LONDON – Australian regional carrier Rex Airlines has found itself embroiled in a labour dispute over a rejected pay increase proposal for its SAAB 340 pilots.
The wages issue revolves around a rejected pay increase proposal of 5.1% for the pilots of the carrier’s fleet of 60 SAAB 340 twin turboprop aircraft.
After ongoing negotiations, the recent offer proposed an initial pay increase with a rise to 8% once the company returned to solvency.
In a statement issued on 7 June, Rex Airlines (RXA) expressed their disbelief at the pay offer being rejected by the pilots’ union, the Australian Federation of Air Pilots (AFAP).
The source of their frustration lies in the fact that the union approved a lower pay rise proposal last year for rival carrier QantasLink.
Rex Airlines deputy chairman, the Hon John Sharp AM said: “Just last September, the AFAP agreed to a 2% pay rise in 2021 and 2022 for QantasLink pilots saying, ‘we are pleased to have arrived at a pragmatic outcome for the QantasLink pilot group’”.
“Rex on the other hand has offered its SAAB pilots a 5.1% pay rise from 1 July 2022, plus significant catch-up payments worth another 8% once the business is profitable again.”
Mr Sharp appears to blame the pilots’ union for the breakdown in negotiations, saying:
“We believe the vast majority of our pilots are company-minded and can see through the hypocrisy of the AFAP. Rex is the only airline that has not retrenched any of its pilots and it has stood by them through the difficult COVID years.”
We believe that they will stand by the Company during this period where the recovery is nascent and the Company is still fragile,” Mr Sharp added.
Implications of a strike
A strike action by pilots has potential implications for many Australian regional areas. Rex is currently the main operator servicing regional Australia. Its fleet of 60 SAAB 340s is the mainstay of its operation, which also includes 6 Boeing 737-800 NG aircraft.
The carrier services 62 destinations throughout all 7 Australian states and territories. Whilst it does service some capital cities, it is the vast regional areas which may be impacted most by a strike action.
Recent route changes & QantasLink competition
The current pay dispute comes off the back of last month’s announcement by the airline of its withdrawal from 5 regional routes which it could not subsidise in the present challenging environment.
In a statement on 6 June, Rex reasserted their decision to withdraw from the 5 marginal routes whilst making clear that they would be closely monitoring their entire regional network with the possibility of further changes being announced in coming months.
The airline also cited what it described as ‘predatory conduct’ by its competitor QantasLink on regional routes.
Rex’s current regional operations are about 90% of pre-COVID levels, with passenger uplift on flights at a similar level. The airline estimates that it will return to 100% of pre-COVID levels at the start of the new financial year.