Qantas Airways Ltd saw its shares push to their highest level in more than a month on Thursday after reaching an in-principle settlement with the union representing its long-haul pilots. The stock was trading up 0.5% at A$10.65 after earlier touching an intraday peak of A$10.76, its strongest since June 26, and outperformed the broader S&P/ASX 200 index, which rose 0.3%.
The provisional agreement applies to about 1,700 long-haul pilots who operate Qantas' Airbus A380 and A330 aircraft and Boeing 787 jets, mainly on international routes. Short-haul pilots are governed by a separate agreement and were not included in the deal.
The breakthrough follows a recent vote by long-haul pilots in favour of protected industrial action. That ballot authorised measures such as 24-hour work stoppages and delayed sign-ons after several months of negotiations over pay and working conditions.
The Australian and International Pilots Association said discussions at the Fair Work Commission yielded broad agreement and the union expressed hope the arrangement would be formalised in the coming days.
Qantas described the outcome as an "in principle agreement" that would provide significant pay increases, improvements to rostering and additional opportunities for career progression while aiming to balance the needs of the business.
Market reaction reflected relief that a central operational risk for the airline - potential disruptions to international services - has been materially reduced ahead of the busy travel season. Nonetheless, labour issues remain in the spotlight: a union representing about 650 Qantas ground workers has announced its members will soon vote on whether to take industrial action.
Context and implications
- The provisional pact targets long-haul operations and directly affects staff who fly Qantas' larger international aircraft.
- Share price movement suggests investors priced in reduced near-term strike risk for international routes.
- Remaining unionised groups, in particular ground staff, continue to represent potential sources of disruption until their ballots are resolved.
Outlook
With the long-haul pilots' agreement expected to be formalised in the coming days, Qantas has removed a significant near-term operational uncertainty. The airline and markets will, however, monitor the ground workers' vote and any further labour developments closely.