The Qantas Airways Ltd (ASX: QAN) share price is under the spotlight after the airline received a large fine by the Federal Court.
Qantas $90 million Federal Court penalty
The airline said in an ASX announcement that it accepts the Federal Court’s decision on the penalty for “unlawfully outsourcing its ground handling function in 2020”.
Qantas said the judgement holds the airline accountable for its actions that caused real harm to its employees.
The $90 million penalty will be paid in accordance with the orders of the court. $50 million will be paid to (the applicant of the case) the Transport Workers’ Union of Australia.
Qantas said it has also paid $120 million into the compensation fund for all affected former employees, which is being administered by Maurice Blackburn.
Management commentary
The Qantas CEO Vanessa Hudson said:
The decision to outsource five years ago, particularly during such an uncertain time, caused genuine hardship for many of our former team and their families.
The impact was felt not only by those who lost their jobs, but by our entire workforce.
Over the past 18 months we’ve worked hard to change the way we operate as part of our efforts to rebuild trust with our people and our customers. This remains our highest priority as we work to earn back the trust we lost.
Is the Qantas share price a buy?
I wouldn’t necessarily buy or sell Qantas shares just because of this news, but it’s a hefty hit to the company’s profitability.
As a more general point, the Qantas share price has gone up 92% in the last year, so it’s certainly not as cheap as it was.
If demand for air travel remains strong, then Qantas shares could continue to perform well. But, it’s not at a price that I’d describe as a great buy.
In the medium-term, I think there could be a more attractive price than today, so I’d focus on ASX growth shares instead.
