A letter to customers from Gareth Evans – Jetstar Group CEO
17 December, 2019 - The last thing an airline wants to do is cancel your flight, especially at this time of year. But that’s the situation we’re confronted with at Jetstar at the moment. And you deserve to know why.
Firstly, the people at Jetstar do a fantastic job. Thousands of hard working, highly trained people who always put safety first and see the difference that low fares make to millions of travellers every year.
Across Jetstar, we’re offering three per cent annual wage increases. That’s higher than inflation and higher than what most companies are offering.
But the unions representing our pilots and ground handlers are pushing for an increase to wages and benefits of up to 15 per cent. And they are taking action at our busiest time of year to try and force our hand.
We don’t want to disrupt people’s travel plans, but we can’t agree to the unions’ demands. It would undermine our entire business model and our ability to offer low fares to the 38 million customers who travel with us each year - two thirds of whom pay less than $100 for their ticket.
Many Australians can only travel at these prices which is why we will not bow to the unrealistic and unsustainable demands of unions.
Jetstar is a profitable airline, so people might simply argue that we can afford to pay more. But consider that our Captains already make more than $300,000 a year. The increases that the union is pushing for would see some increase their salary by up to $60,000 a year. This has a compounding effect and can very quickly turn a profitable airline into an unprofitable one.
We won’t let that happen.
The pilots’ union has said they will not take action over the Christmas and New Year period. That is good news for thousands of travellers. But more strikes could take place after that. So, rather than waiting for it to happen, we’ve cut about 10 per cent of our domestic flights in January so that we improve our ability to absorb industrial action by parts of the workforce and still get people where they are going. Qantas will also help our passengers where it can.
We’re basically right-sizing our operation in light of the industrial action. January is Jetstar’s biggest month and the cut in flying (plus the disruption in December) will cost us up to $25 million. It will also impact local tourism, from hotels to restaurants and attractions. But it shows how serious we are about not giving in to unsustainable demands.
For those impacted by cancellations and delays, we are truly sorry. Our team is working around the clock to minimise any disruptions while this action continues – and while we protect the low fares that Jetstar is known for.