Qantas: Ongoing industrial dispute cuts 1H profit by 66%
Published: November 29, 2011
Qantas A380. By Rob Finlayson
Qantas (QF) said the extensive industrial action taken by its three labor unions has cost the airline A$ 194 million ($ 195 million). Combined with soaring fuel costs, the airline’s first-half profit will be slashed by up to 66%.
On Monday, QF advised the Australian Stock Exchange that its underlying profit before tax for the six months to Dec. 31 is expected to fall to between A$ 140 million and A$ 190 million, down from A$ 417 million for the same period last year, as a result of the 10-month dispute.
Fair Work Australia has been called upon to resolve the battle between Qantas and its three unions—the Australian Licensed Aircraft Engineers Assn., Australian and International Pilots Assn. and the Transport Workers Union—over new labor contracts, which culminated in QF grounding its fleet Oct. 29 ( ATW Daily News, Nov. 22 ).
QF said the cost of all the stoppages up to the Oct. 29 grounding was A$ 68 million; the grounding itself cost A$ 70 million, plus a A$ 27 million impact on forward bookings and A$ 29 million for initiatives to placate passengers.
QF CEO Alan Joyce said that if the industrial campaign had continued, “the impact on the business would have grown to A$ 85 million a month.”
Separately, there is speculation in Australia that there may be a renewed takeover bid for QF from a private equity group after it was revealed that former QF CEO Geoff Dixon had considered taking a stake. Dixon told The Australian that his consortium had decided “right now is not a good time,” but he believed others might be looking at a move. “Despite all that has happened, I am pretty bullish on Qantas. It is a terrific airline. It has a terrific set of assets,” Dixon said.
Dixon was the architect of the failed A$ 11 billion Airline Partners Australia equity buyout of QF in 2007 ( ATW Daily News, May 7, 2007 ).