Qantas airfares could soar further after flight attendants secured a 30 per cent pay rise to work on new ultra-long-haul routes.
The massive pay rise is for crew working on Project Sunrise flights of more than 20 hours on specially configured A350-1000s scheduled for delivery in 2026.
The non-stop flights will depart from Melbourne and Sydney to London and New York, and will involve crew on duty for up to 26 hours.
While the flights will shave up to four hours off current one-stop travel times on those routes, the union deal could come at the expense of higher fares.
Qantas has also agreed to “same work, same pay” for flight attendants employed through labour hire companies, after the Flight Attendants Association of Australia (FAAA) took the airline to the Fair Work Commission over the issue.
The changes are expected to cost Qantas around $60 million in the 2025 financial year, which chief executive Vanessa Hudson warned could lead to higher fares.
“Rising costs and the lack of compensation for productivity are eroding our competitive position, so we also say that, although we are satisfied with the result, we will have to find ways to compensate for it. In the short term, the pressure on rates continues,” he told AFP. Australian.
Ms Hudson also claimed that Qantas’ wage bill will now be three times higher than that of its direct competitors.
Qantas airfares are set to soar after flight attendants (one pictured) secured a 30 per cent pay rise to work on new ultra-long-haul routes.
The landmark deal could spell bad news for passengers flying with Qantas (pictured)
“There are 55 airlines that we compete with internationally and our cabin crew cost base will now be three times that of our competitors,” Ms Hudson said,
“That really creates a disadvantage for us in competing in that market and we’re going to have to find ways to offset and mitigate that.”
FAAA Secretary Teri O’Toole welcomed the new pay offer, saying the negotiations were “a far cry from those at Qantas just a couple of years ago.”
“The agreement strikes the right balance between offering cabin crew a much-needed pay rise, securing future work for Australian crew and providing business certainty in the competitive international marketplace,” he said.
‘For the first time in many years, cabin crew will not be forced to sacrifice hard-earned conditions to gain a pay rise, and Qantas’ gains will be passed on to cabin crew in the form of increased pay and improved working conditions.’
This comes after Qantas’ profits suffered a sharp 28 per cent drop.
The national carrier on Thursday reported a statutory profit of $1.25 billion for 2023-24, down sharply from the previous financial year.
The massive pay rise is for crew to work on the 20-plus hour Project Sunrise flights on the specially configured A350-1000s (pictured)
Ms Hudson used her first earnings call to distance herself from her predecessor Alan Joyce, who angered many customers with actions such as selling tickets for flights that had already been cancelled.
“Restoring trust and pride in Qantas as a national airline is our priority, and while there is more work to be done, we will achieve this by consistently delivering for our customers and our people going forward,” he said.
The airline attributed the profit decline to lower fares, higher spending on customer loyalty programs, increased competition on international flights and lower revenue from cargo transportation.
Ms Hudson, who replaced her predecessor in September last year, was chief executive when the airline settled with the Australian Competition and Consumer Commission in May to pay $100 million in fines for selling tickets for cancelled flights to 87,000 customers.
Earlier this month, Qantas announced it would reduce Joyce’s pay by $9.26 million, primarily through the cancellation of long-term incentives.
Before those long-term incentives were removed, he had total compensation of $11.919 million in 2022-23, including a base salary of $2.145 million.
Qantas Group, which also includes budget airline Jetstar, is set to return to pre-Covid international capacity in May 2024, following the return of more aircraft, including two Airbus A380s.
Qantas chief executive Vanessa Hudson (pictured) said the new pay deal could lead to higher airfares.
But the additional flights by rivals caused an 11 percent drop in revenue at its international flights division.
In its announcement to the Australian Securities Exchange, Qantas said it expected international unit revenue to fall by 7-10 per cent in the first half of 2024-25 as revenue from domestic flight operations fell by 2-4 per cent.
The airline’s underlying pre-tax profit – which investors believe better reflects profitability – fell 15.7 percent to $2.078 billion.
However, revenue rose 10.7 percent to $21.939 billion.