Airfares set to soar after Qantas flight crew win landmark pay deal for revolutionary new planes

Qantas airfares could rise further after flight attendants were given a 30 percent pay rise to work on new, ultra-long routes.

The huge pay increase applies to crew members working on the 20-plus hour Project Sunrise flights with specially configured A350-1000s, which are expected to be delivered in 2026.

The flights will depart direct from Melbourne and Sydney to London and New York, with crews on duty for up to 26 hours.

While the flights will cut the current one-stop travel time on these routes by four hours, the agreement could lead to higher fares.

Qantas has also agreed to “equal work, equal pay” for flight attendants working through agencies, after the Flight Attendants Association of Australia (FAAA) took the airline to the Fair Work Commission over the issue.

These changes are expected to cost Qantas around $60 million in the 2025 financial year, which CEO Vanessa Hudson said could lead to higher fares.

“Cost increases and no productivity compensation undermine our competitive position, so we are also saying that even though we are happy with the outcome, we have to find ways to compensate for that. In the short term, the pressure on rates will remain,” she told the Australian.

Ms Hudson also claimed that Qantas’s labour costs will now be three times higher than its direct competitors.

The historic deal could spell bad news for passengers flying with Qantas (pictured)

“There are 55 airlines we compete with internationally and our cost base for cabin crew will now be three times that of our competitors,” Ms Hudson said.

“That does indeed put us at a competitive disadvantage in that market. We will have to find ways to compensate and limit that.”

Teri O’Toole, federal secretary of the FAAA, welcomed the new salary offer, saying the negotiations were “a far cry from the Qantas of a few years ago”.

“The agreement strikes the right balance between a much-needed pay increase for cabin crew, securing future employment for Australian staff and providing business certainty in a competitive international marketplace,” she said.

‘For the first time in years, cabin crew will not have to give up hard-won benefits to get a pay rise. Qantas’ profits will flow back to cabin crew in the form of higher wages and improved working conditions.’

This comes as Qantas’ profits have suffered a sharp decline of 28 percent.

The national carrier on Thursday reported a statutory profit of $1.25 billion for 2023-24, down significantly from the previous fiscal year.

The huge pay increase applies to crew members working on the 20-plus hour Project Sunrise flights in specially configured A350-1000s (pictured)

Ms Hudson used her first presentation of the results to distance herself from her predecessor Alan Joyce, who angered many customers by, for example, selling tickets for already cancelled flights.

“Restoring confidence and pride in Qantas as our national airline is our priority. And while there is still much work to be done, we will achieve this by delivering consistent service to our customers and people well into the future,” she said.

The airline blamed the profit decline on lower fares, higher spending on customer loyalty programs, increased competition on international flights and lower cargo revenues.

Ms Hudson, who succeeded her predecessor in September last year, was CEO when the airline struck a deal 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 cut Mr Joyce’s pay by $9.26 million, primarily by scrapping long-term incentives.

Before he was stripped of these long-term incentives, he had total compensation of $11.919 million in 2022-23, including a base salary of $2.145 million.

The Qantas Group, which also includes budget airline Jetstar, returned to pre-coronavirus international capacity in May 2024 after bringing back more aircraft, including two Airbus A380s.

Qantas CEO Vanessa Hudson (pictured) said the new wage deal could lead to higher airfares

But additional flights by competitors led to an 11 percent drop in revenue for the international flight division.

Qantas said in an announcement to the Australian Securities Exchange that it expects international revenues to decline by 7 to 10 percent in the first half of 2024-25, as domestic revenues fall by 2 to 4 percent.

The airline’s underlying pre-tax profit – which investors say better reflects profitability – fell 15.7 percent to $2.078 billion.

However, revenue rose 10.7 percent to $21.939 billion.