Over the past decade, Qantas has accelerated outsourcing efforts that have squeezed out its spirit. During COVID it sacked more than 9,000 staff — at least 1,700 of them illegally — sending the jobs to mainly foreign companies and ports.
In the process of its outsourcing frenzy, Qantas sent thousands of Australian jobs and hundreds of millions of dollars to overseas companies, many based in tax havens — such as Zurich, Abu Dhabi and Singapore — some of which have appalling human rights records, such as the United Arab Emirates (UAE), that breach Qantas’ code of ethics and its supplier code of conduct.
As Amnesty International has said of the UAE:
The kafala (sponsorship) system tied migrant workers’ visas to their employers, preventing them from changing or leaving employers without permission. Those who left their employers without permission faced punishment for “absconding”, including fines, arrest, detention, and deportation, all without any due process guarantees. Many low-paid migrant workers were acutely vulnerable to forced labor.
The UAE also criminalises same-sex sexual activity. The gender expression of trans people is also criminalised. So much for Qantas wrapping itself in the rainbow flag.
The outsourcing process has denied the Australian government significant company income tax and sales tax revenues, even as Qantas garnered $2.7 billion in COVID-era corporate welfare, and gained protection from the government as it blocked Qatar and Turkish Airlines from providing international competition — all the while bleating about Australian jobs.
“These are jobs here in Australia, they’re Australian jobs,” Alan Joyce said.
Well, some of them are, but certainly not the jobs they used to be, and not all are in Australia.
Engineering
In engineering, the trend has only been one way — offshore to a wide range of destinations from Dresden to Manila, Abu Dhabi to Singapore, Los Angeles to Hong Kong. In doing so, Qantas has sent jobs and income tax receipts offshore in return for work that is too often subpar, engineers say.
In the early days of the A380 offshore maintenance, Qantas used Lufthansa Technik in Frankfurt and aerospace manufacturer EFW in Dresden, which engineers said completed quality work. However, Qantas then started using Lufthansa Technik in Manila, which engineers described to Crikey as “woeful”, noting the incredible number of issues they had.
“They dropped an A380 engine while removing it, damaging it beyond repair,” one engineer said. Qantas long-haul engines are estimated to cost approximately $25-$40 million. Manilla staff also damaged a trailing edge flap beyond repair, another engineer said.
Any aircraft that came from Manila — A380s, A330s or Boeing 737s — reportedly had issues. Because of this, Qantas wouldn’t allow Manilla staff to remove engines, and instead relied on Sydney engineering to complete the tasks.
Part of the problem with Qantas and its outsourcing of maintenance is that it no longer sends Qantas engineers for oversight — a cost-cutting measure under Joyce, implemented by a manager he handpicked externally who cut maintenance to the bone.
“As of today we still don’t send a LAME [licensed aircraft maintenance engineer] who is qualified on the aircraft to oversee the maintenance,” one engineer told Crikey. “A dumb move; not many airlines do such a dumb thing.”
Cabin maintenance
Engineers described cabins on all Qantas aircraft as “putrid and in need of a lot of TLC”, and filthy compared to other operators. Passengers who travelled on Qantas this week who spoke to Crikey also attested to this.
“The current model is to let the cabin defects pile up on long-haul aircraft and then have them fixed in Singapore or Los Angeles,” pilots and engineers said. But this very often doesn’t happen and the list keeps on growing. Premium seats are often blocked out because of disrepair or inability to recline properly, one pilot told Crikey.
The national carrier previously had a department in Sydney with 100+ engineers who did nothing but cabin work. That department was closed down when COVID hit, company sources said.
“Supply chain issues are a minor part of it, the major part is we had a maintenance system in place to handle the cabins and we had people who were experienced in all the fiddly cabin work and now we don’t,” an engineer said.
Engineers said that many cabin defects are not airworthiness items, so they can be deferred indefinitely.
Pilots and engineers sheet the blame to “outsourcing the daily cleaning to the cheapest supplier”. There are a lot of new cleaners with Emirates working for companies like Cabin Services Australia, another Emirates subsidiary that sits in the cosy, protected Qantas/Emirates ecosystem.
“They are new immigrants, they are treated like crap and worked to the bone,” one insider said.
Flight attendants
One less visible outsourcing program at Qantas has been the steady drift of flight attendant jobs offshore in the airline’s international arm Qantas International, as well as its low-cost carrier Jetstar. The group now runs multiple crews in offshore entities and local labour-hire companies.
In Australia, the game is also about the long-term cutting down of hourly rates for full-time employees, but also the casualisation of much of the cabin crew workforce.
Jetstar leads the way in terms of egregious pay. Jetstar International pays $26.39 per hour to permanent employees, but the company no longer hires into this group. These workers are denied promotional opportunities, as management favours offshore and crew from Team Jetstar, a newer entity on lower pay and more limited conditions.
As of March 2023, all new employees in Jetstar cabins are hired by contractor Maurice Alexander Management at $30.35 per hour. Despite these workers being classified as casual hires, the employment restrictions resemble permanent employment without the benefit of annual leave and sick leave, unions report.
But Jetstar’s offshore crew takes the biggest hit. The friendly and efficient Thai crew who staff the flights to Phuket — and are also sent elsewhere in Asia, including Japan — are paid $2 per hour, and Singapore crew are paid $6 per hour, unions said. At Qantas, mainline cabin crew are similarly sliced and diced, with UK and New Zealand-based crews being the worst paid.
Freight and ground staff service operators
At Sydney’s Qantas Freight facility, there are six different employers, each with different pay and conditions despite freight service operators doing the same jobs. In other states, Qantas uses a similar model, mixing businesses and labour hire to offer workers different pay and conditions for doing exactly the same jobs.
In 2012, Qantas acquired Australian Air Express (AAE), which helped run its freight facilities. The agreement in place at AAE said labour-hire workers must be paid the same rates as directly hired employees and a number of other clauses meant to protect all employees. Qantas, by moving the workers into the Qantas Freight facility, found a loophole in the labour-hire protections in the AAE agreement. This allowed it to introduce its lower-paying subsidiary Qantas Ground Services, and increasingly hire casual labour workers on wages comparable to the relevant award.
AAE has approximately 95% full-time staff on good pay and conditions, and Qantas Ground Services is 95% part-time with lower pay and conditions. But insecure workers who make up an increasing proportion of that workforce at the three labour-hire companies are only paid at basic award rates and conditions, usually as casuals, the Transport Workers’ Union has said.
The overall picture is both unedifying and depressing. Locally Qantas is moving more of its staff — even regular cabin crew — to employment by labour-hire companies on lower pay and conditions. And in sending skilled labour in its engineering group offshore, Qantas is single-handedly running down Australia’s skills base and capacity to service aircraft.
None of this would seem to fit in, at all, with the Albanese government’s stated policy goals. Over to you, Catherine King and Tony Burke.
Will you ever take a ride aboard the flying kangaroo again? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
