The chances of Qantas firming up its order for the advanced Boeing 787-9 aircraft seems to have improved, with news today that Qantas has reached an in-principle agreement on wages with its long haul pilots.
At present, Qantas holds 50 options and purchase rights for the new aircraft, having made several adjustments to its order book over the last few years. Originally ordered as far back as 2004, adjustments to the order have included the cancellation of 35 orders in 2012, and later deferring the delivery of 5 aircraft from 2016 to 2017.
Qantas have been reported as building a business case to firm up the order this year, and had set a number of conditions that would need to be met in order to go forward with the order. These included reducing the debt of the company, returning the international arm to profit, and reaching an agreement with pilots.
The financial position of the company has improved in the last 12 months, with Qantas even flagging the possibility of returning to a position of paying dividends.
While the in-principle agreement is confidential, it is reported to include new terms and conditions for Qantas’ international pilots, and agreeing to Qantas’ policy of an 18 month wage freeze “followed by annual increments of 3 per cent.”
That the agreement has been struck with long haul pilots gives credence to the view that the aircraft was going to be used on international. It will also signal a return to growth for the international arm of the airline after a number of years of route reductions.
While there is no set timeline for any order, Qantas will need to make a decision on the options in the not too distant future. Given this agreement, there is the possibility of an order being announced at the announcement of the full year results in August. We’ll all have to wait an see.