Qantas (ASX: QAN) is expecting underlying pre-tax profits of between A$140 million and $190 million for the six months to December 31, despite an impact of $650 million from increases in fuel costs and industrial action.
The airline estimates the industrial dispute with unions representing long-haul pilots, aircraft engineers and ground crews will cost it $194 million in the first half.
Last week Qantas announced it had been unable to reach new agreements for its employees and pilots with both the Transport Workers Union (TWU) and the Australian and International Pilots Association (AIPA), and conceded it was time to bring in a mediator, namely Fair Work Australia.
The airline has spent the past six months in negotiations with the TWU trying to reach a new deal on pay and conditions for 3,800 employees, and an even longer 15 months with AIPA for a new deal for its 1600 long-haul pilots.
The financial impact includes costs of $70 million from the three-day grounding of its domestic and international fleet late last month, $27 million from a loss of forward bookings and $29 million in customer recovery initiatives.
The airline estimates the cost of industrial action before the grounding was $68 million.
Fair Work Australia has ordered the TWU and the AIPA to stop all industrial action which means they cannot take any action during the arbitration period or for the term of the determination by the commission, which can be up to four years.