This was written in the Jetsatr EBA thread by Yossarian. I am copy pasting here because it's one of the best posts I've ever seen on this forum and it's very relevant to the Sunnies and EAA EBAs.
I would like to make a few observations regarding the soon to be released Jetstar EA proposal.
What is being offered is a 4.5% real pay cut compared to the previous Agreement. Overtime kicks in at 70 hours as opposed to 75. Rostering remains woeful, with no restriction on the fatiguing practices of CAO 48E and a vague promise of a "Jetstar developed" roster bidding system, which will no doubt be as good as the current system- i.e. effectively no control over roster bidding at all. There is no provision to prevent the contracting out of pilots' jobs to 'shell companies' on even lower conditions as has been attempted in the past.
Since pay and rostering are the main components of any EA, let's look at how this proposal compares with the previous deal, and with the competition.
Firstly the proposed 4.5% real pay cut represents a loss of income of $240 000 in today's money for a Narrow Body Captain over a 30 year career. Bear in mind that without the real pay cut Jetstar pilots would still be the lowest paid in the industry.
Relative to the competition Jetstar pilots are being offered 18% less than Virgin pilots for the equivalent job category.
A Jetstar Narrow Body Captain will be on less than a Regional Jet Captain at Virgin.
A Jetstar Wide Body Captain will be on less than a Virgin 737 Captain.
The offer is substantially less than Tiger pilots are on (the exact figure depends on overtime worked and what value you attribute to the credit hours that Jetstar pilots get for 70 hours vs less credits at 55 hours for Tiger).
In short a reasonable estimate is that the current salary offer is 8-10% less than Tiger- although difficult to provide an exact comparison due to the factors listed above.
Additionally, the introduction of an SO rate that barely meets the "better off overall test" (BOOT) compared to the Air Pilots' Award will create an underclass of pilots who can be bought off as a faction to get a future substandard EA over the line- very similar to what occurred in 2008.
The second part of the equation makes the Company's offer even more insulting. Whilst Tiger work to CAO 48 and Virgin's work rules closely approximate CAO 48, Jetstar proposes to continue operating under the fatiguing CAO 48E. This means Jetstar Pilots will be required to work up to 20% longer shifts (e.g. Trans-con BOC returns) for 10-18% less pay than the competition. This saves the company an enormous amount of money by having to employ fewer crews, and is paid for by the adverse effects of fatigue on the health of the pilots.
Don't expect any relief from an FRMS either. The unions and JPC have not been provided with any concrete information about what the result of this change in legislation will actually mean for rostering and work rules so if you vote yes to this deal- assume that what we currently have (CAO 48E) will prevail.
The justification for these woeful terms and conditions is in part the recently announced record Qantas loss. If we look closely at the economic arguments the Company is using to tie the two together we will find that they are tenuous at best.
Firstly, Jetstar Australia did not make a loss. It is profitable. That management have perhaps wasted millions on the "Asian Casino" franchises is unfortunate but does not have anything to do with this agreement.
It is an Enterprise Agreement, and therefore the offer should relate to the performance of the Enterprise that employs the employees bound by the Agreement.
It may be Management's prerogative to choose to "invest" millions on their pet startup projects but to justify taking that money out of their existing employees' pockets is to draw a very long bow indeed.
What matters in determining sustainable wages is the profitability of the enterprise in question and the unit cost of labour ($ per block hour) relative to the competition. If anyone tells you anything else they are misleading you. For years Alan Joyce has been saying "we've got to be competitive". Well Alan and Jayne, it's YOU who now have to be competitive!
It is axiomatic that if a business cannot afford to pay the market price for its inputs it should not be in business. Jetstar pays the market price for its fuel. It pays the market price for its aircraft.
Why?
Because if it did not then the aircraft leasing companies and the oil companies would withhold supply. Either aircraft wouldn't arrive or if they did no-one would be willing to fill them up. Why would they if Jetstar demanded an 18% discount compared to what everyone else has to pay?
Jetstar think that they don't have to pay the market price for labour.
Why not?
Firstly because labour mobility in Australian Aviation is virtually non-existent. A Jetstar Captain can't tell the company to jam it and go to Virgin for a big pay rise. In most other industries this would be possible. Because we effectively can't leave the Company without leaving the country or re-starting our careers, pilots' options are limited. We can't effectively withhold the supply of our labour by leaving but we can by engaging in legally Protected Industrial Action (PIA).
Jetstar believe we pilots don't have the balls to engage in PIA. Therefore they don't need to worry about paying the market price for our labour.
So confident are Jetstar that the pilots will not withhold the supply of their labour that they are actually proposing to cut our pay (adjusted for inflation) when it was already well below the market rate.
This is a perfectly rational business decision. The first rule of business is to never pay more than you have to for anything. Right now Jetstar are offering this woeful deal because without the imminent and plausible threat of PIA there is nothing forcing them to pay more.
Can they afford to pay more?
The Jetstar CEO has recently briefed employees that Jetstar enjoys a yield premium over Tiger due to its network advantage. Alan Joyce has publicly stated that Jetstar has the lowest cost base of any Australian airline. If yields are greater than Tiger, and the cost base is lower, then the Company can afford to offer comparable or better conditions to its pilots and still be in a better financial position.
Jetstar is more profitable than Virgin. It makes up for in operating efficiencies what it loses in yield. Jetstar would still be profitable if its pilots were on the same conditions as Virgin pilots.
These are the facts.
Jetstar can afford to pay, however unless the alternative is an effective campaign of PIA, the incentive is much greater for management to pay themselves instead.
What will happen if the deal is voted down? I would imagine that based on past practice the Company will remove a couple of the more outrageous elements of the proposal (offer full time to forced Flexi-liners and scrap the 6 grey days). They will then threaten to take back pay off the table if the subsequent deal is not voted up.
Ultimately it comes down to this. This is grossly inadequate deal. There is no way of sugar coating it.
If the Jetstar pilots vote it up then we are doing ourselves out of hundreds of thousands of dollars each over the course of our careers.
We are committing to continued issues with fatiguing rosters and no control over our roster bidding.
Not only this but we will establish a precedent which allows the Company to rob us in future by cutting real wages under the pretext of a manufactured crisis that conveniently occurs each time an EA is renegotiated. Voting yes to this deal will put downward pressure on the wages of all other pilot groups in this country. Voting yes will mean that Alan Joyce and Jayne Hrdlicka's bonuses will come out of the lost wages they have cheated us out of when we are already the lowest paid airline pilots in Australia.
Despite being logically correct, all these arguments are just dancing in circles. Jetstar are taking the piss. They know it and we know it but nothing will change their strategy unless we pilots stand together and withhold the supply of our labour. Until we show united courage and fortitude, vote NO to this insulting deal and subsequently vote YES to PIA we will not be offered the market price for our labour.
There are only a few times in one's life that we must take a stand and say "this far and no further- I will not be diminished and beaten down and exploited any longer. You have pushed me into a corner and now I will fight my way out- come what may".
Now is such a time.
Jetstar Pilots- get ready to fight!