- Jetstar has announced it will cancel 10% of its domestic flights in January, as part of a “contingency plan” if industrial action continues.
- The low-cost airline has been subject to industrial action from both the Australian Federation of Air Pilots and the Transport Workers Union in recent weeks.
- The unions argue Jetstar’s claims about employee wage demands are overblown.
- For more stories, visit Business Insider Australia’s homepage.
Low-cost airline Jetstar has announced it will slash 10% of its flights in January, as it plans for the possibility that industrial action by the Australian Federation of Air Pilots (AFAP) and the Transport Workers Union (TWU) will continue
In a statement, Jetstar said it was pulling the trigger on the cancellations early to “avoid disrupting customers at short notice” in what the company says is its busiest month of the year.
“There’s no doubt that industrial action is expensive and frustrating, but we have to hold the line on costs or it threatens the long term sustainability of our business,” Jetstar CEO Gareth Evans said in a statement. “We apologise to the customers whose plans have been caught up in what the unions are doing.”
Additionally, Jetstar says it has identified three 787-8 aircraft it owns which serve “loss-making and marginal international routes” and could feasibly be sold. The company says this potential sale is part of contingency planning to protect the airline’s ongoing profitability, and a decision would be made in the first quarter of 2020.
The pilots union has confirmed it will not take any industrial action from December 20 to January 3 to minimise travelling disruptions for the public, but has left the door open for possible action after that.
“Jetstar pilots and the AFAP ensure that industrial action will not be taken over Christmas to New Year to protect this holiday period for the travelling public,” AFAP executive director Simon Lutton said in a statement earlier this month. “We are hoping to resume discussions with the company to reach an agreement so that no further action needs to be taken after this period.”
Speaking to the Sydney Morning Herald this morning, Lutton said the flight cuts were not necessary as the AFAP was not planning further strike action.
“We sincerely hope we don’t need it. If we do, that will be as a result of Jetstar not because we wanted to,” he told the paper.
In an email to Business Insider Australia, a spokesperson for Jetstar said a list of cancelled flights had not been released, but that affected customers would be informed by email and SMS.
The airline argues the unions’ demands are ‘unsustainable’
In its statement, Jetstar’s CEO suggested it would be unwilling to accept the wage demands of the AFAP and the TWU.
“Industrial action doesn’t change the fact the wage claims being made by the TWU and AFAP are unsustainable,” Evans said. “In the case of the pilots, the union is asking for what amounts to a 15% wage increase in the first year in a group where captains earn more than $300,000 a year. For some groups, their salaries would increase by $60,000. We can’t agree to that.”
That 15% figure has been touted by Jetstar since the beginning of the dispute, but the AFAP argues it is inflated.
“Assertions by Jetstar that we are seeking a 15% increase are simply untrue,” Lutton said in a statement last week. “The AFAP wage claim is for 3% annual increases to salary.”
Lutton argues that 15% figure comes from “flawed costings” of the AFAP’s non-salary claims.
Jetstar alleges the TWU’s claims – which are separate from the AFAP’s – would result in a “12% increase in costs” for Jetstar ground crew. “This is despite the same union agreeing to a three per cent wages deal in other parts of the Qantas Group,” the CEO said in a statement.
The TWU disputes Jetstar’s characterisation of the industrial action, and says the company could resolve the dispute with baggage handlers and ramp workers for “just 90 cents extra an hour”.
“With the money Jetstar is spending on cancelling flights and upsetting holiday plans it could have solved this issue by now,” TWU national secretary said in a statement provided to Business Insider Australia.
“Our claims are modest: the average guaranteed pay that a baggage and ramp worker gets is around $650 per week. Workers at most are guaranteed 30 hours per week, some are guaranteed as few as 20. All these workers are looking for is at most 90 cents per hour, that means for many an increase of just $19 per week.”
“We want to work with the company to help lift standards and make this a great airline,” he added.
But we need the company to meet us halfway.”
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