Qantas Airways Ltd chief executive Geoff Dixon said Australia's largest carrier will offer its workers a 3 percent pay rise as the airline improves labor productivity, simplifies its fleet and cuts overheads.
Dixon said he met 50 union officials in recent days to discuss the wage increase.
"We made it very plain that we appreciated their support and we obviously appreciate the support of all our people," Dixon told Channel Nine's Business Sunday program. "What we're doing is investing hugely in the company and they understand that."
Last week, the Sydney-based carrier said net income rose 1.5 percent in the six months ended Dec. 31 to a record A$357.8 million (US$276 million) as a surging Australian dollar reduced fuel and equipment costs. The airline saved A$73 million in labor productivity and A$113 million in fleet simplification.
This week Qantas will release details about its Jetstar discount airline, which is schedule to start in May, Dixon told Nine. The company started Jetstar in an effort to win back sales from Brisbane-based Virgin Blue Holdings Ltd, which has grabbed about a third of the domestic market since it started offering a discount service in August 2000.
Jetstar, which will be based in Melbourne, will start with 14 Boeing Co. 717-model planes. The service will expand with 23 single-aisle Airbus SAS A320 planes, which can carry 150 passengers each.
The airline's routes will be "quite extensive" on Australia's east coast traveling as far north as Cairns, Dixon told Nine. Qantas plans to extend the business to the western seaboard later, he said. Dixon wasn't specific.
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