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Pilot training, airline safety and the Transport Safety Investigation Amendment (Incident Reports) Bill 2010

CHAIR —I welcome Captain Bryan Murray and Mr Terry O’Connell from the Australian Federation of Air Pilots. Is there anything you would like to add about the capacity in which you appear today?

Capt. Murray —I am a 737 captain with Virgin Blue, based in Melbourne.

CHAIR —The Australian Federation of Air Pilots has lodged submission 41 with the committee. Do you want to make any changes or additions?

Capt. Murray —No, we do not.

Mr O’Connell —Late yesterday evening, we did send in a supplementary submission. I am not sure if that has hit your desks yet.

CHAIR —Yes, here it is.

Mr O’Connell —I apologise for the late notice on that. It has arisen out of comments that we have received as feedback from the membership, and we thought that it was appropriate to provide it. It is personal and anecdotal, but it may add something to your committee through the course of your deliberations.

CHAIR —We will accept it as tabled at this inquiry; is that all right with everyone? Thanks. Do you have an opening statement?

Capt. Murray —I have, thank you. Essentially, throughout the AFAP’s submission we emphasise our support for measures that build and support the internal training capability of airlines and operators in general. We recognise that pilots enter the high capacity airline industry from a variety of sources, including general aviation charter, flight instruction, regional airlines and, of course, the military. Our strong preference is that the endorsement training of those pilots by the airlines be conducted in-house, and for that in-house training to be supported by a solid internal experience base and a sound check and training system. We do, however, recognise the advent, particularly over the last 10 years, of third-party training providers, but would fully support those providers being regulated to the same standards as those that apply to the air operator certificate holders. Thank you.

CHAIR —We will now go to questions.

Senator O’BRIEN —I note, Captain Murray, that you are a pilot with Virgin?

Capt. Murray —Yes, I am.

Senator O’BRIEN —Could you let us know the state of representation of the Australian Federation of Air Pilots amongst the Virgin pilots?

Capt. Murray —I will defer to the executive director for the most recent numbers.

Mr O’Connell —In relation to Virgin Blue and representation, the federation was the initial union representing pilots within Virgin Blue. We still cover approximately 60 per cent. VIPA is another organisation that has recently formed, and I noted that they were to attend but they have not attended, so it is obviously a decision that they have taken. We are respondent to the Virgin Blue pilots agreement, and we represent pilots in both Virgin Blue and V Australia. We certainly have regular—and I mean monthly—meetings face-to-face with the company on industrial matters. That includes issues such as rostering, fatigue and ‘back of the clock’ type of operations.

Senator O’BRIEN —Do you believe there is any pressure on you not to attend an inquiry such as this?

Capt. Murray —Absolutely not.

Senator O’BRIEN —Virgin knew before today that you were coming?

Capt. Murray —I am not sure that they were aware, particularly, but I would suggest quite clearly that they would have no problem with my attendance as a Virgin Blue pilot nor with my representing the federation here today at the inquiry.

Senator O’BRIEN —Given your personal knowledge, what comment would you make about Virgin’s pilot training systems?

Capt. Murray —I would regard their training standards as exemplary. I have been with Virgin Blue for eight years and only six months or so after I started with Virgin in 2003 I was appointed a training captain. As I am sure you would all know, that involves the line training that is on normal operational flights of both intake first officers to fly the 737 and it also involves my shifting seats, so to speak, on the flight deck to conduct the command training of incumbent Virgin Blue pilots.

Senator O’BRIEN —You are critically involved in the training of incoming Virgin pilots?

Capt. Murray —Yes, I am.

Senator O’BRIEN —For how long have you been doing that?

Capt. Murray —For 7½ years.

Senator O’BRIEN —In terms of that program, we have had some evidence with respect to whether we need 1,500 hours of training or whether we need a competency based system. Can you give us your views on those somewhat competing views?

Capt. Murray —As the federation has put forth in its submission, we do not see that an increase in the hours to 1,500 hours, along the same lines as the FAA, would be of any great benefit to the industry. As a Virgin Blue training captain, I rely upon, and more than readily rely upon, the company’s recruitment of pilots whom they consider will make a successful transition to flying the company’s aircraft.

Senator O’BRIEN —So it is a competency based rather than a time-serving approach?

Capt. Murray —With the line training requirements, there is a minimum number of sectors allocated to the line training of either an incoming first officer or a command upgrade, as it is called. As far as that is concerned, if I as a particular pilot’s training captain get to the stage where I consider that that pilot is not ready to be assessed by a check captain within the airline, I approach the training department which Captain Haynes, who was sitting in this chair a few moments ago, heads. I will explain my concerns and we jointly work out a way where that training will be extended to the time that I consider I am happy with that pilot.

Senator O’BRIEN —So essentially it is competency, not time?

Capt. Murray —There are both in there.

Senator O’BRIEN —Obviously you have to do some time to get the competency, is what you are saying?

Capt. Murray —Yes.

Senator O’BRIEN —But arriving at a set number of sectors or hours or whatever does not guarantee that they have qualified in terms of their competency in your eyes?

Capt. Murray —No, it does not.

Mr O’Connell —If I could interpose there, it has been an issue with Senator McGauran today as well: you can be competent to get your drivers licence right at the very start; it is the real-life experiences you get from the hours that you accumulate thereafter that make you the driver that you finish up being.

CHAIR —Especially when something goes wrong, you work out whether you are good.

Mr O’Connell —That is right. If you get something coming at you in the middle of the night, and you have not had that experience and you have just picked up your drivers licence, that is the sort of framework it is in. The Qantas pilots in the A380, the check pilots, the experience that they had accumulated over the years, had they been there with 200 hours, I am sure the outcome would have been tragically different.

Senator McGAURAN —Is it 200 hours or 300 hours?

Mr O’Connell —It is 150—there are lots of figures, and we have seen today how figures can be played around with.

Senator McGAURAN —Absolutely.

Mr O’Connell —I think the minimum is 200 hours in a non-integrated, for the commercial pilots licence, and it does involve some various criteria. Certainly that is the bare minimum. It is just the same, as I say, with the young boy or the young girl driving the car on the road for the first time. Sure, they can go out there and do the job, but let us just hope that there is not too much wet traffic or things happening along the road as they drive that first night.

Senator O’BRIEN —That is probably what every parent thinks. I will take you to another area that we touched upon with the Regional Aviation Association, and pilots who come through that sector that are obviously being picked up by the larger companies as they move up the line through to the Virgins and perhaps even the Qantases, and overseas airlines. Should there be some compensation for the airlines that have played a part in the process? Should there be some sort of bond, arrangement, transfer payment system or something that means that regional aviation is not disadvantaged by what is a common career path for pilots?

Mr O’Connell —That debate has waged for the 30-odd years that I have been involved in the industry. There is no easy answer. Personally, whilst we are talking about cadetship schemes and all that sort of thing, and the moneys that companies are prepared to pay for cadets, perhaps there is a better way that some of that money could actually go back to the industry at that lower level in general aviation. It does raise the issue of the academic side of things and whether there is relief for aero clubs. We are seeing aero clubs dying all around Australia. What is tending to happen is that, because of the various costs associated with flying training, it is being pushed down now into the ultralights; people are getting their buzz of flying ultralight aircraft in a recreational area, and that is reducing a lot of the people that may have been able to instruct in the aero clubs.

Senator O’BRIEN —Some might say it reduces the number of pilots ultimately because of the safety or lack of it in that area.

Mr O’Connell —That is right, and then you are then starting to put more emphasis on cadet schemes. As we have said in our submission, there is nothing wrong with cadet schemes but they are not the true answer. I know that Senator Heffernan is a little taken by the Rex cadet scheme. It certainly has its advantages, but if there comes another vortex of sucking pilots out because of the Middle East or Virgin or Qantas, all of a sudden the same problem that Rex found in 2008 will appear again because everybody will disappear again, once they have had their seven years.

CHAIR —What is the answer in pilot training? If you do not do it with cadets and you do not do it with bush pilots, how do you train them?

Mr O’Connell —I am saying it is going to be that total mix. There is no simple solution. The cadets are not the simple solution. It is a mixture that we need to encourage flying training throughout the full range—the military, the general—

CHAIR —If Rex had said you could do that, they would go out of business. Virgin were here a minute ago; they pinch their pilots as quick as they can.

Mr O’Connell —That is right, but in the end pilots will make a decision, rational or irrational, monetarily driven or not, to go to a bigger aircraft. That is just the nature of the career path, and all that a cadet scheme does is tie them down financially. It does not handcuff them to the Rex aircraft. When the vortex happens, then those pilots disappear and we are then left with the same problems of inexperienced captains with inexperienced first officers in an operation such as Rex.

CHAIR —So the Jetstar cadetship is $202,160.50; is that a fair thing?

Mr O’Connell —No. I do not have the money to put my son through it, if you are asking me.

Senator O’BRIEN —I thought we had evidence that there was a payment system in New Zealand which was about $11,000 a year for seven years. Are you saying it is much more than that?

Mr O’Connell —They are the figures that have been presented to us from within Australia. Senator Milne asked some questions earlier about the New Zealand situation, and I think that the figures quoted by Mr Buchanan were in New Zealand dollars. I do not think they were in Australian dollars.

CHAIR —Yes, 67 would be NZ$1.32 or $1.33 to the Australian dollar. So you would soon figure out what that really is.

Mr O’Connell —Our rough reckoning is that the Jetstar New Zealand and probably Singapore are between 30 per cent to 40 per cent lower than the equivalent Australian Jetstar pilot. It is significant and it is a major industrial concern. We have pointed that out. In our submission, we pointed to the Virgin group with their Pacific Blue and the way that they allocate flying around. It is a major concern for Australian workers.

Senator McGAURAN —I recall Qantas telling Senator Milne, I think, that that was not the case.

Senator O’BRIEN —No, they did not say that. They did not mention the exchange rate. They talked about the rate in New Zealand. I think you will find that is what the Hansard will show.

Senator McGAURAN —There was a lot of playing with words.

Mr O’Connell —I think there was a lot of smoke and mirrors.

CHAIR —Now you know how Australia’s farmers feel.

Senator O’BRIEN —That is another subject and too broad for this inquiry.

Senator McGAURAN —I do not think anybody could know how Australia’s farmers feel except the farmers.

Senator O’BRIEN —Is it fair enough for airlines in this environment, where they put a substantial amount of money into training, to require some financial commitment or time commitment from pilots who undergo such training?

Mr O’Connell —We are not opposed, and we have it in our various agreements. We have bonding as part of our agreement to give some form spread out over three years. We do not see that that is an issue. The Virgin group of pilots have bonds associated with their endorsements. In general terms, that does not concern any pilot who is staying. There might be some who have principled objections to it, but in general terms the run of the mill pilot will accept a bond on the basis that if he is in a Virgin or a Jetstar, generally they will stay and they will just work out the endorsement cost. They will accumulate the hours, and then if they want to go to an Emirates or wherever else they might want to go, they will go eventually anyway.

Senator O’BRIEN —Do you agree with the view that the major airlines, Qantas and Virgin, put that they have a very low turnover rate, that people usually stay?

Mr O’Connell —I believe that is a fair comment. They are the top of the chain in Australia, and most Australians prefer to live in Australia. There are many, many Australians in the Emirates, Singapore and Hong Kong, but in general terms most people prefer to live here.

Senator XENOPHON —Thank you for being here and for your evidence. There are basically two unions that represent Virgin pilots. Do you mainly represent Virgin pilots, or only represent Virgin pilots?

Mr O’Connell —We are the respondent to this agreement, and when we come to sit down to renegotiate this agreement this year, we will be sitting down with the other pilot organisation. Just the same as with Jetstar, we represent a certain number of pilots there and Captain Woodward’s association, the AIPA, represent a certain number of them as well.

Senator XENOPHON —So it is Virgin and Jetstar pilots; do you represent Qantas pilots as well?

Mr O’Connell —We do not represent Qantas pilots in the international or in the mainline domestic, but we do represent the QantasLink pilots flying the Dash 8 aircraft.

Senator XENOPHON —So you cover a number of pilots from Virgin, QantasLink and Jetstar. Are there any others?

Mr O’Connell —Rex, Airnorth—

Senator XENOPHON —So you have a pretty wide coverage?

Mr O’Connell —We cover virtually everybody other than Qantas mainline and international.

Senator XENOPHON —So you can give a broad range of views from the regional carriers to the mainline carriers?

Mr O’Connell —As well as anybody probably can at the moment.

Senator XENOPHON —I appreciate that. I am just a bit concerned about the content of your supplementary submission. You have quoted one of your pilots, who says about instructors:

The lack of an airline’s own instructional force involved in type rating training procedures produces a significant and measurable lack of depth in the instructional staff. Today’s sim instructors have never taught the vast majority of potential non-normal sequences. Intellectually they will know how the aircraft and systems are supposed to behave in the various non-normal conditions documented in the manuals, but they won’t have seen it happen nor watched other pilots dealing with them.

I find it quite alarming that one of your members is saying that.

Mr O’Connell —That is a comment from one of our members who is an instructor in an operation, and that is how he feels. That is why we wanted to put that in.

Senator XENOPHON —Do you endorse those comments? They are quite alarming.

Mr O’Connell —We do endorse those comments. They do not necessarily apply to all of the airlines in Australia.

Senator XENOPHON —We heard evidence earlier from Jetstar about the pilots who are trained for the A320s in the Boeing flying school, and it was acknowledged that some of the trainers on the A320s themselves have not flown the A320 but have been endorsed on them. Is that satisfactory, or do you think if you are going to be a training instructor, you should have actually flown that aircraft type?

Mr O’Connell —I might defer to Captain Murray on that, because there needs to be a bit of an explanation.

Capt. Murray —I personally consider it highly desirable that, if I was an ab initio person in the simulator, the person who was instructing me had actually flown the aeroplane as well. I do qualify that statement by saying that, particularly with Boeing Alteon, there are highly experienced pilots who have been captains for 30 or 40 years in operations both in Australia and outside Australia, and they might have flown, say, the 777, the 737 and in Jetstar’s case, they transfer to the A320.

Senator XENOPHON —I am just going on what pilots have told me. There is a big difference in terms of the systems between an Airbus and a Boeing. They are quite different aircraft.

Capt. Murray —Certainly they are.

Senator XENOPHON —You may want to take this on notice and think about this, but would it be unreasonable to mandate that if you are a training instructor for a particular aircraft type you must have at least not only been rated for that aircraft type but have also flown that aircraft before you train others in terms of that ab initio training you refer to?

Mr O’Connell —Are we talking ab initio or recurrent?

Senator XENOPHON —Put it this way: if you are training someone up on an A320, and you actually have not flown an A320, and you are the instructor, is it unreasonable for that to be a requirement, given that there is a big difference operationally in the systems between Airbus and Boeing?

Capt. Murray —I do not think it is an unreasonable suggestion. I do not necessarily support it.

CHAIR —It would seem to make common sense?

Mr O’Connell —It does. As an example, in the established internal as opposed to the third-party providers, there are simulator instructors in Qantas who may not have flown that aircraft that they are actually instructing on. I refer to the pilots who may have retired, for instance. I do not know whether they have had Airbus experience or Boeing experience or whatever, but it is not unusual sometimes in house to have somebody who might not have actually flown the aircraft. But when you put it in the context of the whole training regime within an organisation like a Qantas or a Virgin, you feel much more secure not having had that full background on the two aircraft types, in this circumstance the Boeing and the Airbus.

Senator O’BRIEN —I did not go to the Qantas simulator visit that other senators attended, but, Captain Murray, with regard to simulator experience versus flight experience, how would you value the two in terms of the ultimate training? In other words, is flying where you are actually at risk versus flying in a simulator a much better training experience?

Capt. Murray —In response to your last proposed question to me, I consider that the simulator is an outstanding training aid and we obviously can do things in the simulator that we would not even think about doing in the aeroplane. I personally consider that the simulator is more difficult to fly than the aeroplane, as good as the simulators are. It is different, but I am sure that, having had simulator training on the 737 simulator and recurrent training, if the same thing happened in the aeroplane I would more than capably handle it because of the training that I regularly get from Virgin Blue.

Senator NASH —This is probably an obvious question but surely the simulator would have the benefit of creating very difficult situations that pilots then have to cope with that you otherwise would not in just ordinarily flying a plane?

Capt. Murray —Yes, it does.

Senator XENOPHON —Referring to your pilot’s quote, he finished this part by saying:

Type training is a hot house of learning in a concentrated environment where the potential to learn as an instructor is tremendous. I believe the loss of this environment for the airline’s instructors is a significant safety impact.

I take it that you endorse that?

Mr O’Connell —We do. The thrust of that is about keeping in house your training skills.

Senator XENOPHON —Referring back to Senator O’Brien’s line of questioning, and the question I asked you earlier as to whether it should be mandated for a person who is a trainer to have actually flown the aircraft that they are training people on, would it be fair to say that you are saying it depends on the circumstances in terms of the nature of the organisation and the level of training? But, if I can put it to you in these terms: if the only training for that trainee pilot is going to be via the simulator before they get into the right-hand seat and the person training them has not actually flown that aircraft, in those circumstances would it be desirable to ensure that the trainer has actually flown that aircraft type?

Mr O’Connell —It would be far more preferable, far more preferable. I do not know whether you could mandate it. I am not sure how it could ever operate mandated; legislated, perhaps, but it would be far preferable.

Senator XENOPHON —With respect to the amendment and the general principle of immunity, do you support that there ought to be some entrenched or legislative immunity for pilots that report incidents to enhance a just culture?

Mr O’Connell —Yes, we do. We have to go on and say that we are quite comfortable with the current system as well. We do not have any issues at all from our experiences in relation to the ATSB. From time to time CASA has that dual role of being a regulator and a safety authority as well, and we have run into issues over the years in that realm, but in terms of enhancing immunity, we would support that.

Senator XENOPHON —In their evidence, such as it was, Virgin indicated that they already do that sort of thing. It is not inconsistent with the legislative framework, although they did not have authority to give a view on it in the end, which was a bit poor, but from your point of view, enhancing that and giving some legislative safeguards would not be a bad thing for pilots?

Mr O’Connell —No, we would totally support that position.

CHAIR —I would have thought, reading this pilot’s contribution from your submission today, that there are a lot of problems. He said:

Today’s low-cost carrier instructor will never see the type of transition training other than their initial conversion on the course. They will never see this training as an instructor; they will never benefit from seeing the mistakes made by multiple students, in other words observing the human failure element of what can go wrong.

I would have thought this was pretty condemning. He adds, ‘Apart from cost offsetting, there are two major impacts of the non-use of an airline’s own instructor’—in other words, a third-party instructor. Do you think third-party providers are providing a lesser product?

Capt. Murray —I do not think that they are providing a lesser product. We as an organisation recognise that third-party providers have existed for quite some time now. They are part of the industry, but we would like to see them roped in to be included in the regulatory oversight area by CASA, and the same sort of regulatory oversight that—

Senator XENOPHON —It’s the fault of CASA now, is it?

Capt. Murray —No.

Senator XENOPHON —Is that a gap in our system?

Mr O’Connell —It is a huge legislative gap.

CHAIR —This actually says, ‘The lack of quality product produced by such training is obvious by the additional testings required after the type rating course.’ I would have thought, reading into this, there is an amber light flashing?

Mr O’Connell —Our position is that third-party providers are a necessary evil, for want of a better expression. We would far prefer to see products trained in house. We are accepting of the position of third party—

CHAIR —But the third-party providers sort of have some protection from indemnity, as it were, because they pass them on to an airline somewhere. If they manage to crash the plane because they did not get it right, it is not their problem; the third-party provider gets paid to put them through.

Mr O’Connell —As that submission states, in the end the airline has to tick off on the final product that goes out on to the line, and that is where there is a question mark as to how cost effective these third-party providers are from time to time. Third-party providers vary from time to time as well in terms of the skilled instructors that they may have. Skilled instructors are also sucked out when there is a shortage of pilots. All of a sudden, your Hong Kong operation might pay three times the price that is available to Australia, so people will go up on a 12-month contract.

CHAIR —What do you think is wrong with Kendell’s system?

Mr O’Connell —Rex’s system?

CHAIR —Sorry, Rex.

Mr O’Connell —I am a great admirer of Don, and I am sure that Don would be pleased with the cadet system. All that I am saying in relation to the Rex system of cadets is that—

CHAIR —Do you represent their pilots?

Mr O’Connell —We represent pilots employed at Rex. We represent pilots employed in most operations in Australia.

CHAIR —Is it compulsory to be a member of your set-up?

Mr O’Connell —Unfortunately not. If there is some legislative relief in that area, we would accept it.

CHAIR —What percentage generally would you get of Rex pilots, for example? Would you have half of the pilots?

Mr O’Connell —We would have over half. I am not quite sure how many members we have there.

CHAIR —What is wrong with it? Why would Don Kendell turn in his grave?

Mr O’Connell —He would not. I said earlier that I think he would be satisfied with the system. Don would still be getting pilots from outside of the system to give a hybrid. I disagree with Jim Davis and Chris that the products that come out of there are perfect. You do need some all-round experience from time to time in those seats, and the reason that they embarked on this cadetship was that they had been severely damaged in 2007. In 2012 or 2013 or whenever our next rush comes along, they will find themselves in the same circumstances. The cadet scheme will not overcome all of their problems. They will still need to go and look for recruits from everywhere.

Senator NASH —Are you saying that you need a mix because the cadets are more likely to go on to somewhere else, or why do you need the mix?

Mr O’Connell —They hold the pilots for six to seven years. They are handcuffed for six to seven years. If there is no movement in the industry around that time, it does not really matter. These pilots will stay there anyway. When you are moving your cadets through, the cadets come to the stage where all of a sudden there is a boom and you lose your experienced cadet pilots. They have all gone, so the next group move up, and they have to make a decision: are they experienced enough to put into the left-hand seat? Depending upon how quick the recruitment phase is, the answer is no, because they will be very low time. You will have low-time captains, low-time first officers.

CHAIR —But isn’t the answer to that to have some regulatory transition from the right-hand seat to the left-hand seat?

Mr O’Connell —They generally have it, and that is why they go externally. We are seniority based, and we still believe that seniority and the accumulation of experience is as good a system as there is. Remember that seniority only gives a pilot the opportunity to bid on to the aircraft and the opportunity to train on it.

CHAIR —Isn’t the problem really that people like Virgin, who would kill for the pilots, should actually train them the same way as Kendell does? Isn’t that the problem?

Mr O’Connell —In a cadet scheme from day one—

CHAIR —It could be that if they fill the joint up at Rex, they could start training Jetstar people.

Mr O’Connell —There would still be movement; pilots would still move.

CHAIR —Yes, there would still be some movement, but this is an endemic problem of pilfering, and you cannot blame anyone for that. The system is built for it. If Jetstar had a similar scheme, it would equalise the market a bit.

Mr O’Connell —Jetstar does have a scheme—not the same. I do not think there is an easy answer. I am not sure how I answer the question, to be honest.

Senator NASH —Talking about the cadets, and I understand what you mean when you get to a point where this level of cadets is enticed to move on, but are they any more likely to move on than a pilot who has come to an airline through a means other than cadetship?

Mr O’Connell —No, but it comes back to that competency versus hours again. People will move into that left-hand seat from, say, the Brindabella Airlines. They will move into Rex because there is more money in a Rex on that aircraft type. So there is movement of more experienced people into those groups. There is movement. As I was talking about the seniority system, from time to time direct entry captains come in. We prefer to see the first officers move into the left-hand seat, but from time to time when there are shortages of those experienced people, direct entry captains do move in—as happened, for example, in Virgin in its earlier days in 2004 and 2005, when there was a rapid growth because the first officers at that time just did not have the experience levels to move into the left-hand seat, so the company went externally.

Senator NASH —Is your worry that if it is cadet-only, an entire cohort of cadets will leave an airline and leave them with too few experienced pilots?

Mr O’Connell —They could.

Senator NASH —But that is your concern?

Mr O’Connell —Yes.

Senator NASH —I am just trying to drill down into what the concern actually is of that happening?

Mr O’Connell —Yes. I am talking about a hypothetical situation.

CHAIR —Surely the difficulty with your proposition is that if there is a natural inclination to go to the bigger plane and if Rex got a mixture from somewhere else, they will still want to transition to the better plane anyway. We heard an example this morning of someone who trained a guy, gave him his endorsement, spent $20,000 on him and in six weeks he flicked over to Jetstar.

Mr O’Connell —They will, and I do not know how you stop that. We try to slow it up through agreements with the airline companies on bondings to try to give some money back, but in the end, if a pilot is on a salary of $70,000, $80,000 or $90,000 and has the opportunity within two years to be on a salary of $180,000 or $190,000, he will pay the $20,000 or $30,000 to go out. He will just go. It is a difficult area. In the end, if there is the attraction of a better lifestyle or a better remuneration package, pilots will leave.

CHAIR —Except that it costs a lot less to buy a house in Junee than it does next to Mascot, I have to say. There are offsets.

Mr O’Connell —There are offsets, and that is why I think in Australia we are lucky that even Rex, when it was gutted, still managed to keep some of its senior pilots because either they live in Junee and like Junee or the salary still is reasonable for them, or the nature of the regional pilot not having to be away from home appeals to them, or whatever it is. There are various other factors that come into play.

CHAIR —Most of the branch lines are gone now for trains, so we would have to go back to horse and bloody sulkies if we lose this. The generic problem and the perception out there in the community of airline safety—and there has obviously been a lot more with communications, et cetera; there is a lot more publicity when things go wrong—is that there have been more incidents in recent times. As an observer of the contests between lowering costs, with the $50 from Sydney to Port Douglas-type thinking, and reputation when you are competing against what you would call more ‘cowboy practice’ airlines, not necessarily Australian, where do you think that will finish?

Mr O’Connell —I do not know.

CHAIR —Do you think it is a problem?

Mr O’Connell —If we go back to the 1980s and we talk about deregulation and all that sort of thing, I think there was an assumption by the legislators at the time that the airline industry was rational. The airline industry is not rational. Certainly we have benefited, as Mr Joyce and Mr Buchanan said, from productivity and technology gains. The reality is there comes a time where all of that runs out, all of the cost-cutting catches up with us all, and we will have problems. As an example, if an Emirates decided to come into Australia now domestically and operate and put in some decent equipment, we would be gutted and some of the operators here would be gone.

CHAIR —But I would not make too many predictions about any of the airlines from the Middle East. That might be all about to change.

Mr O’Connell —May be. I am saying the nature of the deregulated environment is unstable. Jetstar was offering a 1c fare yesterday. There is just absolutely no sense to it.

CHAIR —I agree with you. The inevitability will be that planes will start falling out of the sky.

Mr O’Connell —And it is popular for the public because it is cheap fares, but in the end it will catch up with us.

CHAIR —The great difficulty really is the concept of sovereignty as we have known it is disappearing. It is a global thing now.

Senator McGAURAN —I want to return to the rostering. You would agree that rostering, for airline executives, is a balance between safety and savings. They have to get that balance right. I was really disappointed in my questioning of Virgin. I thought to get that balance there would have been certain restrictions that the executives forced upon themselves to make sure that on the safety side you are not introducing the fatigue factor, such as too many ‘back of the clock’ situations or rostering. From their answer, I gauged there were no criteria and no restrictions. One pilot might do a whole lot of it and, unless he looked fatigued, it would continue. That was just my impression from his answers. But certainly there are no set criteria as to a rostering system where you can push your crew and push your pilots too much in rostering. In regard to ‘back of the clock’ rostering, is there any sort of restriction written into the award or into the safety manual where too much is unsafe?

Mr O’Connell —Yes, there is. We spent some considerable time on the work rules for this agreement. They are not perfect, and we do build in some protections to address major issues on ‘back of the clock’. The ‘back of the clock’ themselves, as an example, might not be so much of a problem; it is when you have a ‘back of the clock’ with an early start the following day. It is those sorts of issues that throw us. We have pilot representatives in the rostering and pairing committees looking at it before the rosters go out and reviewing them after the rosters are flown. Pilots have the ability to put in fatigue reports, and the union encourages them to do so. It is actually stipulated in the agreement.

 I am looking here at the Virgin Blue work rules appendix 1, and A1.1.5—‘limitations on consecutive early starts, late finishes and night duties.’ We do cover them off. We have a fatigue risk management system which has three levels within Virgin, and we are comfortable that we can address most of the problems. The question of fatigue and tiredness is a very complicated one, and it is one that we could probably sit here and talk about until Monday or Tuesday of next week without a break. It is not perfect. We have systems. We have knocked off a number of pairings where ‘back of the clocks’ have been prohibitive, and we have had some success with the company. We think we could probably do a little bit better in these areas, but the pilots in Virgin Blue are not frightened to put up their hand and say, ‘I’m fatigued.’

Senator McGAURAN —So the companies are not pressing for inhospitable rosters, if you like?

Mr O’Connell —The companies occasionally publish rosters with inhospitable pairings in them. Fortunately we have the ability to knock those inhospitable pairings on the head, and we do that. One of the major changes that has come about as a result of low-cost carriers coming into Australia in particular is that aircraft are used much more. They are much more productive. How do they become more productive? They become more productive by flying more hours, and that is generally ‘back of the clock’. That is why you see the Melbourne-Darwin and the Melbourne-Denpasar pairings. The aircraft are being used now much more than they used to be as a result of the nature of the low-cost carrier mentality. That is why we have to be far more vigilant in our roster pairing builds and other protection mechanisms.

CHAIR —Are you in favour of mandating or legislating protection to pilots who want to blow the whistle?

Mr O’Connell —Yes.

Senator XENOPHON —Can you confirm that Virgin pilots stay overnight when they fly the Melbourne-Denpasar trip? They do not do the return leg on the same day?

Capt. Murray —No, they do not do it on the same day.

Senator XENOPHON —Do the cabin crew overnight as well now?

Capt. Murray —Yes, I believe so.

Senator XENOPHON —In terms of this vexed issue of pilots being poached, I think we heard from the CEO of Brindabella that he spent $20,000 training someone or getting their accreditation, and they were gone within six weeks to Virgin. That is $3,500 a week, which is an expensive exercise for him. In some jurisdictions, they actually charge the mainline carrier. The poacher ends up having to pay some sort of fee. I am not saying that that should be the solution, but how do you fix it so that you do not see those smaller airlines just get drained of pilots? You may want to take that on notice.

CHAIR —In other words, do you think we should have a sort of transfer fee arrangement?

Mr O’Connell —We have discussed this type of concept for years and years. It is very hard to manage it, but I believe it is something that should be part of an ongoing review, because the industry does deserve to get something back from the company. If the companies are prepared to set up cadet schemes, one of the cheapest ways for a cadet scheme to operate would be to do a deal with Brindabella and say, ‘We will take five or six of yours, and you train them for us to this standard’, all of that sort of thing. So there are ways it could be done.

Senator XENOPHON —I for one would find it useful if you could outline on notice some of the options that have been discussed. I think that would be relevant for the purpose of this committee’s inquiry.

Mr O’Connell —Do you want something in writing after today’s hearing?

Senator XENOPHON —Yes. Could you put something in writing in terms of the options that you have considered; not necessarily stating the view of your association, but listing some of the things that have been kicked around. I would find that useful.

Mr O’Connell —Yes. I remember sitting down with Don Kendell and talking about exactly this thing in the early 1980s, because there was that growth and he lost so many pilots at that stage. In relation to Brindabella Airlines, if he had a collective agreement, he might have been able to recoup some of his money through a bond that we had negotiated, but he does not at this stage. In relation to the various companies and the options, we will put something down.

CHAIR —Thank you very much for your evidence. The committee will resume at 1.00 pm.

Proceedings suspended from 12.29 pm to 1.00 pm