Overview
3.1
It is clear from the evidence presented to the committee that public health measures taken in response to COVID-19—for example, border restrictions—have had significant consequences for Australia's aviation sector. This chapter explores the evidence received by the committee to date regarding the impact of COVID-19 on the aviation sector in terms of job losses, stand downs and outsourcing. Witnesses and submitters highlighted the financial and mental health impacts on aviation workers, as well as the risks of skill loss given the highly specialised nature of the aviation workforce.
3.2
The chapter also details the evidence provided in relation to how COVID-19 and the downturn in passenger movements have affected regional Australia and sectors dependent on aviation, such as tourism. For example, in a report commissioned by the International Transport Workers' Federation (ITF), the McKell Institute pointed out that as a result of Australia's geographically dispersed population and large land mass, remote and regional communities rely heavily on aviation to remain connected to wider Australia and have many aviation-reliant jobs, including tourism.
3.3
This chapter then examines the evidence received in relation to the need for ongoing support.
Job losses, stand downs and outsourcing
3.4
As discussed in Chapter 2, submitters described a number of different actions taken by different aviation employers in response to COVID-19. These included:
reducing workloads from full-time to part-time;
requesting employees to take any accrued annual or long service leave;
standing employees down with or without pay;
reducing pay and conditions;
voluntary and involuntary redundancies; and
suspending enterprise bargaining.
3.5
The Department of Infrastructure, Transport, Regional Development and Communications (Department of Infrastructure) submitted that at the peak of the crisis, passengers carried in Australia fell by around 97 per cent and over 30 000 aviation workers were stood down or laid off.
3.6
According to Mr Scott McDine, Head of ITF Sydney, '[a]pproximately 30 per cent of [the aviation] workforce has been let go and is now out of work'. He argued that this represents a greater proportion than in other comparable nations, such as the United States of America and Singapore.
3.7
Mr Matthew Brine, First Assistant Secretary, Environment, Industry and Infrastructure Division, Department of the Treasury, explained that payroll jobs in the air and space transport industry are continuing to decline: '[t]hey are now at almost 19 per cent below pre-pandemic level'. In contrast,
economy-wide payroll jobs fell by 8.5 per cent between 14 March and 18 April 2020 but have since recovered to be just 3 per cent below pre-pandemic levels.
3.8
The committee heard evidence that the aviation sector suffered large job losses particularly in the major airlines, which are the sector's key employers. For example, following voluntary administration, Virgin Australia (Virgin) was acquired by private equity firm Bain Capital. The company restructure cut 3000 jobs cut and discontinued the Tigerair Australia brand. In addition, Qantas outsourced over 2000 ground handling positions at 10 Australian airports, made 6000 positions redundant and stood down 25 000 workers.
3.9
Ms Jayne Hrdlicka, Chief Executive Officer and Managing Director, Virgin, explained that:
When borders closed in March last year demand for air travel reduced to almost zero overnight. [Virgin's] domestic flying reduced by more than 90 per cent and international stopped 100 per cent, forcing us to ground 125 aircraft and stand down roughly 80 per cent of our workforce.
3.10
Ms Hrdlicka outlined the impact of these measures on Virgin's staff:
Many have lost their jobs and others remain stood down with no certainty about when they will be able to return, as we must align our workforce to the day-to-day dynamics in play with borders. We started with around 10,000 employees at the commencement of the pandemic. While we expect to be able to support at least 6,000 jobs once borders are open domestically and stay open and once the international borders are open, right now we have roughly 3,000 employees fully stood up and working.
3.11
The Transport Workers' Union (TWU) submitted that '[b]y March 2020 tens of thousands of aviation workers had been stood down from their jobs'. It reported that dnata and SNP Security workers left without support due to JobKeeper exclusions 'were longstanding aviation workers struggling to find a job elsewhere'. Furthermore, 78 per cent of these workers had worked in the industry for seven years or more and 62 per cent were actively seeking work.
3.12
In March 2021, the TWU published the results of a survey of 900 aviation workers which found that only 11 per cent of aviation workers have resumed normal working hours. Furthermore, of the workers who have left aviation or been made redundant, more than 35 per cent had over 20 years' experience and 25 per cent had between 10 and 20 years' experience.
3.13
The Australian Council of Trade Unions (ACTU) noted that '[s]ignificant proportions of the workforce had been outsourced to contractors who were often forced to work long hours with insufficient resources'.
3.14
According to a survey undertaken by the Australian Federation of Air Pilots (AFAP), 57 per cent of surveyed pilots had been stood down and 23 per cent had been made redundant.
3.15
Another survey carried out by the Australian Services Union (ASU) found that 88 per cent of aviation workers have been stood down during COVID-19 and, as at January 2021, 30 per cent had no hours of work.
3.16
As noted in Chapter 2, the Australian Airports Association (AAA) estimated that more than 70 per cent of staff at regional airports have been placed on reduced hours, been re-deployed or made redundant. It further submitted that:
Reductions in jobs and core airport activity also affect airport-related services (food and beverage, retail, hospitality) along with a deferment of capital works and construction activity. This means reduced wages and salaries paid to staff, contractors and suppliers which has also had negative effects in the wider economy, particularly in regional communities.
3.17
Mr James Goodwin, Chief Executive, AAA, added that:
Prior to the pandemic Australia's airports maintained the jobs of more than 200,000 Australians, including almost 9,000 directly employed by airports. We estimate that almost 10 per cent of full-time airport workers have lost their jobs, with many more being underemployed or placed on reduced hours.
3.18
The committee also heard that many smaller airport businesses have also stood down or laid off staff during COVID-19. For example, Ms Rachel Crowley, Executive General Manager, Communications and Public Affairs, Brisbane Airport Corporation, estimated that around 10 000 jobs have been lost or stood down at Brisbane Airport across airlines, the staff that they have based at the airport, ground handlers, security, contractors, cleaners and retailers.
3.19
The ASU submitted that throughout the pandemic, employers have abandoned any roster patterns and stand employees up and down with very little notice. It argued that this 'unpredictability makes it almost impossible for workers to supplement their JobKeeper income by working in alternative employment, or organising care for their children'.
3.20
Mr Bruce Rogers, a delegate for the ASU and United Services Union, noted that '[i]n the whole of last year I was only stood up for two weeks'. Similarly, Mrs Desiree Sheets-Chavolla told the committee that she was stood down between April and November 2020, while Ms Nerisa Tofete explained that she had gone from working full-time to 12 hours per week.
3.21
Ms Darlene Bailey, a former dnata employee, informed the committee that the majority of Qantas catering staff took redundancies as they weren't getting any work. However, Ms Bailey observed that a small number were retained to retrain lower paid dnata staff to do the jobs that the former Qantas workers were performing in the catering centres.
3.22
A number of submitters observed that '[t]o supplement their income to make ends meet many employees have obtained additional casual or fixed-term employment, such as working at a supermarket'. Ms Tina Courtenay, formerly a relieving duty manager with Qantas, pointed out that this was resulting in exhaustion amongst many stood down aviation workers.
3.23
Additionally, the committee heard that aviation employers have refused to accommodate job share and flexible work arrangements due to COVID-19.
3.24
Individuals and organisations alike identified a range of impacts on the aviation workforce flowing from job losses, stand downs and outsourcing. Stakeholders expressed particular concern in relation to the 'enormous' financial and mental health impacts affecting aviation workers. Mr Hiranjan Aloysius, Chief Executive Officer, dnata Catering Australia, commented that '[t]he challenges of COVID-19 have pushed aviation workers to the brink financially, physically and emotionally'.
Financial impacts
3.25
Several submitters provided evidence in relation to the financial impact of being stood down. A number of these submitters reported taking out loans to make ends meet, putting off medical appointments and bills and withdrawing money from superannuation.
3.26
According to a survey undertaken by the TWU, 67 per cent of aviation workers not receiving JobKeeper were also not receiving JobSeeker support. In addition, a 'further 64 per cent of Dnata and SNP workers said they were suffering financial hardship, and 72 per cent had, or intended to withdraw their superannuation to pay the bills'.
3.27
The TWU submitted that the exclusion of dnata workers from the JobKeeper subsidy served a devastating blow that forced thousands of families into financial hardship. It argued that:
The repercussions of this are still deeply felt in many Australian households while the majority of planes remain grounded. Some workers were forced to take redundancy to pay off some debts in spite of having no other employment options, while others are still stood-down without pay, or picking up shifts wherever they can – though these tend to be few and far between.
3.28
The TWU conveyed the following statements from its members:
'Both my husband and I have been stood down from work due to COVID and as a result we are facing extreme financial hardship'.
'I have no income at all. I find it hard to survive with the bills, mortgage, health and other insurances, to make ends meet'.
'This has been terrible for us. I can't explain to you how this has impacted my life! I have no future I have no life. I am very depressed. I've worked for Dnata Catering for 28 years, my whole life. I don't even feel like living anymore. That's the impact that this has done to my family'.
3.29
The ASU reported that of 563 members in the aviation sector, 43 per cent had accessed their superannuation, 41 per cent deferred school fees and other expenses and 50 per cent are struggling to pay their mortgage or rent.
3.30
Furthermore, Ms Emeline Gaske, Assistant National Secretary, ASU, raised concern that if the Australian Government goes ahead with its plan to cut JobKeeper on 28 March 2021, these workers 'won't be able to pay the mortgage, pay the rent or put food on the table'.
3.31
The Australian and International Pilots Association (AIPA) argued that '[e]ven those that are left hanging onto the "stand down" lifeline are rapidly losing their connection to their occupation, both physically and mentally, with significant remediation costs looming'.
3.32
Mr Stephen Purvinas, Federal Secretary, Australian Licensed Aircraft Engineers Association (ALAEA), communicated his members' concerns:
The immediate concern for our members is that they do not lose the JobKeeper they get. That is the only thing. They've extended the mortgage repayments as far as they can. They've done everything. They're getting desperate.
3.33
One submitter explained their circumstances:
Since March we have faced endless uncertainty. We were stood down indefinitely. Our international jobs were made redundant. By May, we still weren't sure if we were eligible for the JobKeeper payments which would be crucial for our financial survival. The company was now in administration and the threat of not even receiving redundancy payouts was real.
3.34
Ms Claudine Tenana stated that '[i]n August 2020 we were financially in trouble, with strata bills banking up and with electricity bills'. She described the mental health toll this had on her family: '[it] caused us to reach out for help, for counselling. We've had to take out a $20,000 loan to make ends meet'.
3.35
Ms Edesse Hakko was ineligible for JobKeeper as an employee of one of the three major Gulf carriers (Emirates, Etihad Airways and Qatar Airways). She told the committee that prior to being made redundant in December 2020:
We were told that we had to accept pay cuts of 20 to 25 per cent. My base rate was incredibly low, and I had to make my wage from penalty rates. Just to give you an example, my penalty rate every shift was $28, but I was paying $22 in tolls, so it wasn't really worth going to work for $6.
3.36
Ms Bailey described being forced to take compulsory redundancy, 'even though there was some work being given to lower-paid staff members to do my job'. She expressed the view that:
Things would have been very different if we had received JobKeeper. We would still have been stood down, but at least we would have had money for food, mortgages and rent et cetera—and a job to go back to at the end of this.
3.37
The committee heard that many aviation workers sought secondary employment as a result of the downturn. For example, Ms Cory Flynn, Airline Worker and Delegate, Victorian Private Sector Branch, ASU, explained that
'[e]ven with JobKeeper, we've still had to go out and find other, casual work with employers willing to take us on casually while knowing that, at any stage, we could be recalled to our primary employment'.
3.38
Ms Courtenay told the committee that she 'currently [has] four casual jobs on top of the Qantas stand-up standdowns'. Ms Courtenay went on to describe the 'enormous' financial and personal impact of being stood down:
I live as frugally as I can. I have cancelled my health and other insurances to cut back on expenses. When this first started I was eating one meal a day. I haven't bought one piece of clothing in a year or had a haircut. I have used New South Wales state government electricity vouchers. Sydney is an incredibly expensive city and even the original JobKeeper rate was nowhere near enough to live on. I have withdrawn all the super I can to pay my existing expenses.
Mental health impacts
3.39
Many submitters also highlighted the mental health impacts of being stood down. For example, the TWU described the situation as 'leading to a mental health crisis among aviation workers', while Mr Nicholas Harris, a Virgin employee, emphasised that '[t]he mental health impact that this situation has taken on people really can't be underestimated'.
3.40
The Rural Doctors Association of Australia (RDAA) noted that the operation of health services at reduced capacity due to aviation sector disruption had a number of consequences. These included 'job loss or insecurity and consequent negative mental health repercussions for staff, as well as possible poorer health outcomes in the broader community in the immediate and longer terms'.
3.41
A number of aviation workers also described their personal experiences. For example, Ms Courtenay told the committee that her 'health is suffering because I'm now often working over 70 hours a week just to survive and pay the bills'. She argued that the 'physical, financial and mental health toll on all those who are affected by this will have long-term impacts and costs on our health and social care systems'.
3.42
In addition, Mrs Sheets-Chavolla stated 'I cannot explain to you what that stress has meant to me, and I don't think my happiness will ever be restored', while Ms Flynn explained '[i]t's just put a lot of added stress and pressure on our family unit'.
3.43
One member of the Flight Attendants' Association of Australia (FAAA) commented that '[n]aturally AviationKeeper is necessary for survival. Financially, of course. However many are struggling with their mental health'. The FAAA asserted that this impact would be compounded in the absence of JobKeeper.
3.44
Similarly, Ms Anna-Maria Saglimbeni, a Qantas employee, explained that 'the standdown has affected my mental health because I am so worried about the uncertainty with my job and how I'm going to pay my bills'.
3.45
Likewise, Ms Bailey described the impact of COVID-19 on her outlook on life:
My colleagues and I have gone from happy, independent, hardworking members of the aviation industry to broken, disheartened people who no longer have their jobs and have a bleak future ahead.
3.46
Ms Edesse Hakko reported that '[t]his experience has had a drastic effect on my mental health. I don't think people understand the toll it has taken on aviation workers'.
Qantas outsourcing
3.47
On 25 August 2020, Qantas revealed plans to outsource 2500 ground handling positions at major Australian airports, including Sydney and Melbourne, as well as at larger regional airports.
3.48
Mr Andrew David, Chief Executive Officer, Qantas Domestic and International, stated that the decision was terrible but necessary in light of the COVID-19 crisis which had seen the airline hand down a $1.9 billion annual loss for the 2019-20 financial year.
3.49
Despite this, a number of submitters criticised Qantas' decision. The TWU noted that although Qantas was given a 'huge amount of public support financially through JobKeeper and other financial aids', it had outsourced its 'entire ground operation in a direct attack on collectivised workers, to push out the union and engage labour-hire workers on lower wages and conditions'. The TWU argued that this decision 'will have the effect of further eroding wages and conditions across ground handling'.
3.50
Similarly, Mr Harris stated that outsourcing leads to 'a very toxic culture in workplaces' due to different people performing the same jobs but being paid different wages and entitled to different conditions. He argued that this 'is creating that disparity in incomes', while the ASU stated that '[c]ontracting out and competitive tendering have consistently shown to be associated with reductions in terms and conditions of employment and reductions in numbers of employees'.
3.51
In contrast, the Australian Aviation Ground Handling Industry Alliance (AAGHIA) claimed that outsourcing of airline ground handling can achieve many benefits, including providing competition, driving innovation and improving efficiency. However, in the short term it brings significant extra costs in staff training and reaccreditation, along with major capital investment. It submitted that as a result:
There is now significant pressure on ground handlers – and their workforces, most of whom have not worked since March – to support the potentially dramatic and imminent rebound in domestic travel as state borders open.
3.52
On 9 December 2020, the TWU filed a case in the Federal Court seeking to overturn Qantas' decision to outsource its ground handling workforce on the basis that it was unlawful under the Fair Work Act 2009 (Cth). The case is due to be heard in April 2021. As noted in Chapter 2, Qantas is also engaged in ligation over its alleged misuse of JobKeeper.
3.53
Mr Michael Kaine, National Secretary, TWU, informed the committee of a third lawsuit against the airline due to its refusal to pay sick leave to stood down employees. The circumstances of Mr Peter Seymour, a former Qantas employee who was refused paid sick leave following the introduction of JobKeeper despite his 31 years of service, were discussed in the previous chapter. The TWU, Electrical Trades Union, Australian Workers Union and Australian Manufacturing Workers Union have sought leave to appeal to the High Court of Australia. Mr Kaine remarked that:
Qantas has spent its money trying to push into other areas of aviation, trying to smash other aviation companies and fighting its workers in the courts, and the federal government's processes and lack of plan has allowed them to do that.
Impact on regional employment
3.54
Many submitters also emphasised the ramifications of public health measures on rural and remote communities dependent on air travel. Issues raised included interruptions to supply chains and poorer access to health services, education and employment.
3.55
The RDAA informed the committee that regional Australia is highly dependent on aviation. It submitted that the consequent negative impacts on rural and remote Australia have been extensive:
…not only in relation to industries and businesses in sectors such as agriculture, fishing, mining and tourism, but also on the rural and remote public and private health services which are not only health care providers but also businesses and employers.
3.56
In particular, the RDAA warned that the restrictions on passenger flights and interruptions to the flow of needed supplies into Australia's rural and remote communities have had a negative effect on the physical and mental health of people living in these communities.
3.57
Furthermore, the ACTU argued that regional areas are likely to be disproportionately impacted by any reduction in the size or vigour of the aviation sector. It submitted:
Regional areas would experience a devastating loss of economic activity and potentially a loss of emergency response capacity. With an unsupported aviation industry, regional communities risk being cut off from health care, education, economic and travel opportunities that the industry provides.
Tourism
3.58
As noted in Chapter 1, the aviation sector plays an important role in facilitating international tourist arrivals and supporting domestic tourism activity. For example, the McKell Institute estimated that Australia's tourism industry employs 666 000 people, while the Department of Infrastructure submitted that tourism directly contributed around $50 billion to Australia's gross domestic product in 2019-20, or approximately 2.5 per cent.
3.59
Mr Daniel Gschwind, Chief Executive, Queensland Tourism Industry Council, stated that '[w]e need the aviation pipeline for tourism'. Similarly, the AAA submitted that '[t]here is no doubt that many key sectors of the economy rely on aviation, particularly inbound tourism'.
3.60
In addition, the AFAP highlighted tourism as a 'prime example[] of the economic activity and prosperity enabled by Australia's aviation sector'.
3.61
The COVID-19 pandemic began as Australia's tourism sector was still dealing with the aftermath of one of the worst bushfire seasons on record. Travel restrictions had a large and immediate impact on many Australian businesses and their workers. By the start of April 2020, most international tourists had left Australia, causing tourism exports to significantly reduce.
3.62
The Department of Infrastructure reported that international passenger travel declined by 98 per cent in October 2020, compared to October 2019. EY estimated that, as a result, Australia lost around $61 billion in economic value between March and October 2020, or approximately $250 million per day. No material recovery is expected until international travel restrictions are eased.
3.63
Prior to COVID-19, aviation moved over 100 million domestic and international passengers each year. According to Queensland Airports Limited, this included about 8.4 million passengers travelling through the Gold Coast, Townsville, Mount Isa and Longreach airports to various tourist destinations in Queensland. It reported that this number dropped by approximately 80 per cent as a result of public health measures from April to November 2020.
3.64
Mr Adam Rowe, Executive General Manager, Business Development and Marketing, Queensland Airports Limited, advised that '80 per cent of the visitation to the Gold Coast is from domestic markets' and '[d]epending of course on the seasonal nature of the market, 20 to 30 per cent of a domestic service will have an international traveller component'.
3.65
Mr Gschwind told the committee that 'a very good portion of the estimated 50,000 tourism businesses that are registered in Queensland… would be in some way impacted by the absence of international visitors'.
3.66
A number of submitters also highlighted the link between domestic tourism recovery and state border controls. For example, the committee heard that South Australia's three-day lockdown period in November 2020 resulted in visitor cancellations within 48 hours.
3.67
The Department of Infrastructure noted that the opening of a number of state borders had an immediate positive effect on the aviation and accommodation industries, with more flights being scheduled and accommodation bookings on the rise. Similarly, Mr Gschwind noted that 70 per cent of domestic interstate visitors rely on aviation to visit Queensland.
3.68
The committee heard evidence that domestic tourists have different travelling and spending patterns to those travelling overseas: trips tend to be shorter, lower yield and involve fewer activities. Margy Osmond, Chief Executive Officer, Tourism and Transport Forum, stated that:
…there is no way that domestic tourism can fill the gap that will be left by inbound international… Essentially your average Chinese visitor to Australia probably spends $8,500 while they're here. Your average Aussie who heads off for a holiday is probably spending about $1,500.
3.69
A number of submitters argued that the tourism sector requires ongoing financial support due to its dependence on aviation. For example, Mr Scott Connolly, Assistant Secretary, ACTU, stated that 'there is a need for ongoing support for the aviation sector and for the tourism sector that's so closely related to it'.
3.70
Likewise, Mr Gschwind contended that 'businesses severely impacted by international border closures and domestic disruption must have access to a wage subsidy program post JobKeeper'.
Regional tourism
3.71
Inquiry participants particularly highlighted the importance of tourism in regional areas. For example, Mr Brine commented that the parts of the tourism sector that are most affected are those that are further from the capital cities, as they rely heavily on the aviation sector to transport domestic and international tourists.
3.72
The ACTU submitted that 45 per cent of all tourism in Australia is regional tourism, with regional airports acting as transport hubs for passengers and goods. It stated:
Approximately 15 million passengers pass through regional airports each year in Australia – representing 12% of total air passengers nationally. Tourism brings hundreds of millions of dollars to regional areas each year and supports a plurality of private sector employment in many regional areas. The Australian Airport Association estimates that regional airports alone support the employment of some 4450 people nation-wide – an estimate which does not include the thousands of indirect jobs which would be lost if regional routes were to shut down or see reduced activity levels.
3.73
Meanwhile, in a report commissioned by the ITF, the McKell Institute found that 91 694 businesses in regional communities heavily reliant on
aviation-driven tourism filed for JobKeeper as at August 2020. It argued that this significant uptake of JobKeeper demonstrated the reliance of these communities on the economic activity driven by regional tourism.
3.74
The Australian Local Government Association commented that '[o]ne of the hardest hit aviation-related sectors are the regional tourism operators'.
3.75
The committee intends to address the impacts of the COVID-19 pandemic response on sectors that rely on aviation more fully in its final report.
Skilled aviation workforce
3.76
The committee received evidence that working in aviation encompasses a wide range of jobs and skill sets, including:
aircraft engineers (mechanical and avionics);
management, finance and administration.
3.77
In its 2012 report Australia's regional airports: Facts, myths & challenges, the AAA stated that running an airport requires significant skills, including commercial expertise, airport-specific technical skills, airport safety, security and environmental regulation. It noted that training arrangements to acquire the relevant skills are sometimes complex, as aviation skills development is pursued at a number of levels by industry, including through higher education and vocational education and training.
3.78
Aviation has extremely high standards of procedural compliance and training standards, owing to safety, anti-terrorism and national security needs. Mr Hiranjan Aloysius, Chief Executive Officer, dnata Catering Australia, told the committee that, because of this, 'it takes an incredible amount of time and financial investment to train, accredit and on-board employees'.
3.79
In addition, the committee heard that the aviation industry is a significant driver of skills acquisition. The ACTU submitted that aviation drives skills acquisition by creating demand for skills in both upstream and downstream industries to service aviation, including government, manufacturing, security, retail, food services, hospitality, engineering, logistics, public safety and tourism. It argued that:
It is through this combination of both direct and indirect effects that the aviation sector represent[s] a key driver of vocational skills within the Australian economy. Without this sector driving demand for these transferable skills the Australian workforce would be significantly less prepared for the future job market than it already is.
Pilots
3.80
The Civil Aviation Safety Authority is responsible for setting the minimum requirements of flying experience and knowledge standards for pilots and engineers. For a commercial pilot license, this includes 150 flight hours, proficiency checks, a Class 1 medical certificate and completion of theory exams within a two-year period, while an air transport pilot license additionally requires at least 1500 hours' experience and completion of an approved training course in multi-crew cooperation.
3.81
A significant barrier to entry into the aviation industry is the cost of undertaking relevant pilot training and courses. For example, the Expert Panel on Aviation Skills and Training reported that:
[In 2018], a Bachelor of Aviation student will incur a FEE-HELP loan for the flying training of $100,070 (minimum) and an additional HECS-HELP debt of $27,555 (minimum). In addition, there is an upfront cost of equipment/publications, and medical of $4,938 bringing the total to $132,563. If a student elects to undertake a Flight Instructor rating then the fee costs (plus equipment) costs will increase to $145,788. For a double degree student that increases to $154,973.
3.82
The committee heard evidence that as a result of the downturn pilots are struggling to meet ongoing pilot experience requirements. These include minimum experience (flight hours) and knowledge and period currency standards. For example, the AFAP submitted that:
Employed pilots have unique safety and performance checks embedded in workplace practices and procedures. Given the predicament of there being significant cuts to flying opportunities, many qualified but stood down pilots face the risk that their skills and qualifications have or will become stale. Furthermore, pilots who are not employed also face the possibility of needing to self-fund such recurrent check arrangements.
3.83
The committee heard that pilots are a heavily scrutinised workforce and that a new or returning pilot candidate can take many months to be inducted and cleared due to regulatory requirements. The AFAP explained that 'the longer a pilot is away from active flying duties, the higher the cost and longer the timeline to reactivate them to a 'Job-Ready' status'.
3.84
Furthermore, if made redundant a pilot is unable to obtain the relevant authorisations under Part 61 of the Civil Aviation Safety Regulations 1988 through their airline.
3.85
Evidence was provided in relation to the prohibitive costs involved in maintaining a pilot license while not employed as a pilot, including costs associated with medical examinations, licensing and proficiency checks. The AFAP argued that this is not only problematic for unemployed pilots, but also for the aviation sector which may face skills shortfalls in the wake of the pandemic.
Engineers
3.86
In particular, the committee received evidence that engineering skills are critical to the aviation sector. For example, the ACTU submitted that:
Science technology engineering and maths skills are essential in underpinning multiple facets of the aviation sector. From the advanced manufacturing and technical supply chains that engineer, build and maintain aircraft, to the IT professionals enabling the operation of airlines and our airport in a complex operating environment, the air safety and regulatory professionals ensuring that the industry meets high levels of operational safety.
3.87
Australia has two primary aircraft engineer trade qualifications. An aircraft maintenance engineer (AME) maintains and services aircraft under the supervision of a licenced aircraft maintenance engineer (LAME). LAMEs work at a more senior level of aircraft maintenance engineering. A Certificate IV is required to attain an AME qualification. However, a licensed AME must also hold an Aircraft Engineering Licence issued under Part 66 of the Civil Aviation Safety Regulations 1998.
3.88
To qualify and apply for a licence, an AME must have successfully completed the required units of competency and theory module examinations through a CASA-approved maintenance training organisation for the particular category of licence and meet practical experience requirements. Furthermore, AME licences are perpetual, but to keep licences current, AMEs are required to have six months' experience in the field during the previous two years.
3.89
Mr Purvinas detailed his personal experience of attaining a LAME qualification: 'I started at the age of 16. I got my first licence when I was 30. It took me 150 exams to get the qualifications that I hold to be licensed on four aircraft types'.
Professional training requirements
3.90
As noted above, the committee received evidence that COVID-19 has impacted the ability of certain aviation workers to continue to meet professional training requirements. As a result, issues have arisen relating to the maintenance of skills and capabilities during the downturn. Submitters noted that due to the long period of negligible flight activity resulting from
COVID-19, many aviation workers will need to be retrained and reaccredited to ensure safety standards are maintained for both domestic and international flights.
3.91
The AAGHIA submitted that, in addition to pilots, personnel requiring recertification include aircraft tow drivers, aircraft load controllers, aircraft movement coordinators, trainers, systems experts, aviation safety and compliance personnel and leaders across the sector. Furthermore, it argued that '[w]ithout these functions, airlines cannot fly'.
3.92
Mr Glenn Rutherford, Member, Australian Aviation Ground Handling Industry Alliance, informed the committee that due to the long period of negligible flight activity, almost the entire ground handling workforce has needed, or will need, to be retrained and accredited. He estimated that this would require a training investment 'in the order of $15,000 per skill'.
3.93
The ASU explained that aviation workers are required to 'understand and comply with an extensive set of regulations and requirements to ensure a safe and secure airline environment'. Furthermore, it submitted that each person in a critical front-line aviation occupation must have licenses, certifications, training and experience. For members of the ASU, this includes holding an Aviation Security Identification Card, forklift license or being registered as a regulated air cargo agent, as well as completion of formal qualifications, such as in relation to airport operations, management or aircraft movement control.
3.94
Mr Goodwin pointed out that 'even a security screener requires weeks of training and certification and needs to go through security vetting, so it would take a number of weeks, and potentially months, to have somebody available in a role like that'.
3.95
Similarly, Mr Rogers commented that '[t]o do the basic job of checking in a passenger you get two weeks training and then you're buddied for two weeks and then you learn the rest of it on the job'. He estimated that it 'could take a good six months to get the skills and the knowledge of every situation you're going to encounter [for check-ins]', plus a further six months for concourse.
3.96
Mr Damian Pollard, a current Qantas employee, stated that 'Qantas workers go through hundreds if not thousands of hours of training'.
3.97
Mr Aloysius added that '[r]ight now it is an eight-week process to bring back a new employee or to bring a stood-down employee back to work, retrained, reaccredited and ready for service'.
The need for ongoing support
3.98
Submitters agreed that 'aviation is essential to Australia's economic recovery'. In support of this view, the committee heard evidence that there is a need for ongoing financial support to preserve aviation capacity, foster consumer confidence and sustain aviation workers. The following section will address the need for ongoing support, with particular regard to the important role of skilled aviation workers in COVID-19 recovery, before turning to explicitly address the evidence received in relation to 'AviationKeeper'.
3.99
Ms Jayne Hrdlicka stated that without JobKeeper it would take several months for Virgin to 'get stood back up and to get the capacity to support the demand'. In particular, she emphasised the importance of the flexibility enabled by JobKeeper:
As borders have opened and shut, it has proven invaluable in giving us the flexibility to quickly ramp back up with the skilled workforce to support Australians… and then of course to just as quickly stand down employees when borders close due to outbreaks and keep our highly skilled workforce ready so we are able to respond in weeks and days, not months and years.
3.100
Ms Hrdlicka contended that '[n]o business can survive these sorts of unplanned extreme demand swings without support, especially an industry that has heavily fixed costs'. She argued that without support:
…it is impossible for us to stand back up quickly and support the country as it opens up and to take advantage of those moments when we can all be free and are back to normal. Without a way to keep these critical employees connected, it's not financially viable either for us or for them, as they seek to manage their living expenses. The aviation industry risks being materially delayed in its recovery and forced to downsize while demand is significantly depressed and then rehire and retrain when it ramps up, and the implications of that for the economy are going to be significant. The consequences that will have with respect to fares and accessibility will also be felt by people in the regions, and they will be significant.
3.101
Mr Rutherford stated that without government support, the entire aviation industry will be constrained on how quickly it can recover. He estimated that would be likely to have 'a multibillion-dollar flow-on effect to the entire economy at a time when Australia needs its economy growing'.
3.102
Similarly, Ms Teri O'Toole, Federal Secretary, FAAA, highlighted the critical importance of a trained aviation workforce for recovery:
Our cabin crew will be instrumental for post-COVID recovery. They will be need to be trained, know their emergency procedures, have their security compliance as per CASA requirements and be ready to get their uniforms on to start at short notice to get the planes back in the air.
3.103
Mr Gschwind emphasised that '[t]he expertise required to operate and manage airlines, airports and associated support infrastructure cannot be purchased off-the-shelf'. He argued that aviation, and industries dependent on aviation, 'need to be able to hang onto staff and their skills to be able to scale up when the time comes'. To this end, Mr Gschwind argued in favour of a wage subsidy program post-JobKeeper for those businesses severely impacted by international border closures and domestic disruption.
3.104
Ms Edesse Hakko offered an employee perspective. She stated that:
The government need to stand up and support the aviation sector and work in all companies because they will need us once planes start flying again. Not only that; they will need the experienced workers.
3.105
Mr Rogers, a full-time employee with Jetstar, explained that JobKeeper 'makes a world of a difference' for aviation workers. He observed that 'all you need is a border closure and it is back to zero, so we need that guarantee of JobKeeper to keep us going, especially for a person who is full-time'.
3.106
Similarly, Ms Tofete argued that 'we were the first industry to be affected and we are definitely going to be the last one to be back on its feet'.
3.107
The committee also heard concerns in relation to the sustainability of regional airports. Mr Goodwin explained that prior to COVID-19, regional airports were struggling to meet their operating expenses, with local governments (and regional taxpayers) absorbing this cost. He called for the Australian Government to extend its support for the aviation sector, including a
six-month extension to JobKeeper.
3.108
The ACTU contended that failure to support the aviation sector would have a number of serious short and long-term consequences, particularly in regional areas. It submitted that:
Many regional areas, without industry assistance, will therefore likely face a reduced connection to the aviation industry and the loss of significant benefits to the economy and the consumer that this connection brings, not to mention the employment and direct economic activity.
3.109
Moreover, submitters argued that an ongoing wage subsidy will ensure that airports can play their critical role in Australia's economic recovery by securing employment for not only the aviation industry, but also for
aviation-dependent sectors such as tourism.
Risks of skill loss
3.110
As noted above, the aviation workforce is comprised of individuals with
extensive knowledge, skills and experience across a range of areas, including engineering, safety, operations and ground handling. Even before COVID-19 hit, Australia faced an aviation skills shortage. Meanwhile, the impacts of the pandemic have forced airlines to make drastic cuts to workforces. As a result, many skilled workers have left the sector. In this section, the committee considers evidence received regarding the need to prevent further skill loss.
3.111
A number of submitters reflected on the importance of aviation skills for recovery. For example, Ms Christine Dacey, Deputy Secretary, Transport Group, Department of Infrastructure, Transport, Regional Development and Communications, noted that 'in order to have any restart happen in any sensible, methodical way you need to have the right number of people with currency and [] skills'. Similarly, Mr Brine commented that 'there's a need to maintain a critical mass of those skills if we're to see the aviation sector recover quickly'.
3.112
Mr Rowe highlighted that the loss of critical technical and safety skills could be a key hindrance to recovery. In addition, Mr McDine commented that '[f]urther loss will cripple the aviation sector and slow the economic recovery and slow the recovery of air travel, freight and the export industries that it supports'.
3.113
Ms Gaske noted that '[r]ecovery is on the horizon, and we need these workers if that recovery is to be as successful as we all want it to be'.
3.114
Some submitters highlighted the time involved in training new workers. For example, Mr Aloysius stated '[dnata] cannot afford to lose skills and talent. When we do, we certainly cannot bring replacements in the next day, the next week or the next month like many other less regulated industries can'.
3.115
On this point, the AIPA added that:
For highly qualified licenced personnel, the gaining of essential knowledge and experience creates a lead time for supply that will substantially lag the demand if we are forced to respond to a whole cadre of those personnel being permanently lost to the industry.
3.116
Professionals Australia emphasised that '[c]ritical skills in engineering, IT and STEM broadly are at risk of being lost from the industry due to stand downs, restructures, and redundancies'. For example, the ALAEA explained that 600 of its members, comprised of LAMEs employed in regular public transport and regional airlines, had left the sector during the COVID-19 pandemic. It argued that without JobKeeper many more would be forced to seek employment elsewhere:
Many of our members do not want to leave the industry. Some of them are left with little choice. They cannot pay their bills or mortgages whilst employers keep them on hold awaiting a day's work.
3.117
Mr Bruce Stokes, Member, AAGHIA, advised the committee that it would take the ground handling sector years to rebuild key skills:
From the point of hiring green staff to enter the industry, some of the senior roles or some of the specialist roles—such as, loading the aircraft or performing load control functions—really are a factor of years. You have to start on the tarmac, so to speak, and there are costs associated with that. Then you have to progress to being a driver, then to being a load operator and then to being a load controller. That really is years.
3.118
The committee heard strong concerns that without support there would likely be major employment impacts, as well as a significant reduction in the industry's capacity to act as a driver for skills acquisition. The ACTU argued that this would result in 'a less effective aviation workforce and an overall less skilled Australian workforce'.
3.119
Mr Stephen Byron, Managing Director, Canberra Airport, expressed concern that if JobKeeper were to conclude on 28 March 2021 this 'would lead to the airlines having to take tougher decisions to reduce their workforce further, which would then in turn reduce their capacity to ramp up if and when demand returns…'.
3.120
Submitters also raised concern that the loss of skilled aviation workers would have significant safety implications. Qantas was rated the safest airline in the world by AirlineRatings.com, the world's only safety, product and COVID-19 rating website. Ms Courtenay attributed this status to the 'vast experience of the staff' and contended that Qantas could not afford to lose its skilled workers. Likewise, Mr Don Dixon, a Qantas employee with 20 years' experience, confirmed that the loss of experienced aviation workers would lead to a decrease in safety, while Ms Hakko stated that airlines will need the experienced workers once travel restrictions are lifted.
3.121
Likewise, Captain Louise Pole, President, AFAP, noted that the organisation is 'in a position where we are potentially going to lose huge amounts of experience, which will tell on our safety record in the future, after the pandemic moves on'.
3.122
The committee received evidence that with reduced flying activity and an uncertain rate of recovery, many aviation workers had sought alternative employment or early retirement. For example, the AIPA noted that '[f]or many, the rate of recovery will force a choice between the uncertainty of resuming their aviation careers and the apparent security of alternative employment'. It claimed that the loss of knowledge presents significant challenges: if the supply of skilled personnel is substantially reduced, the industry may be unable to meet demand when it increases and there is a notable time-lag in equipping new staff with the appropriate degree of skill.
3.123
The AIPA argued that even for aviation professionals who return to the industry, they will require refresher training that may exceed the capacity of existing training systems. To address these concerns, it concluded that aviation staff require targeted support in addition to JobKeeper. In particular, it submitted that '[s]upport for qualified pilots stood down due to the COVID-19 induced market collapse is critical'. Additionally, the AIPA submitted that 'stood down maintenance personnel, cabin crew supervisors, operations controllers, dispatchers an airport safety managers need similar support so that we do not bleed future capacity due to financial distress'.
3.124
Prior to COVID-19, the shortage of skilled personnel in the aviation sector was a global problem. Mr Gschwind highlighted that due to COVID-19 '[s]taff and skills shortages are already emerging as our next significant challenge' in Australian aviation.
3.125
The committee heard that competition for skilled workers may be a key challenge for the aviation sector. Mr Connolly stated that:
There will be serious compromises on safety in the sector as skilled workers leave to find other work, regulators will be forced to manage with fewer staff and lower funding, and companies, either by choice or no choice, will cut corners to remain profitable.
3.126
Mr Kelly noted that 'STEM skills, once lost, are not easy to replace'. Likewise, Mr Goodwin stated that in the absence of an ongoing wage subsidy '[t]here's a real danger that we'll lose a skilled workforce and the capability to recover'.
3.127
In addition, submitters also highlighted the age profile of the aviation workforce. For example, Mr Dixon advised that the average age 53, while Ms Gaske and Mr Kaine informed the committee that 'the overwhelming majority of employees are over 35'. Correspondingly, Mr Purvinas advised that the average age of ALAEA members is 49.9.
3.128
The loss of skills, experience and competency as a result of COVID-19 related redundancies and stand downs has arguably been exacerbated by the decision of Qantas to outsource 2500 ground handling roles across 10 airports in the middle of the pandemic. The majority of these roles were not stood down and remain critical to the ongoing operation and recovery of the aviation sector.
3.129
The committee heard from highly experienced Qantas workers who will, or have, lost their jobs as a result of the outsourcing, and who upon re-applying for their roles with the companies which were now providing those services, were rejected. Mr Sean Toohey, a former baggage handler for Qantas Ground Services, said:
We have a skilled workforce that want to continue in this industry, in aviation. They’re willing to step across to Swissport at lower pay rates, but we’re not being taken on…These guys have 30 years' experience, and they can’t get it. Now we’re looking at people who are coming in, and within two weeks, are being asked to push back a plane, which Peter [Seymour] was doing for 31 years… Is that safe?
3.130
Mr Pollard, who has worked as a Qantas baggage handler for 12 years, similarly expressed concern about the implications of the outsourcing, for the wellbeing of the workers and the impact on safety. Mr Pollard stated that:
I remember when the safety of the new operator was questioned and a spokesman from Qantas quoted that legacy workers actually had a higher rate of reportable incidents…I would put it back to them that this is because we have a safety culture instilled in us, so we will report everything. Qantas also has a just culture. I shouldn’t make assumptions, but I believe that maybe isn’t the case in some of the third-party operators.
AviationKeeper
3.131
As noted in Chapter 2, the majority of submitters expressed support for JobKeeper. A large number of these submitters argued in favour of 'AviationKeeper'—a targeted industry assistance scheme intended 'to apply to all aviation workers right up until the industry recovers'. Submitters, such as Mr McDine, contended that AviationKeeper is 'essential' as the sector 'was hit like no other during the pandemic and, while most industries are transitioning, airlines continue to operate under capacity and in an uncertain policy environment'.
3.132
Mr Gschwind advised the committee that skill losses would '[w]ithout a doubt' be exacerbated if JobKeeper ended in March 2021. He continued:
I'm pretty sure that there will be jobs lost or put on hold. But the risk is that people, if they are temporarily laid off, may drift away geographically—literally drift off—or certainly in terms of industries they work in. That's already happening. We try to stem the tide, if you like, where it's possible. JobKeeper will be an important tool, or some payments of that sort, for stemming that tide.
3.133
Qantas expressed the view that 'it is vital that the government extend and enhance all existing aviation support programs, at least until international travel resumes'.
3.134
The FAAA argued that the only way the Australian Government can meet its long-term objectives is to ensure continued support for the industry beyond March 2021 in the form of AviationKeeper. It argued that AviationKeeper would 'enable our industry to be ready to keep the economy moving again once flying picks up'.
3.135
Mr Aloysius contended that AviationKeeper 'would ensure organisations like [dnata] are geared for the resumption of travel by allowing us to retain skilled talent by staying connected to them'. He stressed that support for the aviation sector should include air-services providers.
3.136
Ms Gaske stated that if any further skilled workers were lost, 'we won't have the workers ready to go to build the industry through the recovery'. She also emphasised the multiplicative factor of aviation. Ms Gaske argued that:
We need JobKeeper extended so we can keep the industry going not just for these workers themselves; the whole industry ultimately means jobs on the ground all over Australia for regional communities and the tourism industry. That's income going into local communities to boost the local economies.
3.137
The ASU relayed the feedback from its members that the reduced JobKeeper amount is not sufficient as a sole source of income for affected aviation workers. Instead, it recommended a rate of $1500 per fortnight.
3.138
As discussed in Chapter 2, many individual submitters requested JobKeeper be extended beyond March 2021. Ms Saglimbeni said:
It is important that the government does more to support the aviation workers, because the aviation industry has been and continues to be severely impacted… Us aviation workers are hardworking, experienced and dedicated to our jobs. JobKeeper needs to be extended so we can continue to support our families and be ready to go back to work, at short notice, as the industry recovers.
3.139
Ms Saglimbeni added that 'if JobKeeper is not extended it will mean I will be in financial difficulty and I will not be able to support my family'.
3.140
Ms O'Toole contended that the absence of an ongoing wage subsidy for aviation workers 'will force cabin crew to find permanent positions outside the industry'. She stated that '[t]his loss will take years to recover from'.
3.141
In addition, many submitters emphasised the need to extend AviationKeeper to all aviation workers. For example, the ASU argued that AviationKeeper is needed 'to ensure that all aviation workers receive financial support and remain employed until the industry recovers' and must include all aviation workers, regardless of ownership structures.
3.142
Ms Marian Harris explained that:
We need 'AviationKeeper' because in the example of dnata and Cabin Services Australia, because we're foreign owned, you gave us one payment and you took it off. We cannot survive on what you're giving us now. We need some sort of stimulus package.
3.143
The TWU argued for AviationKeeper to come into effect to support aviation workers after the planned JobKeeper cut-off date of 28 March 2021. It shared the view of other submitters that AviationKeeper would address the financial hardship faced by stood down aviation workers excluded from JobKeeper and support recovery efforts.
3.144
On 22 January 2021, the TWU, ASU and others joined companies across the industry such as Virgin, dnata, Menzies Aviation, Gate Gourmet and Swissport to urge the Prime Minister implement AviationKeeper. The letter argued that this would ensure that the aviation industry can sustain the lasting impact of the pandemic, while maintaining and supporting its skilled and highly trained workforce. It was proposed that this scheme:
be extended to all aviation workers;
extend beyond March 2021; and
be phased out as domestic and international borders are phased open and confidence in aviation returns and flying returns to normal.
3.145
In addition to these requirements, Ms Gaske argued that any future wage subsidy payments made to businesses must 'be tied to ensuring that the workforce is supported, not the executives and the shareholders'.
3.146
Mr Kaine expressed similar concerns. He advised that 'the government should have required companies to keep workers connected with their employer, with themselves, and not allow them to do whatever they wanted'.
3.147
Ms Sally Taylor, Industrial Officer, FAAA, recommended that 'if a package is to continue, there be strict conditions on the company's ability to manipulate the system to the disadvantage of employees'.
3.148
Likewise, the AIPA noted that 'no small number of employers and institutions game the system to maximise cash flow and fee-syphoning rather than maximising efficient training and capacity maintenance'. Consequently, it argued that financial support needs to be provided directly to individual workers and, for pilots, tied to demonstrating a level of continuing competence.
Committee view
3.149
The devastating impact of COVID-19 on the aviation sector—which has been running at between 5 and 10 per cent of normal market capacity since April 2020—cannot be underestimated. It is apparent that COVID-19 has exacerbated underlying issues within the sector, including job security, deskilling and outsourcing in crucial safety and regulatory roles. Furthermore, it is clear that it will take airlines longer to bounce back than other parts of the economy, and it is unlikely that people will resume interstate and international travel at the pre-COVID rates for some time. Given these challenges, the committee would like to acknowledge the resilience and efforts of aviation businesses and workers over the past year.
3.150
The evidence discussed throughout this interim report clearly indicates that aviation is key to Australia's prosperity and economic recovery as the country emerges from the health and economic effects of COVID-19. As a vast and decentralised country, economic recovery cannot occur in Australia without a robust and viable aviation industry. As pointed out at the beginning of this chapter, the pandemic has had a marked impact on the aviation sector and, in particular, its workers. With uncertain economic conditions on the horizon, it is critical that the Australian Government provide adequate support to sustain the highly-skilled aviation workforce.
3.151
Moreover, the tourism industry is highly dependent on air transport. With Australia's aviation sector directly employing over 90 000 employees, and also supporting the employment of 666 000 people in the tourism industry, there are many jobs and livelihoods at stake.
3.152
The committee is deeply concerned that due to substantial redundancies and stand downs at Australian airports during the pandemic, there has been a significant loss of competency, skills and experience in airport operations. This loss of skill and experience has significant safety implications for workers, customers and the Australian economy at large. Submitters also mentioned that without the support of an ongoing wage subsidy current instability in the aviation sector, combined with the fundamental changes in the nature of work and loss of income, may result in further aviation workers leaving the sector.
3.153
The committee notes that the significant loss of skills and experience in the aviation sector has been exacerbated by Qantas' decision to outsource 2500 ground handling roles. There have also been substantial concerns raised about the implications for worker and passenger safety as a result of the outsourcing.
3.154
Importantly, throughout this inquiry, the committee heard testimony from aviation workers that clearly exposes deficiencies in the current financial support scheme, JobKeeper. The evidence discussed in this chapter reinforces the findings of Chapter 2 of this interim report: namely, that JobKeeper does not, and has not, provided adequate financial assistance to aviation workers.
3.155
The committee is of the view that if the Australian Government wishes to preserve critical aviation capacity, they must introduce a targeted wage subsidy for all aviation workers as JobKeeper is wound up. To this end, an extension to JobKeeper beyond 28 March 2021 paid directly to all aviation workers should be introduced as soon as possible to ensure the Australia's aviation sector is ready to lead economic recovery once travel restrictions are lifted.
3.156
The committee recommends that JobKeeper, or wage subsidies modelled off JobKeeper, be continued by the Australian Government to support aviation workers and organisations at the cessation of the JobKeeper scheme in March 2021. This support should be tailored to the economic conditions and government restrictions, including international border restrictions.
3.157
The committee recommends that Australian workers who pay tax and are employed by companies wholly owned by foreign sovereign entities, and Australian local government-owned entities should be eligible to apply for any wage subsidies or other Australian Government support programs for the aviation industry after the cessation of JobKeeper.
3.158
The committee recommends that the Australian Government consider making any further support to the aviation sector conditional on companies agreeing to:
not further weaken the job security of employees;
maintain existing regional services; and
implement moratoriums on the payment of dividends, executive bonuses and executive pay increases.