Qantas eight weeks away from running out of money at height of COVID-19 pandemic, court told
Qantas was eight weeks away from running out of money at the height of the COVID-19 pandemic, a Sydney court has heard.
The Australian Licensed Aircraft Engineers Association has taken the airline to the Federal Court, challenging the legality of standing down about 450 Qantas and Jetstar maintenance engineers.
The workers were among two-thirds of the workforce stood down without pay as passenger numbers plummeted in mid-March.
Qantas is seeking a declaration that there was a stoppage of work for which it cannot reasonably be held responsible.
Barrister Rowena Orr QC, for the airline, said the pandemic and the measures taken by governments to control its impacts were not foreseeable.
The stoppages were caused by “external events” which “challenged the very viability of Qantas and Jetstar”, she said.
“By late March this year, the Qantas group had formed the view that if they continued to operate their regularly scheduled flights … the group would have exhausted its existing cash reserves within a period of eight to 10 weeks,” Ms Orr told the court on Monday.
By the time Qantas made the decision to stand down workers, every other “cost-saving measure” had been explored and implemented, she added.
“The alternative was to continue conducting flights with no, or very few, passengers in the hope that conditions for air travel would return to normal which, of course, has not proven to be the case,” Ms Orr said.
“It would ultimately have put at risk the jobs of all of the group’s employees.”
Qantas claims the move was made in accordance with stand-down clauses in enterprise agreements which enable it to stand down employees who cannot be “usefully employed”.
According to the agreements, this may be done if the reason is a “stoppage of work through any cause for which Qantas cannot reasonably be held responsible”, or in Jetstar’s case, “by any cause which Jetstar cannot reasonably prevent”.
The association’s barrister, Lucy Saunders, argued there had been a decision to stop work to then justify stand-downs.
“You are choosing to fly or not to fly,” she said, adding there may have been economic imperatives that informed the decision.
“It’s a choice, as soon as it becomes a choice, that decision to stand down is a matter within someone’s control.
“A lack of customers — no matter how stark, no matter how externally motivated — isn’t itself a stoppage of work.”
Justice Geoffrey Flick has reserved his decision.