Qantas (QF, Sydney Kingsford Smith) has warned its pilots that it will create a lower-cost workforce if it cannot reach a pay deal soon on flying what will be the world’s longest commercial route, Reuters reported citing an internal email.

In December, the Australian airline chose the A350-1000 as the preferred aircraft type to launch Sydney Kingsford Smith-London Heathrow in the first half of 2023, but an order for up to 12 of them depends on reaching a deal with pilots by the end of March 2020.

The carrier has been in a stalemate with pilots over how much they will be paid to fly the Project Sunrise flights. But in his memo, Tino La Spina, chief executive of Qantas International, told them that the March deadline remained in place.

Airbus extended the delivery slots one last time once they knew they were the preferred supplier, but they are not willing to continue their exposure beyond that point,” he said, adding that the carrier had developed a “fallback” plan in case the impasse with pilots could not be broken.

“We will be left with no viable alternative but to have Sunrise flying performed by a new employment entity that can provide the cost base we need for this important business opportunity,” the email continued, as quoted by the Sydney Morning Herald. “To be absolutely clear, this is not our preferred option. And we know that flagging this will not be well received by many of you. But we want to make sure you have all the relevant information when you are weighing a decision.”

La Spina said that soon Qantas would offer a salary deal to pilots to vote on, including a 3% annual pay rise, if an agreement was not possible with their union, the Australian and International Pilots Association (AIPA).

Mark Sedgwick, AIPA's president, commented that “such unnecessary threats will unfortunately precipitate a new low in employee engagement at Qantas. Project Sunrise involves multiple safety and regulatory issues that AIPA on behalf of pilots has been working through.”