A key union in aviation has backed Virgin Australia over Qantas’s budget carrier Jetstar as the two airlines battle for the rights to run extra flights on coveted routes to Bali.
Australia’s International Air Services Commission (IASC) is considering applications from Virgin and Qantas for the rights to almost 2,500 extra weekly seats between Australia and Indonesia available under the countries’ bilateral air services agreement.
Qantas has proposed offering an additional 2,320 weekly seats with the extra Jetstar flights, carried on a daily Cairns-Melbourne-Denpasar route from May and a thrice-weekly Adelaide-Perth-Denpasar route from August.
Virgin Australia wants to fly 2,464 seats a week, on Gold Coast-Perth-Denpasar and Adelaide-Perth-Denpasar routes.
In a submission to the IASC made on Monday, the Transport Workers Union argued Virgin should be chosen for the extra flight capacity because it would employ local aviation workers.
The TWU national secretary, Michael Kaine, said in a letter to the IASC’s director, Jasmina Ackar, that Qantas would not do so with the Jetstar flights.
Kaine said the TWU had arrived at the position after consultation with the union’s members, which include Qantas Group and Virgin workers.
“Prioritising directly-hired, local aviation jobs is essential to the long-term stability of the aviation sector in Australia, and maintaining a high level of safety and service standards,” Kaine wrote.
The TWU noted that Virgin had committed to employing directly hired, locally based crews for these additional flights, “an initiative which would significantly contribute to the growth of local aviation jobs in Australia”.
“Virgin’s commitment stands in contrast with Jetstar and Qantas’ heavy reliance on internationally-based crews,” Kaine said.
He pointed to a union claim that Jetstar Asia pays some Indonesian crew on its international flights from the country as little as $2.93 an hour under an employment arrangement that is a vestige from an airline it acquired in 2014, Valuair.
A Jetstar spokesperson said the hourly wage claimed by Kaine was misleading, and “Bali based crew take home an average income of $23.50 an hour”.
“Like many airlines around the world, we have some cabin crew based in international destinations where we operate a large number of flights, such as Bali,” the spokesperson said, adding that Bali-based crew’s salary can also include bonuses, commissions and allowances in addition to base pay.
In a statement announcing the TWU’s support, Kaine noted Virgin’s recovery after entering administration during Covid saw workers take “huge sacrifices” to ensure the airline’s long-term existence.
Owners Bain Capital are expected to relist Virgin Australia on the stock exchange this year.
Eight carriers already fly between Australia and Indonesia.
In Qantas’s submission, the airline pointed to data from the year ending September 2023 which showed Jetstar operated the largest number of seats on flights to Indonesia with 43.4% while Qantas operated 11.4%. Combined, the airlines had rights to 20,076 weekly seats.
Virgin Australia’s existing allocation of 4,924 seats represents 14.7% of the market, with the remainder flown by foreign airlines.
After both carriers expressed interest in the extra flights, the IASC asked the airlines to outline the public benefit of their proposals.
Qantas argued Jetstar being awarded the extra flights would bring lower air fares – and said the budget carrier’s fares were between 14% and 68% lower than competitors.
Virgin argued if it received the extra flight rights, it would be a boost for competition, denting Qantas and Jetstar’s dominance. It noted Jetstar is the only Australian carrier on the Perth-Bali route currently.
Virgin also pointed out that it staffs its flights “exclusively with crews based in Australia, whereas we understand that Jetstar relies heavily on cabin crews based in Thailand, Indonesia, Singapore, and New Zealand for its international flights”.
The battle for capacity comes amid an ongoing controversy over the Albanese government’s refusal to grant Qatar Airways an almost doubling of its flights capacity to Australia.
The proposal would have helped partner airline Virgin Australia expand its limited international offering and was backed by a range of tourism groups and state premiers as lowering air fares.
The Qatar proposal was opposed by Qantas and the saga raised questions about the Australian airline’s influence in Canberra. Qatar and Virgin are understood to still be hoping for the extra flights to be granted this year.
