Jetstar Airways (JQ, Melbourne Tullamarine) is considering selling three of its B787-8s, due to the aircraft either operating loss-making or marginally-profitable routes, according to an airline press release. The Qantas Group low-cost carrier (LCC) currently has a fleet of 11 of the widebodies, as well as fifty-one A320-200s and eight A321-200s.
A final decision on the fate of the aircraft is expected in 1Q 2020 and comes at a time of labour union discord at Jetstar. Capital from the disposal, if undertaken, will either be reinvested in other parts of the group or returned to shareholders, the airline said.
Two trade unions within the airline, the Australian Federation of Air Pilots (AFAP) which represents its pilots, and Transport Workers Union (TWU) which represents ground handling staff, are demanding an increase in wages and benefits of up to 15% versus the 3% hike being offered by the airline to all of its staff. To reinforce their wage demands, AFAP and TWU members took strike action last weekend, with walkouts on Friday, Saturday, and Sunday.
Jetstar is expecting the strikes to continue throughout December and, should they persist into January, could cost it up to AUD20-25 million Australian dollars (USD13.7-17 million). The planned sale of the three B787-8s is expected to help plug the financial gap. In addition, it is also reviewing its network in light of the industrial action.
In anticipation of any strikes in January, Jetstar will cull around 10% of domestic flights, to improve its ability to absorb any disruption. No strike action is planned over the Christmas and New Year period.
The airline's Chief Executive Officer Gareth Evans is talking tough especially about the pilots union's demands which could increase their annual salary by up to AUD60,000 dollars (USD41,082) for those Captains already earning AUD300,000 dollars (USD205,409). He said that the airline is "not giving in to unsustainable demands" and that he would not allow the current situation to "turn a profitable airline into an unprofitable one."
