Pilots at Qantas’ low-cost carrier, Jetstar, are poised to stop work over the busy Christmas New Year period. The union representing Jetstar pilots has gone to the regulator to get the okay to hold a vote amongst its members regarding proposed industrial action. This follows a collapse in negotiations between the union and Jetstar management over a new enterprise agreement.

A report in Aviation Week has the union representing Jetstar pilots, The Australian Federation of Air Pilots (AFAP) asking the quasi-judicial regulator, the Fair Work Commission, for the okay to hold a vote to ascertain member support for industrial action.

The proposed industrial actions range from general work to rule enforcement (refusing to work outside of rostered hours) to a work stoppage of up to 24 hours. A Jetstar spokesperson told Simple Flying that any industrial action would be enforced by the Jetstar pilots who are AFAP members, noting that the bulk of the Jetstar pilots are.

A dispute over pilot pay and conditions

Jetstar management is reported to have offered Jetstar pilots a 3% annual pay rise. But AFAP wants a deal which would see pilots' costs rise 15%. This is more than the airline will accept. Wage growth is low in Australia, as is inflation (just 1.7% in the 12 months to September 30, 2019). 

The new enterprise agreement which the airline and union have been negotiating all year will set pay and employment conditions for the 800 odd pilots who work at Jetstar. Jetstar Captains currently earn between USD$206,700 and USD$219,390 per annum. First Officers earn between USD$125,050 and USD$158,910 per annum. These figures exclude discretionary bonuses.

According to AFAP, this is not enough. AFAP Executive Director, Simon Lutton, said;

"Jetstar pilots are paid significantly less than their counterparts at Tigerair, Virgin and Qantas and they are tired of not being valued as highly as their peers at other airlines.

Jetstar pilots are disappointed to have to take this step but ... they have been left with no choice."

In addition to salary issues, AFAP is saying its Jetstar members are subject to excessively tough rosters which Jetstar management is refusing to water down.

Jetstar denies overworking its pilots. It notes the AFAP has many claims and modifications that need to be dealt with. It says it takes fatigue issues very seriously and has a “robust” framework in place to deal with pilot fatigue. A Jetstar spokesperson told Simple Flying;

“It's very disappointing that the AFAP has applied for a vote on industrial action given we have been in constructive discussions about a new enterprise agreement since January. We remain committed to reaching an agreement for a new enterprise bargaining agreement to support the great work our people do every day, but not at any cost.”

Jetstar is facing softening economic conditions

Since launching in 2004, Jetstar has grown to become the dominant low-cost carrier in Australasia.  In the 2018/19 financial year, the airline had revenue of USD$2.69 billion, earnings before interest and tax of USD$250 million, and an operating margin of 9.3%. It is a ket profit center for the Qantas Group.

However, Jetstar is under some pressure from softening economic conditions and a weakening in demand. Revenue per seat in the September 2019 quarter was down 2.6%.

Strike action by airlines in Australia isn’t unknown. Virgin Australia’s low-cost subsidiary, Tigerair Australia, suffered through rolling industrial action earlier this year. The 1989 pilots strike still plays a starring role in the Australian IR landscape. In 2011, Jetstar’s owner, Qantas, shutdown the airline in order to bring recalcitrant unions to the negotiating table.

Jetstar is taking its submissions to Fair Work Australia today. Talks are continuing and parties hope to resolve the matter.