Qantas hopeful on deal with unions, shares rally

Tue Nov 15, 2011 9:51pm EST
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By Narayanan Somasundaram

SYDNEY (Reuters) - Australia's Qantas Airways (QAN.AX: Quote) is hopeful of reaching an agreement with three key unions by a November 21 deadline, its chief executive said on Wednesday, after it grounded its fleet last month in a desperate bid to end industrial disputes.

The optimistic comments, just days before the deadline imposed after the government intervened in the dispute, sent Qantas shares up as much as 7.6 percent to their highest in more than three months.

"Qantas hopes for a positive resolution and lack of any negative comments from parties is adding to the certainty and boosting the shares," said Michael McCarthy, chief market strategist at CMC Markets.

The airline's shares were up 4.2 percent at A$1.72 by 0245 GMT, compared with a broader market .AXJO down 0.5 percent.

Qantas has held talks over the past two weeks with the three unions representing its pilots, aircraft engineers and baggage handlers, which are all wary about the airline's moves to cut costs and set up new Asia-based airlines.

"We continue to be hopeful we can reach an agreement," Joyce told reporters, speaking at an event to mark the airline's 91st anniversary against the backdrop of Boeing's (BA.N: Quote) 787 Dreamliner.

Qantas, along with its low cost unit JetStar, has ordered 50 Dreamliners with the first aircraft set to be delivered by mid next year.

The federal government intervened as a result of the grounding, and workplace umpire Fair Work Australia ordered an end to the industrial action.   Continued...