Safety violations exposed at Jetstar Pacific

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Officials at besieged no-frills carrier Jetstar Pacific (JPA), part-owned by Australia's Qantas, repeatedly allowed the breach of safety regulations, investigators at Vietnam's top aviation authority have said.

The Civil Aviation Administration of Vietnam (CAAV) said in a report released this week that three Jetstar managers had failed to monitor maintenance work properly and had not fulfilled JPA's commitment to safety.

Of the three managers implicated, JPA's former general director Luong Hoai Nam was arrested last week and accused of costing the airline US$31 million by purchasing fuel while prices were high via fuel hedging in 2008, the report said. Nam resigned from his post late last year.

The other two officials were Atanas Stankov and David Andrew, who headed the airline's technical quality and maintenance sections respectively.

"Key JPA executives have to take responsibility for these systematic mistakes," the CAAV said in the report.

In addition to the three JPA staff members implicated in the CAAV report, two other executives, Chief Operating Officer Daniela Marsilli and Chief Financial Officer Tristan Freeman, have also been barred from leaving Vietnam pending an investigation into the fuel hedging losses.

Hedging is used by airlines to stabilize fast-changing jet fuel prices, committing them to an agreed price for future sales.

 Speaking after Nam's arrest, Qantas chief executive Alan Joyce said Marsilli and Freeman had done nothing wrong.

CAAV deputy director Lai Xuan Thanh said JPA had made numerous mistakes which put flights at risk. According to the report, the CAAV discovered several problems including faulty maintenance equipment, inefficient maintenance systems and poorly-trained technicians.

Among the dangerous practices identified was the removal of a defective anti-icing pipe that, instead of being replaced, was allegedly welded and placed back in the aircraft by an unauthorized contractor, according to the report.

CAAV said it had issued five maintenance-related fines to JPA in 2008-2009 and recommended that "urgent" measures be taken at the airline to rectify the situation, but the directive had fallen on deaf ears.

The report also found that maintenance staff had deliberately covered up the discovery of broken aircraft parts and had failed to record procedures in the aircraft's technical diary on several occasions.

Whistleblowers

STAINS ON
JETSTAR'S RECORD

OCTOBER 2009

Debate over airline trademark

Government regulators demanded again that Jetstar Pacific Airlines drop its Jetstar logo, an order initially given in June 2008. The government said it was concerned the trademark would cause confusion between the Vietnamese airline and Australian carrier Jetstar Airways. But JPA said it has the right to use Jetstar's brand name as it already signed an agreement with Jetstar Airways.

NOVEMBER 2009

Allegations by ex-chief engineer Bernard John McCune of several failings

McCune, in a letter also written on behalf of his colleague Digger King, alleged that JPA failed to follow proper maintenance procedures, including monitoring wing engines, leading to the breakdown of two engines of a plane within one week due to overheating. Both employees had been fired in October.

JANUARY 2010

Former Jetstar Pacific director Luong Hoai Nam was arrested for "irresponsibility causing serious consequences."

The carrier was approved to resume maintenance operations after its maintenance license was revoked in November due to inspections that found flaws in its safety check.

CCAV also said JPA had no legal grounds to fire its former chief engineer, Bernard John McCune and his colleague Digger King. The two employees, who sent a letter to CCAV in November describing safety violations at the airline, had been dismissed in October.

Thanh said the safety violations the letter denounced had taken place though they were not as serious as it alleged. Under Vietnamese labor law, employees cannot be fired without cause.

JPA is 27 percent owned by Australia's Qantas Group, according to the airline's website, which says the carrier was known as Pacific Airlines until May 2008. Qantas has the right to lift its stake in Jetstar Pacific to 30 percent by mid-2010.

The State Capital Investment Corporation of Vietnam now holds 70 percent of Jetstar Pacific's shares. Three percent are owned by the Ho Chi Minh City-based state-owned SaigonTourist.

Under the lens

Thanh from CAAV said JPA had 30 days to remedy the problems cited in the investigation or face revocation of its license.

Pham Quy Tieu, Vietnam's Transport Deputy Minister cum CAAV head, said on Wednesday that CAAV had placed JPA under special scrutiny and inspections would be beefed up ahead of every flight by the carrier.

"We have to do so to prove to future inspectors from the International Civil Aviation Organization that Vietnam is equipped to ensure the safety of every flight," Tieu told the media.

The Australian Associated Press (AAP) reported on its website yesterday that the Transport Workers Union (TWU) intended to question Jetstar employees in Vietnam over the alleged safety breaches by the airline.

The TWU said it has been investigating the Qantas group of companies for alleged safety breaches for several months and has requested a meeting with delegates and employees from the company in Vietnam, AAP reported.

"The unions want to investigate how a Qantas subsidiary is behaving overseas and whether or not they are flouting international aviation safety laws," TWU spokesman Tony Sheldon said in a statement on Thursday.

He said union members also wanted to know whether Vietnamese, Australian or International Labor Organization standards were being followed.

"Qantas is an Australian icon - with a majority owned by the Australian community," Sheldon said.

"We do not want to see its brand cheapened because executives are putting their bonuses before safety and security."

If the Vietnamese government agrees to the union's request, an independent observer would also travel to Vietnam to investigate the CAAV's findings, Sheldon added.

Qantas has not responded to requests for comment.

Reported by Thanh Nien staff

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