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Qantas Pilots' Union Is Worried Over Takeover, May Try to Block Sale

Pilots are concerned that commercial pressures created by a takeover of Qantas Airways may conflict with their professional standards, a pilots' union spokesman said Monday.

Qantas's board of directors last week unanimously agreed to accept a A$11.1 billion (US$8.6 billion) takeover offer from a private equity consortium led by Australia's Macquarie Bank and U.S. aviation investor Texas Pacific Group.

The A$5.60 per share bid represents a 33% increase above Qantas' share price before takeover speculation began in early November.

The Australian and International Pilots Association general manager Peter Sommerville said one option was to seek to block the sale. But he conceded the 2,500 Qantas pilots could only raise funds to buy 1% of Qantas' shares and would need an additional 9% to halt the sale. This would be an investment of A$110 million in total, or about A$50,000 per pilot.

Under the terms of the deal, the bidding consortium would need to buy just over 90% of the stock to force the compulsory acquisition of the remaining 10%.

Sommerville said the association would discuss its concerns in a meeting with the federal government this week. There remained uncertainty about what the deal involved, how the new owners would deal with employees, and whether commercial pressures might conflict with professional standards, he said.

"Pilots are particularly concerned about that (professional standards)," he told Australian Broadcasting Corp. radio. "We have been trying to talk to the consortium for a little bit of time now without success," he said.

"We are talking about whenever there are commercial pressures between operating safely and making a buck, there is always a tension there and there should be a tension there," he added.