The Australian Federation of Air Pilots (AFAP) has warned history may repeat itself if Virgin Australia is not financially supported to continue operating throughout this Covid-19 (coronavirus) lockdown period.
“If there is something the Ansett collapse taught us, it is that the Government cannot wash its hands of responsibility at times like these,” said AFAP Executive Director Simon Lutton.
“Allowing Virgin to be put into administration would be a disaster for Virgin employees and the Australian public,” said Mr Lutton.
As the union representing more than 900 of the 1500 Virgin group pilots, the AFAP is looking for assurances that jobs will be protected and that employee entitlements will be able to be met.
“We know from the Ansett experience that, if Virgin Australia enters administration, it will be left to the taxpayer to pick up the tab for the $800 million in entitlements of the 10,000 direct employees and the 6,000 indirect employees whose jobs would be lost.”
“In 2001, the Howard Government imposed a tax on all passengers in Australia for more than two years to raise the funds to pay the entitlements of Ansett employees. In the end the taxpayer footed the bill and we would expect the same to occur in this instance.”
In response to reports the Government favours a market-based solution, the AFAP is supportive of any injection of equity into Virgin that prevents administration and protects the jobs and entitlements of employees.
“The Government needs to ensure that any investment is in the interests of the Virgin Australia employees and the Australian people,” Mr Lutton said.
“The Government must not let Virgin be carved up. This would lead to mass redundancies, loss of employee entitlements, and a greatly reduced select route network that would only fly between major capital cities to the detriment of regional markets.”
"If these conditions are not met the Australian Government has a responsibility to intervene now on behalf of the Australian public to ensure the aviation industry remains strong and competitive,” Mr Lutton concluded.
Background: Simon Lutton was employed at the AFAP at the time of the Ansett collapse and was directly involved in various arrangements, legal proceedings and creditor discussions which flowed from the Ansett collapse and extended for many years afterwards.
The AFAP is the largest pilot union in Virgin representing more than 900 of the 1500 Virgin Group pilots. Established in 1938, the AFAP represents more than 5000 Australian commercial pilots.