Airline News
Aussie airlines talk change, for better or worse
October 28th 2014
Qantas Airways has reached a four-year pay deal with its aircraft engineers, which includes an 18-month wage freeze, followed by annual increases of 3%. Read More »
The settlement is a major step towards achieving the goal of Qantas chief executive Alan Joyce to freeze pay across the company as part of efforts to strip A$2 billion ($1.76 billion) in costs from the business within three years after posting what Joyce called a “confronting” A$2.8 billion net loss in the last financial year.
Qantas wants to strike similar deals with its short-haul pilots and ground staff, but the latest talks have shown no signs of an early resolution.
Meanwhile, Qantas has unveiled a new fully-flat business class seat for its A330 fleet, the first ever to allow for a partial recline and mattress installation during take-off and landing. The new seat will be progressively rolled out from December through to the end of 2016.
Australian rival carrier Virgin Australia last month announced similar plans to outfit its A330 and B777 fleets with new premium cabins, though first installation will not be completed until March.
In other news, Virgin this week said it is likely to use hitherto domestic-only subsidiary Tigerair Australia on international routes to better compete with Jetstar in the low-cost market, subject to regulatory approval.
At the same time, its chief executive John Borghetti said the growth plans of the Tigerair domestic fleet are “likely to be reduced”, given the “ongoing subdued consumer demand” in the Australian market. When Virgin first bought its Tigerair share in 2013, it signalled that the fleet could be expanded to up to 35 aircraft, up markedly from its current count of 13 A320s.
Virgin wants to acquire the remaining 40% stake in loss-making Tigerair Australia currently held by Tiger Airways Holdings Singapore for A$1. The transaction is expected to be completed before the end of this year.
Brisbane-based Virgin last week reported an A$59.1 million ($52 million) net loss for the first quarter of the 2015 financial year ended September 30. This represents an 18.3% improvement over the prior-year period, despite the first quarter being traditionally a seasonally weaker period for the airline.
Revenue increased 1.3% year-on-year, but continued weakness in leisure demand held group yield largely flat, bringing revenue load factors down 0.3% to 79.4%.
