Senior pilots 'holding out' for 2 years VR are deluding themselves.
Firstly, any RIN from the 744 will likely create a maximum of about five subsequent training pathways.... Perhaps less depending on who goes where in subsequent fleets. If we allow $50K a go, that's $250K. Add on the CR component for the S/O that is going to get the chop and you're looking at somewhere in the vicinity of $300K. I'll be generous and allow &350K. One year pay for a 744 driver is probably circa $300K. So financially, it's a line ball call as to whether Qantas is better off dealing with the training costs or offering any more than $350K. They're certainly not going to offer $600K which is roughly two years pay.
Of course, you could argue that Qantas should factor in the retraining costs that they will need to pay in a few years time when movement starts again (plus the training if the redundant S/O wants to come back or the new S/O) but since when has Qantas looked that far ahead when it comes to spending money.
Redunandancy and tax is a complex area and when you take redundancy is very important. Let's say someone takes a $350K package on 1 Jul. The way in understand it is the first $125K(ish) for someone with 25 years of service is tax free and is considered exempt. Monies beyond that are then an eligible termination payment and subject to the lessor of that cap or the whole of income cap. I think (and happy to be corrected) that the remainder of the payment is subject to concessional tax rates- $225K would result in paying tax of circa $100K. If they take the redundancy at the end of the FY then they're going to be nailed for 46.5 cents in the dollar for every cent beyond the $125K as they will have earned $300K+ and then taken the ETP as well but their 'whole of income' cap is going to nail them Certainly, the tax implications of getting two years pay are significant- calculate the tax on $475K.
So if they get $350K, they're going to clear about $250K- about what they'd clear in 16- 18 months of work. If they get $600K they're going to clear about $360K- about two years of work. Both those examples presume taking the payout on 1 Jul.
Here are a few other points worth making.
767 captains to be demoted will be lucky to have seniority for A380 F/O. The reason for this is that with a 744 RIN displacing all the LH PER A330 commands and 30ish in Sydney, that there could well be 30ish Sydney A330 captains looking for a place to go- A380 F/O is the obvious decision unless they go for a 737 slot. That will trigger a RIN on the A380 F/O ranks also although increased flying hours will absorb some of those numbers. Junior A330 Captains as well as junior A380 F/Os need to be eyes wide open as to the implications of this process on them.
The training department will struggle for capacity. In the next 12 months there are at least 150 767 pilot training pathways- the vast majority of those between now and the end of January next year. Then there are the (rumoured) 40 744 captains and F/Os resulting in another 80 training pathways. We'll potentially need an A380 F/O RIN as well as an A330 F/O RIN-adding potentially another 60 ish pathways.
Anyway, those are my thoughts for the time being. Not as clear as I'd like due to editing hassles on the iPad but you get my drift.
