybody else".
The issue of career progression is a curly one: many in VAA think that it is reasonable and beneficial to have a group list. The rub is that many of the XR pilots have been there for 20+ years. The senior guys at VAA don't want any 'queue jumping' that puts them at a potential disadvantage.
The XR guys don't want to be tacked onto the bottom of the list, either, and who could blame them.