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STANDING COMMITTEE ON ECONOMICS
13/03/2007
Qantas Sale (Keep Jetstar Australian) Amendment Bill 2007

CHAIR —Welcome. There has been some discussion with the committee about the relevance of the standard of maintenance facilities. Qantas has responded to that. I am happy for a short discussion of that matter for that to be tested, but there are other matters in the submission that are relevant to the inquiry and I would prefer we focused on that. The Qantas response can be tested but it is not to be the main domain of your presentation, Mr Purvinas. Have you got an opening statement to make?

Mr Purvinas —Yes. I commenced my working life as a 16-year-old working for Trans-Australia Airlines, TAA. I have worked for TAA, Australian Airlines then Qantas for the past 21 years.

CHAIR —You look far too young to be a TAA employee.

Mr Purvinas —My dad led me into it, so I had no choice.

CHAIR —You still look far too young.

Mr Purvinas —Approximately 10 years ago I picked up my first aircraft licence on the Boeing 747. I am now licensed on the 747 Classic, 747-400, A330 Airbus and 767 aircraft, so that will give you some indication of my background. I want to put something on the record: I believe Qantas is the safest airline in the world and I think that is something that we would all like to see continue. I will briefly read from the bill—this is:

A Bill for an Act to protect Jetstar from foreign ownership and ensure jobs and operations stay in Australia, and for related purposes

This amendment to the Qantas Sale Act, as we see it, applies equally across Jetstar and Qantas. With regard to the part that says ‘ensure that jobs and operations stay in Australia’, there is no background information as to why we need jobs to stay in Australia but, hopefully, I will give you some food for thought as to why you would like to see the maintenance operations stay in Australia. I probably do not need to talk too much about the Qantas’s safety record; it is up there at the top of the ladder around the world when it comes to maintenance.

Firstly, we have concerns with the part of the bill—and I am not going to talk extensively about whether Jetstar should be included in the Qantas Sale Act and so on—that is more related to the employment matters which have concerned our association, and that says:

... the facilities taken in aggregate which are used by Qantas and by any associated entity in the provision of scheduled international air transport services (for example, facilities for the maintenance and housing of aircraft, catering, flight operations, training and administration), located in Australia, when compared with those located in any other country, represent the principal operational centre for Qantas and its associated entities.

My concern or the concern of our association is that with the current wording—that is, ‘the facilities taken in aggregate’—we can actually see a new owner make a decision to send all Qantas maintenance offshore, and that is something we do not think is for the benefit of the Australian public and something that we would like you to consider.

I believe Qantas have already had a bit of a crack at some of the things we have had to say in our submission. I will give you a bit of background on maintenance in Australia and aircraft engineering. Qantas have, obviously, maintained their aircraft in Australia since 1920 with the occasional aircraft being sent overseas when Australian facilities are full. Last year in May—

CHAIR —Which you support, don’t you, from your submission?

Mr Purvinas —Yes, we have said that we understand that there is a need from time to time to send aircraft overseas. Last year, Qantas made a decision to close its heavy maintenance facility in Sydney, which was at the time the largest heavy maintenance facility. The closure cost the jobs of 256 licensed aircraft engineers and, I believe, in the vicinity of 600 staff all up. There were public statements made at the time by the CEO of Qantas, Mr Geoff Dixon, that this work would remain in Australia: the work would be going to the Avalon maintenance facility in Victoria. However, since that time, maintenance of all of the aircraft that were scheduled to go into the Sydney heavy maintenance facility on the Qantas maintenance plan has been carried out overseas, not sent to Avalon.

What has happened is that—and I will not go extensively into the words in my submission about the ratio of licensed aircraft engineers to aircraft—the maintenance of the aircraft that were scheduled to go to the Sydney heavy maintenance facility has been carried out by HAECO in Hong Kong and by Singapore Airlines at a facility; I believe it might be SASCO. The aircraft go over there and Qantas send a couple of Qantas engineers to oversee the operations, just to check that things are going smoothly and so on—and I believe Qantas mentioned that this morning, saying that we send our engineers over there. Those engineers are not to carry out the work. The licensed engineers that certify for that work in Singapore, Hong Kong and Manila, where the A330s go, are local people. The Qantas engineers that have been over there in the past six to eight months have given reports back to our association about how maintenance is carried out in overseas facilities, and I would like to give you some examples because I believe these go to the point about keeping these jobs in Australia, and that is part of the bill. These examples are some of the reasons for that. It leads to greater safety and it is something that is important to the Australian public.

These are some examples of what we have seen in overseas facilities. Qantas bought three aircraft approximately 10 years ago that we commonly refer to as the Ugly Sisters. I believe two come from Malaysian Airlines and one from—it may have been Cathay. Whilst having a heavy maintenance check in the Sydney heavy maintenance facility, a Qantas apprentice looked up at the ceiling of one of these aircraft that had all of the ceiling panels removed. He noticed that he could see right through to the ceiling of the hangar. On further investigation, it was found that the aircraft, which had their previous heavy maintenance check in Asian facilities, had had the sealant on all of the lap joints across the aircraft removed by using a tool which we call a pizza cutter—you can imagine what a pizza cutter looks like. Up in these facilities, the sealant had been taken out by the local engineers and a score mark had gone through the aluminium of the aircraft. The only thing that was holding those aircraft together was sealant. That is an example of something that happened approximately 10 years ago, when this aircraft was serviced prior to the heavy maintenance check in Sydney. And it was our apprentice who picked this up; the licensed engineers overseas did not.

More recently, up in Hong Kong, we had another example. The Qantas engineer who has been overseeing the maintenance in the Asian facility noticed that a job card had been put out to do an inspection on an APU fire wire. APU fire wire will let you know if there is a fire in the APU compartment, which is the auxiliary power unit at the back of the aircraft; it is a small engine. It is quite important that this component does not catch on fire. Certainly, as a licensed aircraft engineer and, more specifically, an avionics engineer I am aware that you cannot repair these fire wires in the APU compartment in any way. So our engineer up there noticed that a card had been issued. Local engineers found a bit of a problem in the wiring and taped it up. That is something that you would never see in Australia.

I will try to keep the other examples as brief as possible. We have a front spar inspection, where you inspect the leading edge of an aircraft. The card came back within an hour of being issued—no problem; there are no problems here. The Qantas engineer overseeing the operation said: ‘Wait a minute. This inspection normally takes many hours to complete.’ He went out there and found numerous corroded electrical plugs and clamps that required replacing.

We had a case in Singapore where there is a 747 currently. This 747 VH-OJQ inspection was carried out in, I believe, August and September. One of the Qantas engineers overseeing the operation noticed that a flight control inspection card was given to a local engineer and issued some time towards 11 o’clock or 12 o’clock at night or thereabouts. The Qantas engineer overseeing it started at seven o’clock the next morning and found that all the cards were signed off as inspected and there were no problems. The Qantas engineer then went out and had a look and found 26 control cables that required replacing. The control cables are the primary flight control cables that control your aircraft.

CHAIR —Mr Purvinas, you have made your point in relation to that. I would prefer it if we could get on to paragraph 16 in relation to concerns about the undertakings et cetera. Some examples were raised in your submission, but these are now outside that.

Mr Purvinas —I am not sure if you are saying that you do not want me to talk about things that were not in the submission.

CHAIR —No, I was not suggesting that, but I think we need to move on to the amendment bill itself. There are enough comments in the submission about—

Mr Purvinas —There is only one other matter that is touched on in my submission that I would like to talk about with regard to the maintenance in Singapore, and that is the use of day release labour from Changi prison on Qantas aircraft while they are being maintained. The prisoners are released under supervision and taken to the aircraft—obviously, not only Qantas aircraft—in the facilities there. The prisoners are used to wash down the wheelwell bays before inspections. They are used to go upstairs into the flight deck of the aircraft and clean the area out so that it is ready for inspection by the local engineers. This is something that particularly concerns us about jobs not being in Australia.

You have probably heard enough examples. I could obviously go on all day, but I will not bore you. I would like to reiterate that, while Qantas is currently sending 10 to 20 per cent of its aircraft overseas for heavy maintenance, Qantas is the safest airline in the world. Asian carriers and other airlines around the world send 100 per cent of their aircraft to these facilities. The importance to safety of having maintenance carried out in Australia is my prime concern for being here today. Secondary to that would be the employment and livelihoods of our members.

I will now go back to the bill before us. Section 5(b) talks about ‘the facilities taken in aggregate which are used by Qantas and by any associated entity’. If we are going to discuss the facilities taken in aggregate—

CHAIR —Are you talking about the deed?

Mr Purvinas —I am talking about amendment of the Qantas Sale Act which you guys are considering. As I stated before, those words allow Qantas to sell or put offshore all of its maintenance and keep its catering onshore. As expressed in the Australian and International Pilots Association submission, Qantas can keep 25 per cent of its entire operation in Australia and send 15 per cent of the operation to five other countries and still comply with these provisions. To maintain the intention of this bill, to ensure that jobs and operations stay in Australia, we would feel it appropriate to change a few words in 2(5)(b). Instead of saying ‘the facilities taken in aggregate which are used’, we would prefer the bill to state ‘each of the facilities which are used by Qantas’. That way the facilities can be taken as a single unit and ensure that only 50 per cent of any particular facility can be sent overseas. This would cater for Qantas’s current requirement to send overflow work to other maintenance facilities around the world. It is something that we think would be a good compromise and which would have the support of our association.

We also note, as mentioned in the submissions from the pilots association and the AMWU, the wording ‘located in Australia, when compared with those located in any other country’. We really need something in there to protect us from this provision that would allow Qantas to send it to five different countries and split its overseas work. It should be ‘the aggregate of all of the overseas countries.’ Again, in the submission, we did not work on the wording, but I urge senators to seriously consider taking ‘each of the facilities’ as a single unit and removing the words ‘taken in aggregate’.

CHAIR —We will proceed to questions.

Senator FIELDING —Thank you, Mr Purvinas, for your comments on the bill, particularly your comments as to improving it. There were other comments made before about improving it even further. One of the comments made today was about jobs and services. You have outlined in your submission that some have already gone overseas, that the concern is that more will go unless there are some conditions and that the Qantas sale bill is one of those areas in which conditions can be placed. Your submission is quite alarming to the extent as to safety. These are huge concerns about safety, which Qantas has got a tremendous record in—and we are all thankful for that and we also want to make sure that under a highly leveraged and geared situation that continues to remain in place. Do you think your concerns are real going forward?

Mr Purvinas —As I have already stated, I believe Qantas is still the safest airline in the world because it does not use these facilities as much as some of the other airlines do. Our concerns are real. Over the Christmas-New Year period we conducted a survey of our members, a mail-out which was sent back. We got quite a good response. We got about 1,200 submissions from our 3,000 members. One of the questions that we asked was about how often ‘you are asked or pressured by commercial pressures or management influence to not work strictly in accordance with procedures’. Seventy-six per cent of our members at Qantas said that at some time they are pressured by commercial pressures or management influence to not work strictly in accordance with procedures.

These pressures come about when you place financial constraints on a business such as engineering and maintenance. I am aware that the line maintenance department in Qantas at the moment is currently under the microscope by senior management. The manager of that part of the business has been asked to save $41 million. To save that $41 million, he has cancelled all of the licence-training courses of the previous 12 months that would normally be carried out to have people learn new skills, to learn to become licensed engineers when they are unlicensed and so on. All of the courses have been cut. Also, we find that our people are often undermanned on the ground. Where previously we would have had somebody called in for overtime, we now have the—

CHAIR —With the greatest respect, we are talking about Australian facilities. This is not a matter that is relevant to the bill. Senator Fielding, I am sure you will make some commentary about this in the press but we are now talking about Australian facilities and this is just not relevant.

Senator FIELDING —With respect, Chair, this bill does look at the issue of Jetstar, specifically its operations and services being placed in Australia. Quite clearly, from the submission that we in this inquiry have got and the comments that have been made, not only are there jobs at risk; it appears that safety could also be at risk here. I think it would be a little concerning to me that you think this is just sensationalism. This is a real concern to Australians. Jobs and safety are—

CHAIR —I ask you to withdraw that. You have put the bill up, Senator Fielding. There is no mention in your bill of safety concerns; it is about maintaining maintenance facilities in Australia. I hope you might reflect on the comment when I was talking about it being sensationalised. This is quite unreasonable. It is not in your bill. If these were matters of concern to you, then presumably you would have put them in there. They are not in the bill. We are talking about the maintenance of facilities in Australia, and we should stick to that.

Senator FIELDING —That is what we are talking about: what has been raised as a flow-on effect if that bill may succeed or not.

CHAIR —With the greatest respect, we are now talking about Australian facilities and it is unrelated to the matters contained in your bill. Whether you want to pursue this elsewhere is entirely up to you, but it is not part of the matters that this committee is considering.

Senator FIELDING —I certainly do not want to continue to debate this point, but quite clearly the submission is in order and it does talk a lot about safety and maintenance and services being placed in Australia. I think it goes a fair way to creating that link, which is an important link for me. We have also heard some comments today that jobs are under review. Is that a concern from your perspective?

Mr Purvinas —It would always be a concern if you are told your job is under review. But in this particular case we have currently got, we are in discussions with Qantas management at the moment about the remaining heavy maintenance facilities in Australia. I met with Mr Dixon—along with Bill Shorten, the National Secretary of the AWU, and Doug Cameron, the National Secretary of the AMWU—in December, and he advised us that the current cost structure of the Australian facilities is 20 per cent higher than that of the overseas facilities. He said that that had come down to some point where there is currently about a 12 per cent gap. He has asked the unions to work together with him to reduce costs further so that he can make it as cost competitive as possible so that he can sell the idea of keeping maintenance onshore to the board.

He did mention that if we can come down to somewhere close to within five per cent of the costs at the Asian facilities then we would keep maintenance onshore. But from that statement I assume that if we cannot match that he is going to make a decision, or the board will make a decision, to send maintenance offshore based purely on cost and not safety.

Senator FIELDING —In paragraph 18 you have raised concerns about Qantas jobs being exported overseas and that Qantas has been, in the last week or so, advertising maintenance jobs in Asia. Would you mind telling us about those concerns?

Mr Purvinas —That was an email sent to me on the day I put the submission together. It was quite an unusual advert that they placed in the Qantas system of advertising jobs. Normally a blue notice would come out and it would specifically state, ‘We’re after a licensed engineer to go up to Singapore to overlook a heavy maintenance facility for a period of six weeks,’ or it could be for a 12-month stint in the line maintenance area in Singapore, Los Angeles, London or wherever it might be. But in this particular case it was issued as a bulletin saying: ‘We’re seeking new job opportunities in Asia. We’re after aircraft planners and maintenance engineers. This is an opportunity for you to come up and live in Asia.’ This is not the traditional way Qantas have advertised jobs and it is very alarming to even think what they may be up to. I imagine a question may come out saying, ‘How do you know what they’re up to?’ I do not. All I know is something different is going on that they have not normally done.

Senator BERNARDI —At the risk of being called out of order, I have a couple of questions about the safety aspect of what you have raised here. Obviously it is a common concern, but you have not—

CHAIR —I will have to give it away, clearly—even my own are getting into me!

—The point I want to go to is that you have raised no objections about Switzerland or the USA for offshore maintenance at all. You are only concerned about Singapore and Manila?

Mr Purvinas —Yes.

Senator BERNARDI —For my benefit, can you tell me who else uses Singapore as an offshore heavy maintenance service hub?

Mr Purvinas —The set-up in Singapore is not a Singapore Airlines owned company; they use a subcontractor. Singapore Airlines put their aircraft in there as well. I was asked before if this is a real concern or not. I have a list of real examples—

CHAIR —No, the question was who else uses it?

Senator BERNARDI —I am coming to whether this is genuinely a real threat to safety. You mentioned Singapore Airlines, which has a pretty good safety record.

Mr Purvinas —The example I was going to quote will allow me to answer that question. I do not know every aircraft that goes through that facility, but it was noted to me yesterday by one of the gents who has been up there that he went to have a look at a panel that had come off a Qantas plane. He was given it back by the workshops up there and it was a panel off the Saudi airways plane, which was in the next bay. So I can certainly say that Saudi have their aircraft there. But mixing up parts like this is certainly one of the concerns that we have up there. Why haven’t I raised objections about the USA? Because we do not have any aircraft go there for heavy maintenance. Switzerland? We have had A330 aircraft there, but that was some years back.

The sites Qantas are currently looking at for maintenance are HAECO in Hong Kong and the facility in Singapore, and we currently have A330 aircraft being maintained in Manila. These are the sites that are currently under the spotlight. I will sit here and let you guys know that I believe safety and the training that Australian licensed engineers get—

CHAIR —We have been down this path. Senator Bernardi, do you have any further questions in relation to this matter?

Senator BERNARDI —I have one other question with regard to jobs. You mentioned 3,000 members in your recent survey?

Mr Purvinas —Yes.

Senator BERNARDI —Is that how many you have in your organisation?

Mr Purvinas —We have 3,000 members and roughly 1,200 associate members.

Senator BERNARDI —That explains why you said you have 4,200 members here. Of those members, how many are employed in Qantas and Jetstar heavy maintenance?

Mr Purvinas —Roughly 2,200.

Senator BERNARDI —Heavy maintenance located in Australia?

Mr Purvinas —Not heavy maintenance. As I stated in my submission, half of our guys are in line maintenance, which is the servicing of aircraft, and half are in heavy maintenance facilities. I believe we have about 800 at the Avalon facility at the moment, possibly 300 to 400 in the Brisbane heavy maintenance site and a couple of hundred in Newcastle.

Senator BERNARDI —So there are about 1,400 in total in heavy maintenance—

Mr Purvinas —Yes, roughly.

Senator BERNARDI  —and the rest are involved in service?

Mr Purvinas —Yes.

Senator BERNARDI —How many of them are employed by Virgin Blue in heavy maintenance in Australia?

Mr Purvinas —The set-up for Virgin Blue and their heavy maintenance facility is that they have outsourced to different companies, but their aircraft are quite a bit newer than the Qantas fleet and have not required heavy maintenance checks to the levels that Qantas do them at the moment.

Senator BERNARDI —How many are employed by Virgin Blue in heavy maintenance in Australia?

Mr Purvinas —Virgin Blue licensed aircraft engineers are split between two companies: Jetcare and Virgin Tech. I am not sure how many are employed there but I know our membership is roughly 100.

Senator BERNARDI —A hundred of your members in that?

Mr Purvinas —Yes.

Senator O’BRIEN —Qantas have given us a document in response to your submission. We received it this morning. I do not know if you have seen it but I will ask that you have a look at it. Point 3 is a statement about the mix of licensed to unlicensed engineers not dropping below 30 per cent. Do you know why Qantas, having said that these facilities are audited by CASA and Qantas, in addition send ‘a team of highly paid engineers and support staff that far exceeds that sent by any other airline to oversee maintenance performed at offshore maintenance providers’?

Mr Purvinas —That statement—I have not read it but I have heard what you said—refers to the engineers I made mention of earlier who go and oversee. It used to be that they sent two to four licensed engineers to the Singapore and Hong Kong facilities. When one particular aircraft, VH-OJQ, which I made reference to earlier, came back to Australia there were countless errors that had been noted by the licensed aircraft engineers who had gone over to oversee that operation. We currently have an aircraft in Singapore and, instead of sending licensed aircraft engineers over, they have sent over unlicensed guys and guys who are not even licensed on that aircraft. It is a 747. I know that there is an unlicensed engineer overseeing the operation and an engineer who is licensed on 737s only. It is a bit confusing that they would send to oversee an operation people who are not qualified even to certify for the aircraft in Australia.

Senator O’BRIEN —Does your organisation have members at the Avalon facility?

Mr Purvinas —Yes.

Senator O’BRIEN —As I understand it, Avalon has been proposed as the site to conduct the D check, or heavy maintenance, at Qantas.

Mr Purvinas —Proposed, yes.

Senator O’BRIEN —Has that not been occurring?

Mr Purvinas —No. The aircraft have been sent up to Asia. These are the aircraft that were scheduled to go into the Sydney heavy maintenance facility. On the closure of the site, Mr Dixon said that that work would go into Avalon, in Australian sites, and made this all public, and it was all nice and made everyone feel good about the situation. Then, several weeks after, our association received a letter from the organisation saying, ‘Unfortunately, we can’t fit the aircraft into Avalon; we’re going to have to send them to Asia.’ I believe there have now been four to six D checks up in the Asian facilities that were scheduled for Sydney heavy maintenance. Those aircraft have not been put into Avalon yet. I believe they are preparing the site for additional work and trying to acquire additional manpower, but at this stage they have not done that.

Senator O’BRIEN —In relation to the licence arrangements for aircraft engineers, are they the same in Australia as those for licensed aircraft engineers overseas?

Mr Purvinas —It is different everywhere in the world. The Australian licensed aircraft engineer takes approximately 10 years to attain those qualifications. It took me about 11. We have to do an apprenticeship and do 25 basic exams that you have to study off your own bat. You have to sit exams at Qantas where you can sit one or two at every two-month sitting, so it takes you two or three years to acquire them. Then you have to wait for your employer to decide that you are ready to do a licence course, and then you do a three- to four-month course in a classroom. After that, you have to go out into the workforce and get your work colleagues to sign that you have done 1,000 hours—that is in my particular case, for an avionics licence—in a logbook, to say that you are ready. Then you submit that to CASA and sit a further exam on air law, and then they make a decision on whether they think you are qualified to have a licence.

I know in the States you can pick up a licence in under 12 months. In Europe they have licensing which is for part licences, which you can acquire in quite a short period of time. I believe in Singapore the licence regime is quite strict as well; it is quite difficult to pick up a licence in Singapore. The concern for this association is that because it is difficult to pick up a licence in Singapore they use a very high ratio of unlicensed guys and ladies to work on their aircraft.

In Australia, a licensed aircraft engineer at any one time will be supervising or carrying out and certifying for his work and possibly two or three others. In the Asian sites, in Singapore they are certifying and supervising for their own and 11 others; and in Manila, we believe, one licensed engineer is certifying for his work and 21 others. We do not believe that one licensed engineer can oversee that amount of work at one time.

Senator O’BRIEN —Given the amount of training involved and the infrastructure, if heavy maintenance facilities do not function in this country—that is, all the work goes overseas—what sort of lead time would be required to recreate them here if an airline wanted to recreate them, if indeed that were possible?

Mr Purvinas —How long is a piece of string? I do not know. You can set up a maintenance facility in six weeks if you have an unlimited budget.

Senator O’BRIEN —If you have the skilled people to work in it.

Mr Purvinas —The problem is the skills are going to go out of Australia if we are allowed to see aircraft maintenance facilities drop off. Every apprentice who comes through the system spends—again, using my case—18 months as an avionics engineer in the heavy maintenance facility. For mechanical engineers, it is three years in a heavy maintenance facility learning their trade. If you take those facilities away or if you allow a consortium to buy an airline and use a loophole in a bill that is going to allow them to take those facilities away and put them offshore, aircraft engineers in Australia will not have the ability to go through that apprenticeship that they have gone through in the past.

Senator O’BRIEN —Just for clarity: there are a variety of checks. The D check is the heavy maintenance check, but there are several other processes of examination of aircraft that take place which would have to take place in Australia—

Mr Purvinas —Yes.

Senator O’BRIEN —from the inspections that occur regularly at the airports, for example at the bays, and beyond that. There are other sorts of aircraft checks and maintenance that would be unlikely to be sent out of Australia in any environment. Isn’t that true?

Mr Purvinas —Certainly the checks we carry out every time an aircraft lands and takes off, again, cannot be put offshore. At this stage at Qantas we do what is called a ‘walk round’ of an aircraft and check it at every transit. We also have a level of check called an A check, which probably takes about 12 hours to complete. A plane will not be sent overseas for that level of check. The C check is carried out over a period from six days to two or three weeks and is something that they would consider sending offshore. So there are different levels of checks.

Senator O’BRIEN —There are no C checks done overseas—is that right?

Mr Purvinas —Not to my knowledge in the past 12 months.

Senator O’BRIEN —The maintenance we are talking about is the D check, or the heavy maintenance check, which is when an aircraft reaches a certain age or period of operation and is taken out of service and stripped to its bare airframe, if that is the right terminology. That is where some of the other instances you talked about would reveal faults which may have to be attended to. So it is that one aspect of maintenance you are talking about?

Mr Purvinas —Yes, it is. Often these daily checks and lighter checks are called servicing. We do not really consider them maintenance. It is line maintenance we are talking about. I would hope that Qantas would see the need to ensure that the heavy maintenance component is kept as much as possible in Australia, and I hope I have impressed on the committee the importance of that.

Senator CHAPMAN —There is no heavy maintenance work being undertaken at Avalon—is that right?

Mr Purvinas —There is quite a bit of work being undertaken in Avalon at the moment. I think two aircraft may simultaneously go through the facility at any one time. The public statements were that those aircraft were to be transferred to Avalon, but they were sent overseas. But, yes, they are currently carrying out maintenance at Avalon.

Senator CHAPMAN —Is it not true that heavy maintenance work previously undertaken at Sydney was in fact transferred to Avalon over a three-month period from March to May 2006?

Mr Purvinas —I believe it was one particular aircraft—and I am relying on my memory—that was midway through a check when they announced the closure of the facility. That aircraft continued until it was completed. Beyond that point in time, an aircraft was scheduled to go in over the period April to May, but I am not sure whether that aircraft went to the Avalon facility or whether it went overseas. Since the closure of that site we have had four to six aircraft serviced overseas, or the heavy maintenance checks—the D checks—carried out overseas.

Senator CHAPMAN —What is your understanding of what is planned for the future in terms of heavy maintenance at Avalon?

Mr Purvinas —I touched on it earlier. We are currently in negotiations with senior management about the viability of heavy maintenance operations in Australia. If they can see the price come down to somewhere near what they would pay in Asia, we believe that they would allow the operation to continue in Australia. They have said to us that they acknowledge that aircraft engineering in Australia is the best standard in the world, that they would like to keep it that way and are prepared to pay a slight premium for that work.

Senator JOYCE —Who said it was the best in the world?

Mr Purvinas —It was in discussions with senior Qantas management. Geoff Dixon and David Cox, the executive general manager of engineering and maintenance, said that they believe that the quality of the product in Australia is superior or equal to any facility in the world and that they would pay a slight premium to continue with maintenance in Australia. They would like to see heavy maintenance—

CHAIR —Are you prepared to work with them to get it down to five per cent?

Mr Purvinas —Yes.

Senator CHAPMAN —How many people are currently employed at Avalon in heavy maintenance?

Mr Purvinas —I believe there are about 800 at the moment, though that number fluctuates.

Senator CHAPMAN —One assumes they would be undertaking a significant amount of work.

Mr Purvinas —They are undertaking a significant amount of work, yes. That work has been undertaken there for the past five years and the amount of work has grown. The Avalon facility was opened approximately eight years ago and started off with one line of aircraft going through. Beyond that, we had the closure of line maintenance 2 in Sydney, which involved the 767 work. That work redistributed to a new site in Brisbane.

Additional work and labour were shifted around and taken out of the Sydney heavy maintenance site, transferred to Avalon until a point where we have had three, sometimes four, lines of aircraft running through there. Yes, they are doing quite a bit of work there. We would like to see it all in Australia. We understand the need for Qantas to send occasional work overseas when they cannot fit it into the maintenance program. Our concern is that passing the bill in its current form would allow Qantas to close down every single site in Australia and still meet their commitments under this bill.

CHAIR —What? So it does not meet the stated intention?

Mr Purvinas —The intention of the bill—and I will just pull it out—is to ‘ensure jobs and operations stay in Australia’.

CHAIR —So your interpretation of this is that the bill does not meet that?

Mr Purvinas —You can read this a number of ways. ‘Ensure jobs and operations stay in Australia’ could mean two jobs and one part of the operation in Australia—and 35,000 jobs overseas. I do not think that is the intention of the bill. The bill is there, hopefully, to ensure that at least half of the Qantas staff is employed in Australia. The way that it is currently written will allow a new team of Qantas management to send the entire heavy maintenance facility offshore, employ no engineers in that facility and keep something like catering onshore.

Senator JOYCE —Are you saying that the bill that we are currently considering, even if we pass it, would have little or no effect in getting the desired outcome—that Qantas or whoever runs the show in the future could still move all the jobs overseas and be compliant with the bill?

Mr Purvinas —They cannot move all the jobs overseas; they would have to keep two in Australia. That is back to the intention of the bill. They could maintain 25 per cent of the jobs in Australia and send 15 per cent to five different countries and still comply with this bill.

Senator JOYCE —Have you have suggested amendments so we can close that loophole?

Mr Purvinas —I have suggested some very short amendments. I will read the current part of the bill which concerns us and the two minor amendments that are needed to close that loophole. It is section 5(b). I am not sure what your version of the bill looks like, but this is from the version I am reading:

The facilities taken in aggregate which are used by Qantas and by any associated entity in the provision of scheduled international air transport services (for example, facilities for the maintenance and housing of aircraft, catering, flight operations, training and administration), located in Australia, when compared with those located in any other country, represent the principal operational centre for Qantas and its associated entities;

That is how it reads at the moment. The words ‘in aggregate’ show that they can take a snapshot of the entire operation and move maintenance overseas and keep catering onshore. They could keep maintenance overseas and send the call centres offshore. All we need to do is tack on the front ‘each of the facilities’ and remove ‘taken in aggregate’, and that would provide the protections that would ensure at least half of those or that the maintenance in Australia must be greater than that in any other country in the world. Certainly an additional suggestion, which I believe the pilots association have asked for, is to amend the words ‘those located in any other country’ with ‘with those taken in aggregate of all other countries’. I believe the AMWU says something similar.

CHAIR —Section 2 of the submission refers to the proposed amendment.

Senator JOYCE —It is an important point. I just wanted to make sure he got it on the record.

Senator FIELDING —Could I make a comment on this, as it goes to the writing of the bill. The Qantas Sale Act has been in force since 1992 and it has that clause that applies to Qantas. It does not apply to Jetstar. This bill makes sure that the Qantas Sale Act also applies to Jetstar. What you are proposing is tighter arrangements not just applying to Jetstar but also applying to Qantas as a whole. At the moment, as I said, the Qantas Sale Act applies to Qantas only and not to Jetstar. The bill as proposed makes sure that Jetstar has the same conditions as Qantas. What you are doing is proposing more stringent requirements to keep more jobs and services in Australia?

CHAIR —Senator Fielding, with the greatest respect, what the witness said was that if that is indeed the intention then the stated intention is not met. I am sure we understand what your bill says, whereas Mr Purvinas—

Senator FIELDING —I think the point that is being made is that it could go even further. That is the point.

Senator BERNARDI —I think it has been an interesting discussion, but we have talked a lot about Qantas and I want to drill down to Jetstar specifically. How many of your members are involved in heavy maintenance for Jetstar currently?

Mr Purvinas —I believe about 100 at the moment are employed through Jetstar, and that would not be just in the heavy maintenance facilities; I do not have a breakdown of how many of those are in line maintenance and how many of them are in heavy maintenance.

Senator BERNARDI —So that would be split?

Mr Purvinas —Possibly fifty-fifty. But the thing is that the Jetstar aircraft are a lot newer and their requirements for heavy maintenance checks at the moment are not necessarily the same as Qantas’s.

Senator BERNARDI —That is my second point: this inquiry is into Jetstar. The concerns that you have raised should apply to moving Jetstar heavy maintenance offshore. You have said that they have newer aircraft, there is a much reduced requirement for heavy maintenance and you have 100 people employed. Of course we are concerned for 100 people, but it is not quite the headline-grabbing ‘1,400 jobs going offshore’.

Mr Purvinas —A job to any one of those 100 people is as important as—

Senator BERNARDI —I absolutely understand that, but I think we have to put this into context, and that is why I wanted to drill down to the nub of the issue, which is Jetstar.

Mr Purvinas —What also happened recently, which touches on what you have had to say, is that a number of A330 aircraft got transferred to Jetstar from Qantas. Those aircraft are now having heavy maintenance checks in Manila. If those aircraft were—

Senator BERNARDI —They are the long-haul aircraft, are they?

Mr Purvinas —Yes, the Jetstar long-haul aircraft. I believe there are four A330 aircraft. They are currently having their heavy maintenance checks in Manila, which is something that we would like addressed and, hopefully, to have that work come back to Australia. Again, I have stated it several times—

CHAIR —Please keep the questions and answers brief.

Senator BERNARDI —I just wanted to encapsulate the issue that we are discussing here, and that is what it is. You have done that very well, Mr Purvinas; thank you for that.

Senator WEBBER —Qantas gave us some further material that Senator O’Brien talked about, but I want to go to the question I asked them. In the first document that they tabled this morning they say:

Qantas has used the services of Singapore International Airlines Engineering Company (SIAEC) and Singapore Technologies Aviation Services Company (SASCO) for adhoc overflow …

Does your association regard the current practice as ‘ad hoc’? Maybe ‘ad hoc’ means something different in the airline industry than it does to me.

Mr Purvinas —Yes, ‘ad hoc’ in our industry basically means last minute or unplanned maintenance. Aircraft maintenance up there in Singapore at the moment is ad hoc because the Avalon site was not ready to carry out heavy maintenance checks. So, yes, that is probably close to the mark.

Senator WEBBER —And they say that is about 10 per cent.

Mr Purvinas —Yes. I said earlier that—

Senator WEBBER —Then they tell me that they think the 10 per cent is going to continue, or it may come down.

Mr Purvinas —Yes, 10 to 20 per cent. We do not have any objections to that because we do understand the importance of keeping maintenance efficient in Australia so that we continue to be the world leader in this industry, which we currently believe we are. With aircraft maintenance, you do not want gaps in your program and your workforce setting higher. So if there is a bit of overflow and10 per cent cannot be carried out in Australia we do not usually object too harshly to that.

Senator WEBBER —But 10 per cent is about the mark?

Mr Purvinas —That is the current mark, yes. I did say 10 to 20 per cent, so it would be in that vicinity.

Senator WEBBER —Okay. Thank you.

Senator JOYCE —I just wanted to query a couple of things. You said that the expertise of a qualified maintenance person in Singapore is comparable to the expertise of such a person in Australia. Is that right?

Mr Purvinas —I know the licensed aircraft engineers in Singapore have an apprenticeship program and that there is a substantial lead period before they become licensed; I certainly would not want to say anything bad about an individual engineer in Singapore.

Senator JOYCE —That is fair enough. I am really just trying to get to the details. But you were also saying that basically they make this up by getting a lot of unqualified people to come in and work on the plane.

Mr Purvinas —Yes.

Senator JOYCE —How can they do that? Isn’t there a law or something that says they are not allowed to do that?

Mr Purvinas —The law is that you must comply with the airworthiness legislation—

Senator JOYCE —Of the country.

Mr Purvinas —of the country, but in the case of aircraft going from Qantas overseas, they do send CASA surveyors. I am not sure to what extent these people oversee, or how long they are there for. The aircraft are there for six weeks and I am pretty sure that there is not a CASA surveyor there for six weeks.

Senator JOYCE —Would they be in breach of Australian CASA regulations? For instance, if we have a CASA surveyor over there who looks and says, ‘That guy is out of Changi prison so he shouldn’t be there,’ couldn’t they be in breach of Australian laws? And so wouldn’t CASA say, ‘Sorry, that is illegal; you cannot service your planes there’?

Mr Purvinas —I am not quite sure what the extent is of CASA’s knowledge of the operations in Singapore, so what they have established from their observations is a bit unsure. I do know that, from a report that was posted on the Qantas intranet site—a monthly report of overseas operations—there were a substantial number of errors or maintenance problems that occurred in the Singapore site and this is something I would assume CASA are investigating at the moment. To what extent they do that I am unsure.

Senator JOYCE —In light of the very unfortunate events of the previous week, the statements you make about ‘seeing the daylight through the—’ are obviously very highly charged in the current environment. I want to try and keep it Australian. But to bring some balance back into this, have you got any horror stories about airlines that have been serviced in Australia where you have found problems as well?

Mr Purvinas —Certainly there have been errors on aircraft that have been maintained in Australia but, because you have such a high level of licensed engineers, that is kept to a bare minimum and is certainly not to the extent that we see from overseas.

Senator JOYCE —Right; that is the point I am getting at. Do you have quantifiable evidence that there are more problems with aircraft coming back from Singapore as opposed to Australia? Believe you me, as you know, and as is on the public record, I am on your side. But I do not want to be backing something that is purely anecdotal; I want you to be able to quantify it. Can you quantify it?

Mr Purvinas —Right here and now I cannot pull out a report from my pocket that says, ‘All the aircraft serviced in Australia have two errors and every one coming back from Asia has 40.’ All I can do is comment on reports that have been issued to me verbally and what I have seen through my experience. I have made errors on aircraft before, but they have been picked up by someone looking over my shoulder. In Singapore, we are seeing an enormous number of errors.

CHAIR —I am sorry; we are just going down the same path again. Can we get back, please, to this bill. We are just repeating the same thing. If you have that information, provide it; if not—

Mr Purvinas —I cannot provide that information right here and now, but if you would consider it—

Senator JOYCE —I would be very interested in it, because it is crucial information if you have got it.

Mr Purvinas —I will try and send you something.

Senator JOYCE —Thank you.

CHAIR —You are not suggesting that prisoners are carrying out maintenance, are you?

Mr Purvinas —The prisoners are on day release from Changi prison—

CHAIR —They are washing—

Mr Purvinas —washing the underbay. The underbay gets—

CHAIR —I just want to make absolutely sure that you were not suggesting that, because the press will run with this if you are making an allegation that they are maintaining aircraft. That is not the situation, is it?

Mr Purvinas —No. They are preparing them for maintenance.

CHAIR —Yes, okay. Thank you.

Senator FIELDING —But I think, on the whole, it would be of concern that they even have access to the aircraft.

CHAIR —Presumably they only get into airports if they have some form of security check. I think we need to take a bit of a grip on ourselves in relation to this.

Mr Purvinas —Just to clarify that, those reports were from—

CHAIR —The facility at Newcastle is a maintenance facility. What are they doing?

Mr Purvinas —Jetstar aircraft—A320s.

CHAIR —Yes; what sort of maintenance are they carrying out?

Mr Purvinas —I am not sure if they have started C and D checks on the aircraft, because they are relatively new aircraft—

CHAIR —So they will be doing D checks, will they—heavy maintenance?

Mr Purvinas —Yes.

CHAIR —So this is a $29 million new facility, is it?

Mr Purvinas —I am not sure how much it cost them, but it is a new facility and it is work that is currently planned to be carried out in Australia and—

CHAIR —It is hardly an indication of a company that is madly rushing off to have maintenance done overseas when it is spending $29 million on the facility in Newcastle.

Mr Purvinas —It is a bit hard to say what is going to happen in the future when they are advertising for new opportunities in Asia.

CHAIR —No—they have built the facility; you have just said it is for heavy maintenance; it would not be an indication of a company that is madly trying to move everything offshore, if they are investing that sort of money in Newcastle, would it?

Mr Purvinas —The aircraft that they are maintaining in the Newcastle facility do not fly outside Australia, so it makes money sense for them to carry out their heavy maintenance there.

CHAIR —There are 900 people working at the Avalon site; is that right?

Mr Purvinas —There are roughly 800, possibly 900—it fluctuates.

CHAIR —It was put to us this morning by Qantas in the document they tabled:

The Lufthansa facility in Manila … has 454 Mechanics in the Aircraft Overhaul division. This resource provides coverage across two maintenance lines.

The line that is carrying out the work for Qantas on the A330 aircraft have 64 appropriately Qantas trained, licensed/approved engineers providing certification and oversight for 195 non Qantas trained and approved Mechanics. This represents a “Licensed to Unlicensed” ratio of 32:68.

Mr Purvinas —I think some of the key words you have mentioned there have to be looked at and examined further. You mentioned the word ‘approval’ there at some stage—was it ‘Qantas approval holders’?

CHAIR —It was:

…licensed/approved engineers providing certification and oversight …

Mr Purvinas —Yes. The approved people are not licensed aircraft engineers. They are mechanics who have been given a one-off approval to certify for certain tasks. They are not licensed aircraft engineers. So they have clumped in a group of unlicensed aircraft engineers to quantify their position.

CHAIR —I will perhaps provide an opportunity after this, not today, for a very quick reply in writing. You have managed to squeeze longer out of us than anyone else today, Mr Purvinis; I suppose I should congratulate you that for that! Thank you very much for your time.

Mr Purvinas —Thank you very much for giving me the opportunity.

[12.17 pm]