E1 2016 Your AFAP

www.afap.org.au

Edition 1 || 2016

afap your

A Journal for Virgin Group Pilots

virgin’s half year results, pilot welfare

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Welcome to

Your AFAP To say that it’s been a busy time of late for your AFAP industrial staff and your Pilot Reps would be an understatement.

I’ve tried to write this report on multiple occasions over the past month and every time I do a new issue emerges that makes what I’ve written obsolete. As such I’ll try and keep this report simple in the hope that it is still relevant.

With Narrow Body and Wide Body EBA negotiations in play and issues created by the following recent announcements we’ve had a fair bit to contend with: •

reducing the EJet fleet,

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an alliance with “Alliance”,

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further changes to Denpasar flying resulting in Tigerair pilots operating Boeing 737s instead of Virgin Pilots,

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concern generated by the review of the Company’s capital structure and the urgent need to optimise the balance sheet,

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changes to Virgin Australia DAMP policy

Likewise it’s been a lot for AFAP members to digest and the uncertainty created by these announcements has resulted in many pilots understandably expressing concern around their job security.

It’s fair to say that, whether we like it or not, with the financial challenges the Company is facing, we are going to see more change in the next 12-24 months. Everyone will have their own opinion on whether or not these changes need to occur, however whenever changes are made in a business, uncertainty inevitably accompanies it. CAPA were kind enough to allow us to share a copy of their recent analysis on Virgin’s half year results which illustrates some of the challenges that the company faces. We’ve reproduced this analysis on pages 12-17.

It’s important to convey that we are not ignorant about the need for change. However, for change to occur, it’s imperative that the Company consult and work with pilots, especially if the changes are significant. It would be far more constructive if the Company collaborated with the pilots and took us along for the ride. Pilots don’t leave Virgin on a whim, we are all wanting long term careers with Virgin Australia and as such have a vested interest in the long term health of the business.

We appreciate that ASX Governance rules mean that the Company cannot always publicise changes ahead of time.

However, the amount of recent change coupled with a lack of solid information is creating uncertainty that is having a detrimental affect on our members and their families/partners. This uncertainty creates stress that doesn’t go away, especially when a pilot goes home each night to a spouse/ partner who is asking questions that can’t be answered.

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Your AFAP// 2016 // www.afap.org.au

We also acknowledge that we don’t run the Company and we don’t believe we should, however when the Company’s actions are at odds with what is in our EBA and have a negative impact on highly charged issues such career opportunities and job security, then we make no apologies for agitating to the maximum extent possible and exploring alternatives.

We have expressed what we considered to be a lack of consultation with respect to recent announcements and the proposed implementation of some of these changes. During recent EBA negotiations, we have also been critical about the lack of information about future plans. It’s incredibly difficult to negotiate in good faith when you are only being provided with filtered information. The end result is that nothing progresses and we end up stonewalling, digging our heels in and opposing all change. Whilst this can be hugely satisfying in the short term, ultimately it might not prove to be of any benefit to either party in the longer term.

Our recent meeting with the Executive team proved worthwhile and a significant step forward. To abide with the ASX, this meeting was conditional upon all participants signing non disclosure statements. We’re happy to do this if it means we can have input prior to changes being announced.

Going forward, the promise of scheduling regular meetings with the Executive provides us with some confidence that we will be provided with relevant information in a timely manner, allowing us to provide meaningful input which may go to some way to minimizing negative impact to our members.

Something that hasn’t changed is the amount of work going on behind the scenes to improve the AFAP for the benefit of its members, especially on the welfare front.

PILOT WELFARE In the midst of the report into the Germanwings tragedy being finalized and published, (https:// www.bea.aero/uploads/tx_elydbrapports/BEA2015-0125.en-LR.pdf) opinions on how to best identify and treat a pilot with mental health issues have been frequent in the media. As expected, kneejerk reaction has resulted in calls for costly more rigorous screening of pilots. There have also been observations that loss of licence due mental illness is not covered by most providers, or covered to a lesser amount or percentage, with the conclusion that this results in pilots keeping any issues secret as they have too much to lose. In this space it’s worth highlighting that the MBF is a rarity in offering 100% coverage to pilots who lose their Class 1 Pilot Licence because of Mental Illness.

However, whilst Loss of Licence is important the AFAP believes that the need for pilot peer support is the key to assisting pilots and preventing disasters. AFAP Legal Counsel, Joseph Wheeler recently published an article in The Australian advocating the need for peer support programs.

We’ve reproduced Joseph’s article on page 19.

28 pages.

With respect to broader welfare issues, AFAP Industrial Officer and Lawyer, Cate Larkins has been putting a lot of work into the AFAP’s Member Assistance Program (MAP) which has just completed its inaugural year and proven to be a success. More information is provided in a report on page 20.

A copy of the proposed amended DAMP Manual, DAMP Policy and supporting documents can be accessed on the Company intranet.

Another example of pilot peer support in action is HIMS. Captain’s David Booth, Steve Lunn and Brett Loeliger along with AFAP Legal Counsel Joseph Wheeler continue to work with other stakeholders to develop a HIMS program for Australian pilots. Brett has provided a report on page 21 and there will be more detailed information distributed to members as the program is developed.

VIRGIN AUSTRALIA DAME - SIMON MAY We’ve recently received the sad news that Dr Simon May is leaving Virgin. We say sad because Simon has had such a positive effect on the pilot group. Simon has been a great support to many pilots, and during his tenure we have received countless stories of positive interactions from our members. As such, we’d like to wish Simon all the best for his future and his new endeavors.

DAMP COO Gary Hammes emailed pilots on February 29 advising that Virgin Australia is reviewing its DAMP Policy. The Company is proposing amendments that are aimed at introducing a Virgin Australia initiated random testing component (which is currently only conducted by CASA) and clarifying the Company’s expectations in respect of employee drug and alcohol use and its interaction with employment obligations. The proposed revised DAMP is ultimately intended to apply to all parts of the Virgin Australia Group, including New Zealand operations, VARA and Tigerair.

As part of this process the company recently held an initial consultation meeting, with all unions/stakeholders invited to attend. Joseph Wheeler represented the AFAP at this first meeting and provided direct feedback to the company about our concerns.

The AFAP Safety and Technical staff have prepared an extensive written response outlining our concerns and company appears to be taking our concerns seriously. We’ll keep you updated as the process progresses.

AFAP WEBSITE & VPF FACEBOOK PAGE The AFAP is not far away from launching its new website.

The new developments will prove beneficial to all members.

AFAP industrial staff, in combination with your pilot council reps, monitor the media for news that is relevant to Virgin Group pilots. We thought it might prove beneficial to share these articles with our membership via our “AFAP VPF” Facebook page. Unfortunately most articles from the Australian Financial Review and The Australian require a subscription.

However we will still post these links for the benefit of those that do subscribe. If you want to keep track of “Virgin in the news” go to https://www.facebook.com/afapvpf/

2016 AGM The VPF is holding its Annual General Meeting in Brisbane at 1500 on Tuesday, 17th May. The meeting will be held at the AFAP Brisbane offices, and will be followed by social drinks.

Food will be provided. All members are welcome to attend.

Whilst we receive many emails from members throughout the year it’s always good to be able to discuss and debate issues face to face so come along and throw some rocks at your pilot representatives and industrial staff!

Regards, Captain Rod Aldridge VPF Chairman

One of the changes being proposed is arbitrarily increasing the limit from 8 hours to 10 hours to align with NZ regulations. We believe this change is problematic as it will wipe out the ability for Virgin Group pilots to have a civilised drink with dinner on many overnights. Additionally there are other drafting changes that raise questions create that require clarification. The proposed changes would create an 82 page document. As a comparison, the Qantas equivalent is

www.afap.org.au// 2016// Your AFAP

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International Women’s day High tea This year the International Women’s Day campaign was “Pledging for Parity.” Everyone can pledge to take a concrete step to help achieve gender parity more quickly whether to help women and girls achieve their ambitions, call for gender-balanced leadership, respect and value difference and develop more inclusive and flexible cultures. Each of us can be a leader within our own spheres of influence and commit to take pragmatic action to accelerate gender parity.

While gender and equity issues continue to present challenges in many sectors of the aviation industry, there is much to be positive about. IWD is a great opportunity to reflect on the accomplishments of the generations of trailblazing pilots before us.

To celebrate International Women’s Day on March 8, The Women’s Network held a meeting over high tea. This meeting marked Adelaide’s first Women’s Network event.

We are always looking for ways to improve the Women’s Network and foster further engagement. Some of the outcomes from our meeting include talking at schools and universities to encourage girls into aviation and a social event for students to meet pilots and learn from their professional experience. These initiatives correspond with the aims of the Women’s Network and we look forward to developing these ideas further.

We were pleased to be joined by two aviation students from the University of South Australia.

Annual general meeting// save the date WHEN: 16 June 2016 WHere: Brisbane 4

Your AFAP// 2016 // www.afap.org.au

tigerair UPDATE PATRICK LARKINS, DEANNA CAIN AND SIMON MILLER AFAP INDUSTRIAL TEAM Rostering Consultation Late last year the Company announced that CASA approved Tigerair operating under the standard industry exemption to CAO 48 (“Exemption”). The AFAP and the Company have therefore commenced a formal consultation process.

In December, the AFAP, represented by Captain Matt Sheppard, Senior Industrial Officer Patrick Larkins, and Safety and Technical Consultant Captain Marcus Diamond met with Tigerair flight operations to discuss the Exemption’s impact on December rosters.

The AFAP raised a number of issues, including the re-establishment of the Roster Quality Group (“RQG”) and concerns regarding the introduction of the SYD-PER back of the clock duty.

Further discussion between the AFAP (Captain Mike McCaull and Senior Industrial Officer Patrick Larkins) and Flight Operations Management took place in February.

We are pleased to report the progress made on the following key issues: •

Roster Quality Group

The Company has agreed to the AFAP’s request to re-establish the RQG, comprising Captains Mike McCaull and Warren Brewster.

The Company agreed to roster an administrative day for the RQG at a fixed point in the roster build each RP, allowing direct pilot

consultation with resource planning prior to roster publication.

The intent of the RQC is not to seek union influence over rostering, but to allow pilots to directly ensure that the Company are complying with the EBA, roster guidelines and fatigue mitigation measures.

The Company and the AFAP committed to working together through the RQG to address rostering issues rather than having to formalise disputes. The AFAP believes the RQC is the most practical and efficient means of improving rostering compliance.

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Back of the clock Sydney-Perth Return

Since our December meeting, the Company had moved the SYDPER-SYD back of the clock (“BOC”) duty to Day 1 contrary to the Roster Guidelines.

After the AFAP wrote to the Company, pleasingly the Company has now moved this duty back to Day 4, which the AFAP believes is less fatiguing.

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Ongoing Roster Issues

We strongly recommend that members check their roster for compliance with the EBA and/or the Rostering and Crewing Guidelines Manual, and inform the RQG of any issues.

VARA UPDATE PATRICK LARKINS, DEANNA CAIN AND SIMON MILLER AFAP INDUSTRIAL TEAM DECOMMISSIONING OF FOKKER F50 Your AFAP representatives have been engaging in weekly consultations with the Company following its decision in October to decommission the Fokker F50 fleet effective 27 February 2016.

Overall, we commend VARA for their proactive and open manner during consultations.

INTERNATIONAL TRAVEL FOR SIMULATOR DUTIES The AFAP has formally raised a dispute with the Company regarding the application of international travel to the simulator clause in the EBA. This clause replaced business class travel in the new EBA, which is a significant issue for VARA pilots.

These consultations have focused primarily on avoiding the need for any involuntary redundancies and exploring redeployment opportunities within the Group for all F50 pilots. At the time of writing, a majority of F50 pilots have been offered and accepted other positions within the Virgin Group. Unfortunately, however, 12 pilots are yet to be assigned a position in either the Group or VARA.

VARA has been booking pilots on a 0610 departure from Brisbane to Auckland for pilots travelling for simulator duties.

Under the Agreement, VARA must book flights for international travel between 6:00am and 10.00pm unless where no other options are available. As pilots are signing on at 0410, the AFAP’s view is that the Company must book a later flight where a pilot signs on no earlier than 0600.

One of the major obstacles to date has been the lack of certainty around available ATR vacancies, and consequently VARA has not been given approval to offer ATR positions to the unassigned F50 pilots. The delay of this information is frustrating for the pilot group, especially the unassigned pilots whose future at Virgin still remains uncertain. The AFAP have been pushing the Company to advertise ATR positions.

Furthermore, the Company has taken the view that the additional rest provisions in place of business class travel do not apply when a pilot returns to home base from an international simulator duty.

This means pilots have given up business class and in return get minimum rest from simulator duties.

One positive outcome is that the Company has agreed to extend the employment of unassigned F50 pilots until the 30th of April 2016.

The AFAP ATR Pilot Committee will be pursuing this issue through the disputes procedure of the Agreement.

www.afap.org.au// 2016// Your AFAP

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VAA UPDATE PATRICK LARKINS, DEANNA CAIN AND SIMON MILLER AFAP INDUSTRIAL TEAM NARROW BODY EBA UPDATE

SALE OF E190 AIRCRAFT

The narrow body EBA negotiations formally kicked off in December with the Company presenting it’s preliminary logs of claims. The Company included a number of significant aspects of the Agreement it was seeking to change. While the precise detail around the Company’s claims has still not been provided, their ‘controversial’ nature, in addition to the Company’s previous approach to dealing with day-to-day matters, indicates that this is going to be a difficult negotiation.

As part of an ongoing fleet review, the Company recently confirmed the sale of five E190 aircraft. While the Company remains tight-lipped about the future of the E-Jet at Virgin Australia, the AFAP can see that this is almost certainly the beginning of a longer term plan to decommission the entire E190 fleet.

The meetings held this year have focused largely on the unions’ claims. The AFAP negotiating team has presented a comprehensive log of claims in the form of a marked up document. Our claims focus on the core concerns identified from our EBA survey of members, as well as a number of issues that have arisen during the current Agreement. The AFAP’s claims predominantly seek to improve pilots’ lifestyle and to address fatiguing rostering practices such as ETOG and excessive positioning. These reflect members’ requests to pursue a responsible approach to the negotiations, and not present large ambit cost claims that will inevitably lead to a protracted negotiation process.

We expect to see the full extent of the Company’s claims at the next meeting and a high level response to our comprehensive log of claims.

We are conscious that the current agreement expires in May this year and that pilots do not have a guaranteed salary increase on 1 July. However, we will not accept a speedy resolution that disadvantages or does not reflect the wishes of our members.

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Although the removal of these initial five aircraft is not expected to have an adverse impact on E-Jet pilots, as result of other opportunities becoming simultaneously available in the Group, namely B737 vacancies, we recognise there is currently significant uncertainty amongst E-Jet pilots as to their future. This uncertainty has been compounded by the reluctance of the Company to provide any guidance on how any future reduction of E190 aircraft will be managed, or even acknowledge that this is something that needs to be urgently addressed.

The AFAP has been at pains highlighting the uncertainty this is creating for E190 pilots and the personal toll it is taking. The Company has only now committed to an ongoing consultation process with the unions about the E190 fleet, and importantly the need to focus on providing guidance to E-Jet pilots on the management and potential impact of a further fleet reduction.

Rest assured that as part of these discussions the AFAP will also be actively exploring options to mitigate the hardship on E-Jet pilots impacted by further a fleet reduction or decommissioning, including, but not limited to, salary continuance arrangements, relocation assistance and enhanced domicile/ commuting rights.

VAi UPDATE PATRICK LARKINS, DEANNA CAIN AND SIMON MILLER AFAP INDUSTRIAL TEAM long haul/wide body eba UPDATE

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After almost two years of protracted VAI Long Haul / Wide Body negotiations, a stalemate was reached late last year, leaving the AFAP frustrated with the lack of concrete progress. Following a meeting with Chief Operating Officer Gary Hammes, the Company committed to providing a full draft document in early 2016, including its proposed remuneration package.

One of the central issues in the Wide Body EBA is the proposed credit system centred on a “Minimum Credit Guarantee” (“MCG”).

It proposes that duties in a pairing will receive the MCG where they involve a flight, training, standby or simulator duty. The Company position is the MCG be set at 4.5 hours, with standby attracting 5 hours’ credit and positioning being a minimum of one hour per sector or half the flight time, whichever is greater.

In February, your AFAP representatives met with the Company to continue Wide Body EBA negotiations and presented a detailed response to the Company draft Wide Body document. Our position was supported by VIPA . Two significant aspects of our response addressed the remuneration package and the credit system: •

Remuneration

The Company provided a revised remuneration offer (the first for 15 months) and it was not worth the wait. The offer marked a reduction on its previous proposal as part of Long Haul negotiations, and included pay freezes and reductions for particular resource groups.

The Company advised that the position was an improvement on the previous offer because they had withdrawn productivity offsets (increased overtime threshold, and reduction of superannuation).

The AFAP made it clear to the Company negotiators that the offer was manifestly inadequate and that the concept of pay freezes or reductions in salary was completely without justification.

The AFAP will review our position and provide a responsible offer that reflects a fair and reasonable pay rise for pilots of all ranks and fleets.

Credit System

The AFAP review of the Company proposal was that the MCG was too low, and would not deliver the desired benefit of incentivising the Company to roster efficiently (i.e. multi-sector pairings).

Coupled with a proposed reduction in minimum DDOs to 11 for A330 pilots we did not believe it adequately protected pilots’ lifestyle and would instead result in increased standby days.

The AFAP’s joint position put back to the Company was for a MCG of 5.5, which the Company immediately advised was too costly.

We said that the Company will need to justify this position, and requested modelling of rosters based on an MCG of 5.5 and 5 and we will review this closely before the next meeting.

Overall the discussions on the credit system were productive and demonstrated the potential to move towards a position that can work for both parties.

Next Steps The AFAP are preparing a comprehensive document in response to the Company draft incorporating our proposed amendments and remuneration package. The parties meet again on 23 and 24 March.

www.afap.org.au// 2016// Your AFAP

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melbourne retirements Last year the AFAP had a number of prominent members retire from aviation. To celebrate their careers and long standing AFAP membership, we acknowledged our Victorian retirees on 9 December 2015.

We honoured Captain Ric Brumby, Captain Brian McCarthy, Captain Damian Cresp and Captain Walter Gowans Senior with a farewell event at the Union Hotel in Melbourne.

This event followed the success of our first Retirement Farewell Event in Brisbane in July.

CAPTAIN BRIAN MCCARTHY • • • • • •

CAPTAIN RIC BRUMBY • • • • • • •

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9 Dec 1974 - first flying lesson – exactly 41 years ago 2 years as a flying instructor on single engine aircraft 6 months on light twins RPT Commuter operations with Thorpe’s transport in the Torres Straight (Beechcraft Barron and Islander) 1979 to 1989 - Ansett for almost 10 years (F27, B737 and B767) March 1980 - Ric joined the Federation 1990 to 1994 - 4 years with Martinair of Holland (B767) flying worldwide on B767 300ER 1994 to 2004 - 10 years of contractual airline flying on 767’s and to a lesser extent 757’s for the following airlines; Gulf Air, Vietnam Airlines, DHL (Bahrain ), Swiss World Airways, also carried out numerous delivery flights to airlines in Asia, Middle East and Europe 2004 to 2014 - almost 11 years with Virgin Australia (B737 NG) Check and Training Captain on B767’s and to a lesser extent on the 757.

Ric has flown as PIC into every continent (except the Antarctic - maybe in retirement!)

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21 September 1974 - joined the Federation Brian was an Army pilot who flew porter aircraft and went on to become an employee of TAA. First Officer on the A300 airbus attained his first command on the B727 aircraft ironically in early 1989.

Vice President of the Federation 1985 to 1987.

Organiser of the IFALPA symposium in Australia in 1984 regarding two crew cockpits and heading towards the year 2000.

Elected President in 1987, the first time a First Officer attained the office. Brian had led the negotiations for TAA/Australian during the mid-eighties. As President he provided the public face of the Federation as it entered the difficult 1987 Accord period.

As the key Principal Officer, he appeared on behalf of and consulted with the membership about the direction to be taken. With the Government reneging on the promised tax cuts as a part of the Accord leading to the subsequent compression of salaries for the pilots, a series of stop work meetings were held around the country endorsing the Federation for not renewing the Accord commitment when they fell due. The renewal of the TAA/Australian contract was led by Noel Holt as the Vice President.

With the interference of the Federal Government forcing negotiations to be conducted on all pilot salaries from General Aviation to Airlines this set the stage for the dispute. Brian will always be remembered for the statement “all we want to do is negotiate”.

He travelled the countryside with other Principal Officers and staff members to address meetings of pilots and be the primary spokesman on behalf the 1647 directly affected pilots of Australian, Ansett, East West and Ipec.

He rarely wavered and fronted hostile media, hostile government and hostile ACTU representatives throughout.

It was testament that many pilots stood their ground for so long. Brian was determined to remain to the last and, ultimately, his decision to stand down in July 1990 was difficult but necessary for the future of the organisation.

Brian was one of six individuals personally sued and held responsible for the $6 million debt action in the Victorian Supreme Court. A debt never collected but held over his and his family for 15 years.

He continued overseas with Translift, Singapore Airlines and finally returned to Australia flying for Virgin Blue (now Virgin Australia) where he remained until his retirement in 2015.

2013 - Brian McCarthy was awarded Life Membership of the AFAP in recognition of his outstanding and distinguished service throughout his membership of the Federation and his willingness to stand up for his fellow pilots as President during the most turbulent passage of Federation’s history.

CAPTAIN DAMIAN CRESP

CAPTAIN WALTER GOWANS SNR

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Joined the AFAP on 24 June 1982.

Commenced flying training in May 1978 at a flying school in Cessnock, NSW. After obtaining his Commercial Licence through this flying school, he moved to Mt Isa for his first job flying a Cessna 206 to NT and North QLD. Returned to Melbourne in September 1981 to add a Class 1 instrument rating to his qualifications.

November 1981 - commenced his first airline job with Murray Valley Airlines (MVA) based in Mildura, Victoria.

MVA had two Cessna 402C’s which operated Mildura to Melbourne and Mildura to Adelaide via Renmark. MVA advanced to a Bandeirante then shortly this was followed by a Shorts 330. Around 18 months later, the Company upgraded to a Shorts 360.

During this period, he was selected and qualified as the Flight Operations Manager and Chief Pilot of Sunstate Airlines (Mildura). Damian’s approval for this position was granted by the Regulatory Body in November 1986, a position he held for 16 years.

August 1996 - Southern were provided the opportunity to operate BAe 146-200 aircraft by Qantas. The operation was to be ready to accept passengers in mid-December 1996, four months from the announcement. CASA was at the beginning of using a new Air Operator’s Certification Manual to process AOC approvals. To have the BAe 146’s included on their AOC was one of the greatest challenges of his aviation career. The workload was enormous, but 2 hours before the first service in the 146 was scheduled to commence, the AOC approval was granted by CASA. After 21 years with MVA/Sunstate/Southern, that part of his career ended when in October 2002 the airline was “merged” into Eastern (not very well he adds). He resigned and took a redundancy rather than remaining.

He joined Virgin in February 2003 as a B737 First Officer and upgraded to Captain in March 2005.

February 2015 - Damian retired from flying after a wonderful career in which he worked with and met so many fantastic people.

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Commenced flying training in Tasmania in 1963 where he obtained his commercial pilots license.

His initial career included charter flying, instructing and duties as chief pilot.

His airline career commenced in 1970, when he joined Ansett Airline as a First Officer on Fokker Friendships. He joined the Federation shortly after in February 1971. He gained his initial command on Friendships in 1979, and shortly after was promoted to Check Captain in 1980.

His logbook includes endorsements on: Fokker F27, Boeing 727, DC9, Boeing 737/200 through to 800 series, Airbus A300/600R and A310/300; and Mc Donnell Douglas MD82 and MD83.

Following the 1989 pilots dispute he was involved in the start-up of Compass Airlines and Compass 2.

During his time overseas Wal worked in: - India, as part of the Check and Training Team setting up a new airline called Jet Airways.

- Nauru, as part of a management team to

restructure Air Nauru B737 operations.

- Brussels, with Virgin Express, flying B737.

Wal planted the seed with Virgin management in 1998 when he suggested that Australia was in dire need of competition for the encumbered two airlines. This suggestion came to fruition in 2000 when he was made Flight Standards Manager for the new start up, Virgin Blue.

Until his retirement in April 2015 he was a respected Check Captain with Virgin Australia.

Wal has been a stoic member and supporter of the Federation. He provided valued support and input during negotiations for the first Virgin Blue EBA. At the 2015 AFAP Convention Wal was awarded Honorary Membership of the AFAP in recognition of his distinguished service to the Federation and the profession of Commercial Air Pilots.

Retirees: (left to right) Brian McCarthy, Damian Cresp, Ric Brumby, Walter Gowans Snr.

www.afap.org.au// 2015// Your AFAP

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Securing your social media Captain george kailis Vice chair of vpf Back in Your AFAP Edition 2 2014 we published an article on Social Media in the Workplace. In this article we touched on the potential impact of what may seem like a benign post on Instagram or a simple one line on Facebook, and perhaps a reminder is necessary. On first thought these posts may seem harmless, however social media content can potentially lead to disciplinarian action, termination or court proceedings.

Virgin Australia, like most large brand companies, take great pride in their social media platforms and employ trained staff to monitor social media traffic 24/7 and respond to any issues that arise. With this in mind, as employees we must be aware at all times of our responsibilities in relation to posting and using these social media platforms. Our behaviour online can have a serious consequence, not only from our employer, but also from the regulator CASA.

When accessing and using social media ensure that your actions do not: 1. Make comments or post images that are inconsistent with your employment obligations.

2. Disclose confidential information 3. Damage the brand or reputation of the business 4. Be disrespectful to fellow employees or customers 5. Post images related to your job if they have potential to impact the Company’s reputation

Virgin Australia makes it very clear in their Social Media Policy and Social Media Flight Plan what they consider to be permissible conduct regarding to social media usage. One significant point that is clearly stated is:

“Do not take or post images of yourself in uniform while you are working. This includes when you are operating a flight i.e in the galley, this has the potential to damage the reputation of the airline as it may appear that you are distracted from your role”.

Most photos are taken on handheld devices such mobile phones or digital cameras, yet in recent times, devices like GoPro have come onto the market. Be aware that the same risks apply to these devices. Fitting this equipment to the cockpit may potentially be considered illegal or a modification in the eyes of CASA, and may require a dispensation or modification approval for use. Additionally, if these devices were considered to have contributed to an incident or accident, the PIC may be subject to both criminal and civil proceedings. In recent times, an A320 on approach into Singapore saw the pilots distracted by a mobile phone and the incident attracted media attention.

Most company policies relating to social media centre around core elements to protect their image and may seem on face value to be fairly straight forward, yet they may dovetail into many other policies, procedures and laws.

Social media has become a normal part of our everyday communication and when used within its intended audience and with respect to your employer’s policies, there is usually no consequence. Yet breaches of these policies can lead to outcomes and that may come as a surprise to the user, but they could simply be avoided.

As we’ve said in the past, before you post something on social media think about the potential consequences and run this simple test:

“What would my boss think of this?”

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Your AFAP// 2016 // www.afap.org.au

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www.afap.org.au// 2016// Your AFAP 11

Virgin Australia: Delivering on goals, but stronger performance expected in a favourable environment Virgin Australia has made significant inroads in its return to profitability; a commitment to cost leadership has contributed to decreasing costs, driving domestic yield growth, while the airline has made impressive inroads into increasing its corporate and government travel share. Despite significant odds, Virgin has also made advances in the lucrative freight business.

But given an extremely favourable operating environment, many expected the result to be better. Virgin’s results for the six months to 31-Dec-2015 showed that the market is again stable, with its domestic operations improving markedly to an AUD130 million (USD94.0 million) EBIT profit, up 86.5%.

Promisingly, domestic market growth is now delivering significantly improved yield – albeit with a lower traffic figure.

International operations have continued as an area of poor performance for the group for as many periods, primarily a result of its exposure to Southeast Asia and volcanic activity in the region, resulting in an AUD30.8 million (USD22.3 million) EBIT loss, compared with a loss of AUD39.5 million (USD28.6 million) in 1HFY2015. Deploying Tigerair Australia to take over leisure routes will be positive; it is better suited to Virgin’s full service proposition and cost base, but success is not guaranteed.

Domestic market storms ahead as Virgin increases its corporate, government share Supporting the improvement in Virgin's results was a marked change in its domestic market, Virgin's core segment, accounting for approximately 75% of its business. While this segment was previously the one in need of work, the cause had been relatively simple to address – domestic overcapacity – and the ending of the capacity war has restored stability. But the international market is more complex with no quick fix. The domestic market is where stakeholders Air New Zealand, Etihad and Singapore Airlines have been pressuring for a solution, monitoring the biggest challenges at Virgin.

Domestic is likely to grow into a problem area over the coming 12 months – capacity is flatlining and while business class travel remains (perhaps surprisingly) robust, economy class travel is undergoing a weakening in demand across the board.

Virgin Australia has also led Qantas in instigating fare increases throughout 2015, contributing to strong RASK growth of 3.9% and yield growth of 4.3%, while loads weakened.

Virgin is continuing to invest significant cash into the business but profits are down - capital costs remain a problem, and the muted returns to date leave it limited options for further investment. Transcontinental routes to Perth, where the airline deploys its well-equipped A330 fleet, are suffering as a 12

Your AFAP// 2016 // www.afap.org.au

result of the mining slowdown. Average fare change across the year reflected a slowdown in demand with a single digit increase (compared with medium double digit increases for some other routes).

Jetstar meanwhile continues to report double digit RASK growth and remains the greatest beneficiary from Virgin's low-fare passengers moving away, due to fare increases and the removal of bag-free fares.

Summary results: revenue up 11.8%, EBIT up 197% and Tigerair now profitable Virgin Australia Holdings, revenue up 12% during 1HFY2016. Other metrics •

Revenue: AUD2658 million (USD1921 million), +11.8% year-on-year; • Virgin Australia domestic: AUD1819 million (USD1315 million), +6.1%; • Virgin Australia international: AUD567 million (USD409.8 million), -0.3%; • Velocity: AUD154.8 million (USD111.9 million), +26.3%; • Tigerair Australia: AUD243.8 million (USD176.2 million);

•

Operating costs: AUD2565 million (USD1854 million), +7.8%; • Labour: AUD597.2 million (USD431.7 million), +9.3%; • Fuel: AUD561.1 million (USD405.6 million), -8.6%;

•

Segment EBIT (loss): AUD161.4 million (USD116.7 million), +197%; • Virgin Australia domestic: AUD130 million (USD94.0 million), +86.5% • Virgin Australia international: (AUD30.8 million) (USD22.3 million), compared with a loss of AUD39.5 million (USD28.6 million) in p-c-p;

Tigerair cannot retaliate adequately due to its small size, and Jetstar's increasing hybridity with access to Qantas' lucrative FFP - makes it a more attractive option for value-conscious business travellers.

Capacity increases remain off the agenda – forecasts are staying flat with no new capacity coming in, although some increases (or decreases) around the margins are possible, by varying aircraft utilisation.

Virgin plans to remove five Embraer E190s

by Sep-2016, but said that it would offset this decrease through increased utilisation of its 737 fleet. Qantas, Jetstar and Tiger are also expecting no new capacity, though a reconfiguration of Qantas’ 737 fleet will deliver a fleet-wide capacity increase of around 400 seats (more than two new 737s).

• • •

Velocity: AUD70.8 million (USD51.2 million), +56.6%; Tigerair Australia: AUD13.9 million (USD10.0 million);

Profit before related income tax benefit and net finance costs: AUD93.1 million (USD67.3 million), compared with a loss of AUD17.4 million (USD12.6 million) in p-c-p;

•

•

Net profit: AUD62.5 million (USD45.2 million), compared with a loss of AUD47.8 million (USD34.6 million) in p-c-p; Load factor: • Domestic: 77.9%, -0.3 ppt; • Virgin Australia domestic: 76.2%, -1.4 ppt; • Tigerair Australia: 86.1%, -0.4 ppt; • International: 83.7%, +1.7 ppt;

•

Total assets: AUD5849 million (USD4228 million);

•

Cash and cash equivalents: AUD906.7 million (USD655.4 million);

•

Total liabilities: AUD4915 million (USD3552 million).

*Based on the average conversion rate at USD1 = AUD1.3835 Source: Airline Reports

Virgin on track to reach a full year FY2016 profit, but better could be expected Since appointing John Borghetti as CEO in 2011, Virgin Australia has undertaken an ambitious brand repositioning, from the cheap-and-cheerful ‘new world airline’ Virgin Blue to the upmarket and glossy Virgin Australia.

The cost of such a one off repositioning does not come cheaply. As CEO, Mr Borghetti has

presided over more than half a billion dollars in losses and turned a full-year profit only once – AUD22.8 million in FY2012, which covered the Qantas shutdown.

Nevertheless, much of that adjustment is now behind it; the airline is now back in the black and remains on track to meet guidance for a FY2016 profit. The strides that the larger

Qantas Group has made over a shorter period of time cannot be ignored – as the group progresses toward a FY2016 profit well in excess of AUD1 billion – while Virgin Australia continues to invest significant capital into its transformation. There are distinct advantages in being the bigger horse in a two horse race.

Virgin reports AUD97.7 million year-on-year performance improvement To fend off the encroachment of Virgin Qantas has led an, at times, unattractive but ultimately necessary restructuring. The cost gap between Qantas Domestic and Virgin Australia is according to Qantas now approaching <5% while revenue premiums have been held at >15%. When Qantas first started Jetstar in 2004, it noted that Virgin had a 40% cost advantage over Qantas Domestic. This was a major competitive advantage for Virgin that has since been eroded.

Source: Airline Reports

Virgin Australia Holdings vs Qantas Airways (Domestic & International) CASK Source: CAPA CASK Database

www.afap.org.au// 2016// Your AFAP 13

Fuel hasn't been able to help Virgin yet as hedges slowly unravel One area where Qantas has made great gains is in the price it pays for fuel. Qantas' hedging strategy has enabled it to profit significantly from the rapid fall in prices, even after adjusting for currency fluctuations. Virgin Australia however continues to experience only modest gains from falling oil prices, with only 14% participation in the drop during the remainder of FY2016. The airline also noted that fuel pricing is expected to be “significantly offset” by lower effective FX rate across non-fuel costs during 2HFY2016.

Expected fuel and foreign exchange hedging impact in FY2016

The airline will gain increasing exposure to declining oil prices as legacy hedges expire in FY2017.

Source: Airline Reports

Premium-heavy A330s a problem as mining slowdown continues; Fiji is not a solution Virgin’s fleet of six A330-200s is most out of place in the new paradigm of Australia’s market; while Qantas has flexibility to redeploy its widebody fleet onto international routes, Virgin does not. So far, Virgin has also been reluctant to move the aircraft to ‘golden triangle’ routes on the East Coast after committing to A330 deployment on transcontinental routes. Corporates particularly are sensitive to unwelcome product changes.

Virgin has no plans to reduce the number of A330-operated frequencies on services to Perth, the route for which the aircraft were acquired and fitted out - but in fact where the mining slowdown is most pronounced. Nowhere is this more evident than in fares – Sydney to Perth fares, for example, reported among the slowest growth in Virgin’s network, and business class fares were down overall, despite the introduction of the much-touted high quality new business class product.

Virgin Australia A330-200 services effective 08-Feb-2016

Qantas has reduced its A330 flying across the country in recognition of weaker demand and now has an additional aircraft to deploy on its international operations. Virgin’s issue arises less from the question of faith in the market than from a lack of alternative uses.

Departing

Arriving

Sydney

Perth Nadi

Melbourne

Perth Nadi

Brisbane

Perth Nadi

Excursions to Nadi are planned from Sydney, Melbourne and Brisbane in 2016, with once weekly frequencies to improve utilisation, but this is not a solution. The plan harks back to the early days of Virgin’s 777 operations, which were also deployed to Fiji in the absence of more sensible flying.

Mr Borghetti has ruled out international destinations such as India and China for its fleet of A330s, leaving few strategically suitable destinations remaining. Any international flying for the A330 fleet would also come at the expense of its local customer proposition. New markets would be a gamble, and Virgin has little appetite to test its luck.

International is improving, but still the less favoured stepchild of the group International has often been a disproportionately big problem for Virgin across its network. Opportunities for low risk virtual international operations are significant, whether short haul or long haul, and it remains prudent for Virgin to reorient itself where it is strongest – domestically.

Positive momentum for international, but still in the red. International results HY15/16

Virgin’s international business has been impacted by increased competitive pressure and weak demand for leisure international services - particularly in Southeast Asia - recording a -0.3% decrease in revenue compared with 1HFY2015.

Virgin Australia operates its limited long haul network using a fleet of five 777-300ERs. The airline’s fleet of six A330-200s is now only used on domestic routes, with the exception of one weekly frequency between Sydney and Nadi.

Virgin Australia uses 737-800s on all of its routes to Southeast Asia, New Zealand and the South Pacific (The only exception is SydneyNadi, which is served with seven weekly 737-800 frequencies and one weekly A330 frequency).

14

Your AFAP// 2016 // www.afap.org.au

Source: Airline Reports

A new approach to international operations may be in order It may be time for a more aggressive approach - Virgin’s international business has been haphazard almost from the beginning, with a scattering of narrowbody services to Southeast Asia very much reminiscent of its days as a leisure LCC. While performance may have improved significantly, it remains an unprofitable endeavour, as Asian markets continue to be very price sensitive.

Compounding the challenge are stiff competition and overcapacity between Australia and Southeast Asia.

Virgin Australia international capacity, ranked seats by region as of 15-Feb-2016

While Virgin operates some its 737s on some of their longest stage lengths in the world to reach Asia (blocking several seats westbound in the process), its competitors – including Jetstar and Garuda Indonesia – are operating 787s and A330s at considerably similar price points, if not cheaper.

Mr Borghetti has singled out the Southeast Asian market quite clearly as the problem child, noting: “The issues are predominantly around Southeast Asia… When you look at Southeast Asia, in particular Indonesia, there is a lot of low cost capacity there.” Virgin has pitted itself directly against Jetstar in the leisure market, but this is a market where Jetstar has also struggled, especially with yield, and it is unclear exactly what Virgin’s customer proposition would gain in the long haul leisure market, where it will never have a cost advantage over its Asian competitors.

Mr Borghetti has been ambitious in his comments to date, flagging potential destinations in Indonesia, Fiji and New Zealand for Tigerair. Such an expansion would be risky – Australia to Southeast Asia is already very well served, and it is unlikely that Tigerair would be able to deliver a cost base to make it a real contender with existing players. The costs of such an expansion are also unlikely to be repaid in that market alone. It is a risky proposition, and potential pay-offs are few and far between.

Source: CAPA – Centre for Aviation and OAG The airline has added capacity to the Southwest Pacific market, mostly New Zealand, Fiji and the Solomon Islands, where it anticipates robust demand.

Virgin is aiming for a return to profitability in international operations by FY2017.

Virgin has few cards left in its hand for an international expansion – there is no incoming growth in the 777 fleet, and in fact plans for seven aircraft have been wound back to settle for five. Virgin actually might be happy to settle for none. Replacement of the type has now been pegged at 2020, previously announced expansion has fizzled out and – barring recent changes to consolidate its US network – operations have remained relatively static.

The airline’s propensity to build its virtual international network would work in its favour and Mr Borghetti makes no secret of the fact that this is the most viable option for his airline.

Weak returns following transformation leave limited room for further investment – Tigerair has not grown Tigerair’s growth is below what Virgin committed to the Australian Competition and Consumer Commission (ACCC) when purchasing the airline. In the initial application, Virgin noted plans to grow Tigerair from 11 to 35 aircraft by 2018. Tiger currently has no aircraft on order, and transferred its outstanding A320 orders to Tiger Holdings in Singapore in 2015. Its existing fleet of 14 A320s is well below the promised levels, and incoming Boeing 737-800s from Virgin will be operated on an ACMI basis. It is unlikely that Virgin Australia plans an ambitious expansion by 21 aircraft in two years, at least not in the domestic market.

Tigerair Australia fleet as at 11-Feb-2016 Aircraft

In Service

In Storage

On Order*

Airbus A320-2000

14

0

0

Total:

14

0

0

Source: CAPA Fleet Database Further opportunities are limited. Virgin lost the budget travel segment in its move upmarket, disenfranchising its previously core base of customers looking for a low fare. Virgin lacks the resources to expand Tigerair, and the market arguably could not support two Jetstar-sized competitors at the budget end.

Virgin's move away from bag-free fares pleased some since it sought to provide a more full service offering, but it alienated low fare travellers. Jetstar Group CEO Jayne Hrdlicka noted the rebrand: “Has delivered very significant RASK growth for us in what have traditionally been very quiet periods of the year,” as Virgin customers move away onto lower priced Jetstar services.

Tigerair international is a first step at Southeast Asia network adjustments Virgin will transfer its Melbourne-Bali, Adelaide-Bali and Perth-Bali services to Tigerair Australia from 23-Mar-2016, likely the first of several moves to realign its markets and brands as it hopes to turn its international operation around. Virgin also suspended its Perth-Phuket service from 01-Feb-2016 as part of the broader realignment.

Virgin Australia’s capacity to Bali will be reduced by 50% after the last flights on the Adelaide, Perth and Melbourne routes are operated on 23-Mar-2016. Tigerair Australia will initially operate daily flights on Melbourne-Bali and Perth-Bali while Adelaide-Bali will be served with five weekly frequencies. www.afap.org.au// 2016// Your AFAP 15

Virgin Australia international seat capacity by country as of 15Feb-2016

Source: CAPA â&#x20AC;&#x201C; Centre for Aviation and OAG On a group level, Virgin Australia capacity to Bali will be relatively flat as the three Tigerair Australia-branded 737-800s will have 180 seats, compared with the 176 seats currently on these aircraft. The aircraft will be partially reconfigured with the 168 existing economy seats being reupholstered in Tigerair colours. The eight business class seats will be removed and 12 economy seats will be added, resulting in the new 180-seat single class configuration. Some galley space will also be removed.

The decision to go with a less dense 180-seat configuration is sensible as Tigerair Australia would face payload limitations on Melbourne-Bali with a 189-seat aircraft.

Tigerair Australia is also confident that there is sufficient demand for a larger proportion of extra legroom seats, given the length of the route. Melbourne-Bali is nearly six hours, while Adelaide-Bali is approximately five hours and Perth-Bali is

slightly under four hours.

Melbourne-Bali could be viewed as a test case for Tigerair Australia as it is very unusual for a narrowbody LCC to operate a route of over five hours. If Melbourne-Bali is successful, it could give the Virgin Australia Group the confidence to hand over similar medium haul routes such as BrisbaneBali and Sydney-Bali.

If Tigerair Australia is able to turn profits on Melbourne-Bali and the two other Bali routes it also potentially gives the group the confidence to transfer 737-800s to the Tigerair Australia air operatorsâ&#x20AC;&#x2122; certificate (AOC). Mr Sharp said that the initial three aircraft that will be repainted in Tigerair Australia colours and reconfigured will continue to fly under the Virgin Australia International AOC using an ACMI arrangement, with cabin crew provided by Tigerair and pilots from Virgin. Using Virgin pilots avoids Tigerair Australia having to retrain any of its pilots, as well as avoiding the complexities of a twin fleet. However, it also results in higher labour costs, which could potentially make the routes more challenging.

The three Bali routes are more a strategic move that enables the Virgin Australia Group to maintain its presence in a key market while reducing the losses at its full service international operation.

Handing the routes and three 737-800s to Tigerair Australia will not be the last move the group makes as it tries to carve out a profitable niche in the highly competitive Australia-Southeast Asia market. It is a modest step towards evolving the group strategy, but a significant precedent as Tigerair shows its first international stripes.

Potential growth in regional, freight operations - the former largely stagnant Virgin acquired Perth based Skywest on 07-May-2013, subsequently rebranding and expanding the airline's operations over to the East Coast as a QantasLink competitor.

The carrier is rationalising its fleet, decommissioning its Fokker F50 fleet by end FY2016 and dropping its subsidised Perth-Esperance, Perth-Albany and Perth-Ravensthorpe services from 28-Feb-2015. The airline has exposure to FIFO charter in Western Australia, but has previously expressed optimism for future opportunities in the market. Skywest has expanded its charter business by about 30% since it was first acquired by Virgin Australia.

Mr Borghetti said the carrier's charter business is still adding aircraft and he expects further growth, despite a downturn in the broader resources sector, and plans to target regional New South Wales for further expansion. Except for the launch of a Sydney-Tamworth service in May-2015, expansion has been static however.

Cargo has made "clear progress" in 1HFY2016 toward its annual revenue target of AUD150 million (USD107 million) by FY2017, having won "a number of key accounts" and "signed a heads of agreement with TNT to finalise an exclusive five year deal to take effect from Jul-2016."

Mr Borghetti noted: "We always knew we were going to take a hit in revenue in the short term... We were confident in the long term we'd be further ahead. I am still confident of our ability to do AUD150 million [by the end of FY2017]." Mr Borghetti said the carrier has picked up approximately 80 to 90 freight accounts since launching the freight division in 2015, and said dedicated freighter aircraft would be considered if Virgin won the right contracts.

Overview of Virgin Australia Regional Airlines including freight and charter

Virgin Australia Regional Airlines fleet summary as at 15-Feb-2016 Aircraft

In Service

In Storage On Order*

Airbus A320-200

2

0

0

ATR 72-500

6

0

0

ATR 72-800

8

0

0

Fokker F-28-0100

15

0

0

Fokker F-050-050

7

1

0

Total:

38

1

0

Source: CAPA Fleet Database 16

Your AFAP// 2016 // www.afap.org.au

Source: Airline Reports

A tie-up with Alliance Airlines announced on 15-Feb-2016 will provide joint procurement and bidding benefits for Virgin in the charter space. While networks overlap, Alliance has a larger footprint in Queensland and is a significant Fokker operator with some 21 aircraft coming on line (albeit largely for spares and support) during the next two years. That is in addition to its existing fleet of five F50s, eight F70s and 15 F100s. Virgin has previously also purchased two F100s from Alliance. The key terms of the proposed commercial partnership are: •

Alliance Airlines and Virgin Australia Regional Airlines will form a charter partnership to jointly grow their charter

•

businesses. Existing charter contracts will remain with their current operator, with all new contracts to be operated under the partnership; Alliance and Virgin Australia will enter into agreements to provide and procure services for each other on a preferential basis. This includes, but is not limited to, aircraft procurement, spare parts pooling, maintenance and ground handling services.

The agreement is subject to conditions and Australian Competition and Consumer Commission (ACCC) approval.

Virgin Australia has adopted a more muted tone, but is heading in a promising direction The Virgin Australia group has yet to flex its muscles in a more strategic way, more fully utilising the lower cost Tigerair operation.

Operating the two brands in tandem is more of an art than a science, but Qantas' combination with Jetstar has shown it can be very effective if managed well. There is most certainly upside for Tigerair as an effective part of the group At the higher end of the market Virgin has achieved arguably one of the most successful airline repositionings in recent times, in

record time delivering a coherent new brand to the market with a clear value proposition.

The airline is on track to achieve a >30% share of the corporate travel market in Australia, and has built a promising - albeit fledgling - platform for dual brand growth.

The next step will be to deliver the appropriate profits. The platform is there.

This article has been reprinted with the kind permission of CAPA - Centre for Aviation.

IFALPA Supports ICAO’s Prohibition of Lithium-Ion Batteries as Cargo on Passenger Flights The following is a Press Release issued by IFALPA on 26 February 2016.

MONTREAL, Canada – The International Federation of Air Line Pilots’ Associations (IFALPA) supports the International Civil Aviation Organization’s (ICAO) important decision this week to prohibit lithium-ion batteries as freight on passenger aircraft, but feels more needs to be done to address the safety of shipments on cargo aircraft. Both lithium-ion and lithium-metal batteries continue to be permitted in unlimited quantities on cargo aircraft, despite the demonstrated risk these shipments pose.

“We are extremely gratified that ICAO has acted on this long-standing safety concern, moving to protect passengers and crews from the dangers posed by shipments of lithiumion batteries”, said Mark Rogers, IFALPA’s Dangerous Goods Committee Chairman. The prohibition was first proposed by

IFALPA to the ICAO Dangerous Goods Panel in 2009, and again in 2015. “The risk these batteries pose is the same regardless of the aircraft type, however, and we now call on ICAO to extend the same protections to cargo aircraft”, Rogers continued.

IFALPA supports a long-term solution to develop packaging that will ensure lithium batteries can be shipped safely on both passenger and cargo aircraft, and is committed to working with ICAO and the SAE International to develop the appropriate standards. We urge ICAO to continue this important work, and to extend the prohibition to cargo aircraft until this standard is developed and fully implemented for all lithium battery shipments.

www.afap.org.au// 2016// Your AFAP 17

MBF reinstatMent

& Overseas MeMBership re-JOininG the australian air pilOts MBF? Were you a member of the MBF previously and thinking about re-joining? The MBF now allows previous members to be reinstated with the cover they held when they resigned.

If you were once in the MBF, you now have the opportunity to essentially ‘pick up where you left off.’

Applicants can reapply if they had been a member for not less than 5 years continuously and have been absent for no more than 6 years.

As a re-join under the reinstatement rule, Refund of Contributions (up to $60,000) is still accessible to you; however you must have an aggregate total of 25 years in the MBF in order to apply for the benefit.

The table below shows a cost comparison for a pilot rejoining under the reinstatement rule compared to rejoining outside of the rule.

The amounts below are based on a 42 year old pilot who had $800,000 in MBF cover under joining band one, rejoining with cover effective 1 May 2016. re-join under reinstatement rule Maximum cover Cover SCB + PCB

Cost (per annum)

$800,000

$2,791.80

normal rejoin Maximum cover VS

Cover SCB + PCB

Cost (per annum)

$680,000

$3,944.16

GOinG Overseas?

Did you know MBF members who aren’t Australian citizens can now take their membership with them overseas?

If you’ve been a member for two years or longer and not an Australian citizen you can still be covered if you take a position outside Australia, whether it is with VANZ or any other secondment. As soon as you know you’re heading overseas, write to the MBF to let the Board know the details of your new employment and when you plan to return to Australia.

alreaDY a MeMBer?

Make sure to be on the lookout for MBF renewals, coming your way mid-April. All members must renew their membership by 31 May (on the MBF website) to ensure continued loss of licence protection.

If you have any questions about MBF membership, please call our friendly membership team on 03 9928 4500 or email membership@aapmbf.com.au.

run by pilots, solely for the mutual benefit and protection of pilots.

18

This information is of a general nature only. It is not intended to be relied upon as personal advice. Please read Rule 2 (e) and Rule 2 (e) (v) in Your AFAP// // www.afap.org.au relation to the2016 above mentioned rules. Before you make a decision on your Loss of Licence cover, we urge you to read the Product Disclosure Statement and consider offerings carefully and seek appropriate financial advice.

Pilot peer support the key to preventing disasters JoSeph wheeler, afap legal counsel

Most people think pilots are infallible. Their voices calmly assure travellers in flight, and do so with conviction. But events which prompt speculation of pilot malice, like MH370, or point to frailties like Germanwings, remind us that pilots are people too.

Their weaknesses can dramatically become the world’s to mourn when calls for help go unheard, or when they don’t call for help at all.

The release of the French Bureau d’Enquetes et d’Analyses (BEA) report in March 2016 on the Germanwings crash pointed to a variety of contributing causes for the co-pilot’s wilful actions.

They included his likely fear of losing his ability to fly professionally if he reported his decrease in medical fitness to an aeromedical examiner, and the potential financial consequences that would have resulted if he confessed his illness to aviation authorities.

The key to addressing these issues lies in developing and fostering a culture of selfreferral of mental health concerns that is both unencumbered by a fear of airline disciplinary reproach or regulatory enforcement action, and which is culturally accepted throughout the industry.

Australia’s pilot associations and its regulatory regime lead the world with a mature approach to health issues facing pilots. They support, through policy, welfare initiatives, and legislation, self-monitoring and self-referral of serious medical complaints.

The Civil Aviation Safety Authority also facilitates the appropriate use of therapeutic medications in a way that balances the competing, though not mutually exclusive, interests of aviation safety and pilot welfare.

But is that enough?

For the travelling public and pilots themselves, more can be done to prevent unfortunate events like Germanwings.

The BEA report is a reminder that it is only through vigilance, continuous collaborative engagement through and with the medical profession, aviation regulators, airline and pilot professional associations, that we can be sure history won’t repeat.

So what is the solution? Piloting is a technically demanding, heavily scrutinised and unforgiving profession. Only pilots really know what the challenge of the constant, near-flawless performance demanded of them feels like. Accordingly, peer support within this community is vital.

In fact peer pilot support frameworks around the world have been found to be very successful in ensuring that reporting health concerns doesn’t impact on safety. Such systems encourage pilots to look after themselves, accept imperfections, and help each other identify concerns and seek suitable help.

Expectations of reprisals should not compete for priority with the genuine health needs of a silently suffering pilot and their family, nor be accepted by the public as an impediment to their safety.

The solution lies in encouraging the aeronautic equivalent of “looking after your mates”, wherein the culture of perfectionism gives way to a culture of compassion for self and colleagues.

The fact is all professionals should learn to recognise red flags, and encourage peers to get help when they need it. It is only after this concept completely permeates aviation culture that we can all be reassured that the nightmare of Germanwings won’t repeat.

www.afap.org.au// 2016// Your AFAP 19

someone to talk toâ&#x20AC;Ś Member assistance program

When you need someone to talk toâ&#x20AC;Ś

A free and confidential counselling service for AFAP members and their families, tailored specifically for pilots.

The Membership Assistance Program (MAP) has just completed itâ&#x20AC;&#x2122;s inaugural year as a resounding success. More than 20 pilots and/or their family members have utilised the service, sometimes just for one session, others for more intensive and ongoing treatment. All of those canvassed about the service said they found the service extremely helpful and beneficial.

even if it is just an objective and confidential professional to bounce ideas off, or to de-brief with post a meeting with your employer. MAP has also proved an indispensable resource for some pilots post incident, as they can provide specific critical incident response for pilots involved in an accident or incident.

The benefits of professional counselling are manifold- you can ...call for free and confidential counselling improve your relationships, gain strategies for overcoming MAP is uniquethrough when compared to employer fundedAssistance IAP hurdles at work, reduce depression and anxiety, increase your Member Program programs as you can be completely confident in total productivity and optimise your overall performance as a confidentiality and discretion, as well as added flexibility, as the professional.

AFAP may extend the support available as our members need it.

Pilots face particular stressors in their work sometimes. Further, The service can be utilised per issue, so AFAP members can 1 in 4 Australians has a mental health issue in their life time. It benefit from professional counselling whenever they need is important that our members continue to make good mental it and this may be over multiple occasions in a pilot's career. health and wellbeing a priority in 2016, and the AFAP will The primary issue that most pilots and their family members continue to devote ourselves this year to further developing our have been in contact with the service about so far pertain to welfare portfolio of benefits for our members. Look out for more relationships issues. Pilots face unique relationship stressors details coming up about our drug and alcohol intervention, the as a result of time spent away from home, night work and base HIMS program, as well as our burgeoning welfare council roles. transfers. Relationship issues can often be inter-related with (B.A .(Pshch). DRM, MA SRC) depression and anxiety and increased alcohol use. The MAP If you have an questions about the welfare portfolio, do not program can also provide support for work related issues, hesitate to call Cate Larkins at the AFAP office on (03) 9928 5737

1800 424 635

psychological health

interventions richardforby

level 4 507-509 kent street sydney nsw 2000 telephone 02 9264 2700 ...call for free and confidential counselling through your Member Assistance Program

1800 424 635

20

Your AFAP// 2016 // www.afap.org.au

facsimile 02 9398 4310 mobile 0413 155 36 psychological

healthemail richard@phi.com.au

interventions

Human Intervention Motivation Study - an occupational substance abuse treatment & confidential support programme run

by Pilots for Pilots

HIMS UPDATE Captains Brett Loeliger & Steve Lunn Dr. Navjyot Bedi Presentation (AM) & HIMS Australia Workshop (PM) “Virgin Village” , Brisbane 10 February 2016 Dr Bedi presented an excellent overview of the Science of Addiction, Assessment and Treatment.

He began by highlighting that addiction is a progressive brain disease and not a moral weakness. It was explained that existing “basic survival reward” neuropathic pathways can be stimulated and added to by the drug of choice and inevitably caused control issues in the future.

Dr Bedi stressed the importance of gathering objective and truthful information from factual sources as the assessment of professional pilots has very specific challenges. He also outlined that pilot treatment success lies in building a confidential partnership with stakeholders: CASA, DAME’s, and the treatment provider, Pilot Unions and the Company. Successful treatment and monitoring processes included the 12 steps from (Alcoholics Anonymous) incorporating Cognitive Behavioural Therapy techniques enabling a recovery state of mind. He then emphasised the welfare nature of a HIMS program ie, it had not only saved careers, but also lives. Without HIMS, pilots experiencing a mental health condition evolving from substance addiction are likely to find themselves unemployed which can only serve to exacerbate their existing condition. HIMS seeks to treat the patient, without it the patient is likely to be just punished.

Dr Bedi concluded by highlighting that HIMS is all about pilot health which requires dedicated support and treatment if and when required.

Please go to www.hims.org.au/More-Information/Video for an indepth addiction presentation by Dr Bedi.

Captains Matt O’Keefe and Julian Hipwell advised that GA HIMS is gaining traction with RFDS management supporting the development of a program. Isolated area locations will be challenging, but it was stated that devices such as Soberlink (remote breathalyzer) could be utilized during the monitoring process. Matt and Julian will attend USHIMS workshops and visit Talbot Recover centre in April 2016 with the aim of presenting HIMS pilot roadshows at RFDS bases around Australia in June 2016.

Captains Mike Migdoll (Cathay HIMS) and Chris Melhopt (AirNZ HIMS) reinforced the importance of a confidential “circle of trust” structure in a HIMS program with each stakeholder most

Guest Speakers: Addiction specialist Dr. Navjyot Bedi, Medical Director, Talbott Recovery Centre, Atlanta, Georgia and Dr. Virgilio Arenas, Consulting Faculty at Northwestern University Chicago, Illinois.

Present were: HIMS Australia stakeholders HAAG (HIMS Australia Advisory Group) with representatives from AFAP, AIPA, NZHIMS, Aircrew Officers Association of Australia (Cathay), RFDS, Rex, Qlink, Qld Government Air (Helicopters), CASA, Virgin Flight Operations (Paul Doherty, Andy Bauer, Simon Rolston and Rob Edney), DAME’s and medical personnel from Qantas,Virgin and external sources. Apologies from Gary Hammes, Virgin COO, Joe Wheeler AFAP Legal (sick) and Captain Dave Booth (on leave)

likely having to share some details for a successful and timely outcome. They also discussed some possible red flags in regard to monitoring guidelines.

Dr’s Simon May, Russell Brown, Mike Atherton and DAME’s discussed triggers that would require monitoring and treatment including the requirements to notify CASA. They also elaborated on the after care recovery guidelines that are already being practiced in some cases.

Pilots present also added the importance of a confidential pathway to a HIMS Peer Monitor and emphasised a “Don’t leave your mate behind” culture to assist in recovery.

Lastly, stakeholders were told that the HAAG (HIMS Australia Advisory Group) guidelines have been produced in a “draft” form and will be distributed amongst stakeholders for comment soon.

For more information please go to the HIMS Australia website www.hims.org.au and view the excellent videos on Addiction and the HIMS program overview.

Our next meeting will be held in May 2016 in Melbourne. www.afap.org.au// 2016// Your AFAP 21

frms UPDATE

first officer stuart beveridge The Company’s recent push to advance ‘efficiency’ has resulted in longer duties, fuller rosters and more call-outs. As a consequence, fatigue rates are much higher. There are certain things that pilots can do to eventually reduce the occurrence of fatiguing pairings and rosters. The following actions will resist the ongoing push to get ‘more out of less’.

Reporting As a component of safety management systems, the FRMS requires meaningful and constant reporting to inform its other processes. It’s repeated ad nauseam, but reporting is what pilots must do when encountering fatigue, just like any other safety hazard. One or even a few individual reports will not be enough to force a change. Rather, many in aggregate will highlight trends, which the Company will be obligated to address.

Advice for reporting fatigue •

• • •

Try to report as objectively as possible.

Avoid blatant expressions of emotion.

Writing your report a day or two later when you are more clear-headed may assist with this.

Include as much relevant detail as possible (remember you do not need to fill out all fields).

If possible, provide suggestions as to how the fatigue could have been avoided.

Remember, in line with the company’s ‘Just Culture,’ reporting on the natural state of fatigue is not self-incrimination.

Using Mitigators Pilots have a number of sanctioned measures when encountering fatigue on the line: • • • • 22

Pre-removal based on previous experience or self-projection of a fatigued state Mid-duty removal; Post-duty taxi home or accommodation; and In-flight controlled rest.

Your AFAP// 2016 // www.afap.org.au

All of these actions should be accompanied by a fatigue report. Also, pilots should never embark on a duty where they plan to utilise such measures in the latter stages. Report to crewing and remove yourself as soon as you feel this way.

Dual-Responsibility The AFAP recently made representations to the Company regarding a new policy on crew going fatigued. In short, if the duty in question is preceded by rostered time off then the fatigued crew have their sick leave debited instead. While the VPF opposes this and has undertaken to represent affected members where necessary, it is worth noting the origin of this policy.

The FRMS utilises a ‘dual responsibility’ philosophy which means the Company will provide adequate rest opportunity, and the individual will utilise rest periods responsibly in preparation for duty. In our view, this new policy is a poorly executed attempt to discourage a small number of pilots from undertaking inappropriate activities in their time off only to then go fatigued for work. What is important to note, in addition to reiterating the pilots’ half of ‘dual responsibility’, is that abusing the mitigation measures brings about such policies, and only serves to dilute the effectiveness and integrity of the FRMS. In any case, the AFAP supports pilots’ prerogative to remove themselves from duty due to fatigue, but reminds them of their responsibilities as well.

Rosters Fatiguing rosters may be the result of ineffective bidding. See your RFOM or PBS

advisor to ensure what you are asking for and what you want are the same.

Call-Outs Call-outs are a troublesome topic in the fatigue context. While the extra cash might make us all feel better, it doesn’t change our fatigued state or tendency for performance decrements. Furthermore, fatigue originating even partially from extra work drafting, rightly or wrongly diminishes the weight of the report and the pilot’s credibility and recourse. Is the monetary reward worth the risk of lengthy paperwork following an incident, or worse?

CAO48 These old and outgoing fatigue rules often come up in discussion: “I understood CAO48, what’s wrong with it?” or “If it was safe then why isn’t it now?”.

Notwithstanding the inadequacies of even its new replacement CAO48.1, prescriptive limitations in order to manage fatigue are demonstrably inappropriate, hence the movement away from these world-wide.

Due to its age and origins predating a vast amount of fatigue science and understanding, the old CAO48 has very little, if any, basis on underlying physiological factors that affect fatigue. Furthermore, fatigue by its very nature is an individual and sometimes subjective phenomenon, so cannot be delineated by limits where inside is considered safe and outside is not. FRMS replaces this philosophy by recognising the need for flexibility in this regard, and directs processes that must be undertaken to monitor and change rostering practices. This

includes the use of the latest fatigue science as well as, where necessary, conducting specific research to confirm that it is working the way it should.

EBA As might be expected, the drive for ‘more out of less’ might result in pushes to remove or diminish work rules in the EBA that chiefly serve to reduce or manage fatigue. While conscious effort must be taken to distinguish industrial and lifestyle provisions from safety and fatigue ones, any changes to the latter will require a

full analysis of the effects. The AFAP Safety & Technical resources are well equipped and ready to ensure that any forthcoming proposed changes do not affect the integrity of a fully functioning FRMS. Queries While this information mainly pertains to Virgin short-haul and long-haul operations, of course the general principles of fatigue and FRMS apply to all pilots. The AFAP awaits and is ready to assist in the implementation of FRMS at VARA and Tiger operations, which

are at various stages of development.

As always, any members with questions regarding the above, the Virgin FRMS, or fatigue in general are encouraged to contact VPF reps: FO Stuart Beveridge stuart.beveridge@afap.org.au or Capt. Joseph Kirchner joseph03@tpg.com.au

An Excerpt from AFAP’s HISTORY BOOK mary sheenan & sonia jennings; melbourne university publishing, 2010

Leonard Mervyn Diprose President 1943–45

Len Diprose was born in Launceston, Tasmania, in 1907. From a young age Diprose was interested in mechanical things, beginning with the family car, then moving on to an apprenticeship in fitting and engineering. In 1926 he began flying lessons at the Essendon Aero Club, Melbourne. After obtaining his private pilot’s licence, Diprose enlisted in the RAAF in 1928 and joined No. 1 Squadron. By the 1930s he was with West Australian Airways flying the Adelaide–Perth and Perth–Wyndham routes in a de Havilland DH-84 Dragon. In those days such trips could take up to two weeks, with many landings at rudimentary airfields and difficult weather conditions during the wet season. By 1936, as a result of several company mergers, Diprose was working for the newly formed Australian National Airways and was one of the first to fly the Douglas DC-2 on the inaugural twice-weekly Melbourne–Perth service.

Diprose was an early member of the Australian Institute of Air Pilots and Navigators (AIAPN) when it was formed in 1938. As flight superintendent of ANA in October 1938, Diprose was thrust into the spotlight when he was called on to give evidence at the public inquiry into the disastrous crash of ANA’s Kyeema. He was in a difficult position at the time, being called on to defend the safe operating procedures of his employer while also attempting to uphold one of the key aims of the institute, which was to defend the skills of the pilot. Perhaps being in this situation did not sit well with Diprose, as a year later he had left ANA to take up the position of chief pilot with a smaller operator, Associated

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Airlines, jointly owned and operated by BHP and the Zinc Corporation. Diprose was elected president of AIAPN in May 1943. In 1945, with the institute renamed the Australian Air Pilots’ Association and headquarters relocated to Sydney, Diprose did not stand again for presidency. However, he was unanimously elected vice-president and remained on the executive until 1949. In September 1948, when the association was requested to nominate a pilot to assist the judge in the Lutana Accident Inquiry, Diprose was appointed and undertook the role of an official assessor.

Len Diprose retired from active flying in 1964 but remained as chief pilot with Associated Airlines until 1967.

www.afap.org.au// 2016// Your AFAP 23

2015 ELECTED VPF REPRESENTATIVES

Rod Aldridge Capt. B737 VPF Chairman AIC Representative (Secondary) Editor Your AFAP

Scott Edwards Capt. B737 Membership

Brett Loeliger Capt. B737 Welfare Relief Editor Your AFAP

George Kailis Capt. B737 VPF Vice Chairman Editor Your AFAP

Stuart Beveridge FO E190 VPF Secretary Safety and Technical FRMS Governance (Primary)

Wal Gowans Capt. B737

Darren Gray Capt. B777 LH AIC Representative (Primary)

Steven Lunn Capt. B737 PBS Advisor Welfare Relief Editor Your AFAP

Captain Marcus K. Diamond Safety & Technical Consultant BscMelb

Darren Smith Capt. B737 PBS Advisor

Joseph C. Wheeler Aviation Legal Counsel MRAeS

David Booth Capt. B737 AFAP President SH AIC Representative (Primary) FDAP Governance Committee AusALPA President

Rowly Hipwell Capt. E190 AIC Representative (Primary) Communications

Deanna Cain Senior Industrial Officer LLB (Hons)

Captain John MacDonald Safety & Technical Consultant MCom Wol

Vaughan Bradshaw FO B737 VPF Convention Delegate Communications

Wayne Jericho Capt. B737 AAPMBF Trustee

Patrick Larkins Senior Industrial Officer LLB (Hons)

Captain Peter Gardiner Technical Director

Andrew Carson Capt. B777 LH AIC Representative (Secondary)

Joseph Kirchner Capt. E190 SH PWC Representative FRMS CAST Representative FRMS Governance (Secondary)

Simon Miller Industrial Advisor BA (Hons), LLB

Emma Young Business Development Manager BBA IBUS

Special thank you to all Virgin Group Pilots who wrote for this publication.

Chief Editors: George Kailis, Rod Alridge, Brett Loeliger & Steve Lunn Deputy Chief Editors: Emma Young & Serena Seyfort Contributors: Rod Aldridge, Stuart Beveridge, David Booth, Deanna Cain, Marcus Diamond, Wal Gowans, George Kailis, Patrick Larkins, Simon Miller, Steve Lunn, Brett Loeliger, Serena Seyfort, Joseph Wheeler, Emma Young Designed by: Emma Young & Serena Seyfort

Australian Federation of Air Pilots Level 4, 132-136 Albert Road South Melbourne VIC 3205 T: 03 9928 5737 W: afap.org.au E: admin@afap.org.au 24

Your AFAP// 2016 // www.afap.org.au

The views expressed in this journal in any article, letter or advertisement are not necessarily those of the Australian Federation of Air Pilots. The material in this publication may not be reproduced without the express written permission of the AFAP.