Jetstar has today announced that it’s cancelling 10 per cent of domestic flights in January to avoid having to “disrupt customers at short notice”.
It comes amid industrial action launched by the Australian Federation of Air Pilots and Transport Workers Union, which saw 90 flights cancelled over the weekend as pilots and ground staff went on strike.
“Due to the potential for ongoing action by the AFAP in particular, Jetstar is proactively adjusting its schedule for the rest of January by reducing domestic capacity by about 10 per cent,” the budget airline said in a statement on Monday.
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“Doing this well in advance will significantly reduce disruption in what is the airline’s busiest month of the year.”
As part of the airline’s contingency planning, they’ve also revealed plans to sell three long haul aircraft’s to protect their ongoing profitability.
“This review has identified three 787-8 aircraft operated by Jetstar that are serving loss making and marginal international routes,” Jetstar said.
“A business case has been developed to sell these three aircraft, with capital to be reinvested in other parts of the Qantas Group or returned to shareholders. A final decision is expected to be made in the first quarter of calendar 2020.”
Anyone who is booked on a flight operated by the above aircrafts will be contacted in the coming days and offered alternatives, including refunds.
The earnings impact of the January cancellations, in addition to the disruptions in December, is estimated to be approximately between $20 – $25 million.
“Industrial action doesn’t change the fact the wage claims being made by the TWU and AFAP are unsustainable,” Jetstar CEO Gareth Evans said.
“In the case of the pilots, the union is asking for what amounts to a 15 per cent 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.
“The TWU’s claims equate to a 12 per cent increase in costs for Jetstar ground crew who earn around $70,000 per year on a part time basis and around $90,000 per year on a full time basis. This is despite the same union agreeing to a three per cent wages deal in other parts of the Qantas Group.
“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. We apologise to the customers whose plans have been caught up in what the unions are doing.”