Qantas is to appeal the Australian Federal Court’s watershed judgment that it contravened the Fair Work Act in outsourcing the remainder of its ground handling functions, setting the scene for a protracted confrontation with the Transport Workers Union which is pushing for the nearly 2000 workers to be reinstated.

Federal Court Justice Michael Lee called into question the evidence of both Qantas domestic chief executive Andrew David, as well as former chief operating officer Paul Jones describing it as “unconvincing” in relationship to the TWU’s claim that the airline was using the pandemic as “transformational opportunity” lay-off the workers who could disrupt operations in 2021 by taking protected industrial action.

Under the Fair Work Act, Qantas had to prove that it didn’t take into account a prohibited reason when it decided to outsource the ground-handling operations.

TWU National Secretary Michael Kaine said the Federal Government refused to hold Qantas to account over the illegal outsourcing but that the workers had.

“This judgment is a watershed moment for workers in Australia. The Federal Court has ruled that workers cannot be bypassed by employers like Qantas which want to drive down wages and conditions.

“This ruling calls a halt to shifting responsibility for workers and outsourcing them onto third parties on a low cost, take-it or leave-it contract.”

Mr Kaine added that “workers will be expecting their jobs as soon as possible and we will be seeking meetings with Qantas to ensure this happens.”

Qantas said it fundamentally disagrees with the judgment and said it does not mean it is required to reinstate workers or pay compensation or penalties as these matters have not yet been considered by the Court and Qantas will oppose any such orders.

Qantas group executive John Gissing, said “the TWU has put forward its persecution complex that our decision to save A$100 million a year in the middle of a global downturn was really about stopping them from walking off the job at some time in the future.

“The fact is, Qantas deals with the operational risk of industrial action on a regular basis given the 50-plus agreements across the Group. That risk pales in comparison with a pandemic that has grounded our fleet and our people for months, and has so far cost us $16 billion in revenue.”

“Qantas was motivated only by lawful commercial reasons, and this will be the subject of our appeal,” Mr. Gissing said.

In August last year, Qantas advised it would outsource ground handling operations at 10 airports across Australia as part of its COVID recovery plan and would save $100 million a year.

It called for bids from outside ground handlers and gave the workers the opportunity to bid for the work.

In November it advised the workers’ bid was unsuccessful despite the TWU claiming it was competitive.

Qantas said it granted three separate extensions to the original deadline and claimed the TWU bid was “theoretical, with no roadmap of how projected cost savings would be achieved.”

Specialist ground handlers and caterers are common across the industry.

Airbus has launched its much anticipated A350 freighter as it ramps up production of its top-selling A320 with Qatar Airways a major target for the freighter.

The news comes as Airbus reports that its consolidated revenue for the first half of 2021 increased 30 percent year-on-year to €24.6 billion (US$29.16) from €18.9 billion, mainly reflecting the higher number of commercial aircraft deliveries compared to H1 2020.

Airbus said that a total of 297 commercial aircraft were delivered (H1 2020: 196 aircraft), comprising 21 A220s, 237 A320 Family, 7 A330s, 30 A350s and 2 A380s.

Revenues generated by Airbus’ commercial aircraft activities increased 42 percent, largely reflecting the increased deliveries.

Airbus Helicopters delivered 115 units (H1 2020: 104 units) with revenues up 11 percent reflecting growth in services and higher volume in civil helicopters, while revenues at Airbus Defence and Space were broadly stable compared to a year earlier, with two A400M military airlifters delivered in H1 2021.

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Airbus Chief Executive Officer Guillaume Faury said “these half-year results reflect the commercial aircraft deliveries, our focus on cost containment and competitiveness, and the good performance in Helicopters and Defence and Space.

“Although the COVID-19 pandemic continues, the numerous actions taken by the teams have delivered a strong H1 performance. This enables us to raise our 2021 guidance although we continue to face an unpredictable environment.

“We are now working to secure the A320 Family ramp up while transforming the industrial setup. Furthermore and following Board approval, we are enhancing our product line with an A350 freighter derivative, responding to customer feedback for increased competition and efficiency in this market segment.”

Airbus said that gross commercial aircraft orders totaled 165 (H1 2020: 365 aircraft) with net orders of 38 aircraft after cancellations (H1 2020: 298 aircraft). The order backlog was 6,925 commercial aircraft on 30 June 2021.

Airbus Helicopters booked 123 net orders (H1 2020: 75 units), including 10 helicopters of the Super Puma Family. Airbus Defence and Space’s order intake by value was €3.5 billion (H1 2020: €5.6 billion).

Consolidated EBIT (reported) amounted to €2,727 million (H1 2020: € -1,559 million).

As the basis for its 2021 guidance, Airbus said it assumes no further disruptions to the world economy, air traffic, the Company’s internal operations, and its ability to deliver products and services.

It targets to achieve 600 commercial aircraft deliveries with EBIT Adjusted of €4 billion with Free Cash Flow before M&A and Customer Financing of €2 billion.

The Boeing Company has reported second-quarter revenue of $17.0 billion, driven by higher commercial airplanes and services volume with GAAP earnings per share of $1.00 and core earnings per share of $0.40 on commercial volume and lower period costs.

That bullish result has pushed its shares up 6 per cent to $235.70.

The company recorded core operating earnings of $755 million in the quarter compared to a loss of $3.319 billion in the year-ago quarter.

“We continued to make important progress in the second quarter as we focus on driving stability across our operations and transforming our business for the future,” said Boeing President and Chief Executive Officer David Calhoun.

“While our commercial market environment is improving, we’re closely monitoring COVID-19 case rates, vaccine distribution, and global trade as key indicators for our industry’s stability. As we continue to position for a robust recovery, we remain committed to safety and quality, while investing in our people, products, and technology. I am proud of our team’s resilience and commitment as we work to rebuild trust, improve our performance and deliver for our commercial, defense, space, and services customers.”

Boeing said its operating cash flow improved to ($0.5) billion in the quarter, driven by higher commercial deliveries, higher-order receipts, and lower expenditures.

Analysts Bernstein said this was a very good result and significantly above the consensus estimate of -$2.8bn.

“We continue to view cash flow as more important than reported earnings, due to the
effects of program accounting. Better than expected FCF came primarily from working capital changes, with cash coming in from MAX deliveries, less cash out for widebody inventory, PDPs coming in for new orders, and lower compensation payments,” Bernstein said.

Boeing said Commercial Airplane’s second-quarter revenue increased to $6.0 billion primarily driven by higher commercial airplane deliveries. The second-quarter operating margin improved to (7.8) percent, primarily due to lower period costs as well as higher delivery volume.

Since the FAA’s approval to return the 737 MAX to operations in November 2020, Boeing has delivered more than 130 737 MAX aircraft and airlines have returned more than 190 previously grounded airplanes to service.

Over 30 airlines are now operating the 737 MAX, flying nearly 95,000 revenue flights totaling more than 218,000 flight hours (as of July 25, 2021) said Boeing.

It reports that the 737 program is currently producing at a rate of approximately 16 per month and continues to expect to gradually increase production to 31 per month in early 2022 with further gradual increases to correspond with market demand.

Boeing said it is conducting inspections and rework and continues to engage in detailed discussions with the FAA on verification methodology for 787. Boeing announced earlier this month that it has identified additional rework that will be required on undelivered 787s.

Commercial Airplanes delivered 79 airplanes during the quarter and the backlog included over 4,100 airplanes valued at $285 billion.

Defense, Space & Security second-quarter revenue increased to $6.9 billion driven by higher KC-46A Tanker and P-8A Poseidon volume.

Backlog at Defense, Space & Security was $59 billion, of which 32 percent represents orders from customers outside the U.S.

Global Services second-quarter revenue increased to $4.1 billion and second-quarter operating margin increased to 13.1 percent primarily driven by higher commercial services volume.

Boeing has released its first Sustainability Report charting its vision for the future of sustainable aerospace, establishing broad sustainability goals while highlighting environmental, social, and governance (ESG) progress.

In September 2020, Boeing formed a Sustainability organization to advance its ESG efforts across the enterprise and this is the first of what will be an annual report.

Boeing Chief Sustainability Officer Chris Raymond said “we know there’s still work to do and are committed to communicating our progress and holding ourselves accountable to ensure the aerospace industry is safe and sustainable for generations to come.”

The aerospace giant’s sustainability efforts are organized around four key pillars: people, products and services, operations, and communities.

During 2020 some of the highlights across these four pillars included defining the company’s vision for the future of sustainable aerospace through fleet renewal, network operational efficiency, renewable energy, and advanced technology and committing to deliver commercial airplanes capable of flying on 100 percent sustainable fuels by 2030.

It also partnered with Etihad Airways on the 2020 ecoDemonstrator program, which tested sustainable technologies on one of the airline’s new 787-10 Dreamliners and advanced flight tests for Cora, an all-electric, self-flying air taxi developed by Boeing and Kitty Hawk joint venture Wisk.

On the production side, it implemented digital engineering tools on the T-7A Red Hawk program and achieved a 75 percent increase in first-time engineering quality and an 80 percent reduction in assembly hours.

For the company itself, it established a 20-member Racial Equity Task Force to represent diverse viewpoints and amplify all voices, and set 2030 environmental performance goals to reduce emissions, waste, water use, and energy consumption.

It also achieved net-zero carbon emissions at its worksites, while reducing energy consumption by 12 percent, water use by 23 percent, solid waste by 44 percent and hazardous waste by 34 percent.

Boeing also contributed US$234 million in community giving, working with 13,400 community partners and volunteering 250,000 hours.

More information on these and other sustainability accomplishments can be found in the full report.

A much fitter Qantas is promising its staff huge potential but warns of possible stand-downs if the current lock-downs drag on too long.

In a rallying email to staff, Qantas chief executive Alan Joyce said that now, as thousands of flights are canceled, “it might not feel like it some days, but there are lots of reasons for us to be positive.”

“We are much fitter than pre-COVID and we know this business has huge potential once we’re all back in the air.”

Mr. Joyce assured staff that “what we’re experiencing is temporary and unlike last winter there’s now a COVID vaccine rolling out, and that means this cycle of restrictions and lock-downs will break. In other words, there is an endpoint to all of this and it’s not far away.”

The Qantas Group’s domestic flying has been slashed from 90 percent of pre-COVID levels to 60 percent off the NSW lockdown and the Victorian and South Australian lock-downs have brought that number down to just 40 percent.

Intra Western Australian and Queensland flying are the shining lights and account for the majority of the rest.

One of Qantas’s competitors, REX, has grounded its fleet of six 737s because of the lock-downs.

Mr. Joyce told staff there were two scenarios with the first that “the outbreaks can be brought under control soon and we can bring capacity back.

“We know travel demand rebounds quickly and, if the current lock-downs end when scheduled, then Group domestic capacity should be back at around 60 percent in August and up to 80-90 percent in September-October.

However, the staff email was sent out before the worsening numbers in NSW and Victoria were announced which means that the second scenario outlined by Mr. Joyce of stand-downs may loom on the radar.

Mr. Joyce told staff that if these lock-downs drag on for much longer than expected the airline group would be faced with continued levels of low flying.

Under that second scenario, the airline expects support packages to be offered by the government to provide a basic level of income support directly to those eligible, depending on the criteria set.

However, it warns that some stand-downs would be inevitable.

“We can’t rule it out if multiple states keep their borders closed for extended periods,” Mr. Joyce said.

Insiders at Qantas tell WestBusiness however that stand-downs are a last resort and are months away.

Mr. Joyce told staff that “just as the vaccine roll-out will turn the tide on this pandemic our recovery program is changing how the Qantas Group is placed on the other side.”