Financial analysts have declared Qantas the victor over its unions. But there were plenty more Qantas shares bought yesterday than airline tickets.

The sharemarket simply followed the piece of financial string. First, it accounted for the AU$68 million cost of the industrial action as of last week then added another AU$30 million to AU$40 million to the downside as the result of grounding the airline for a day.

Add it up and shareholders absorbed the pain -- of maybe a AU$120 million loss -- as a necessary investment in the airline's longer-term future. Even having accounted for this there is an expectation that normalised earnings will rise by more than 10 percent this year.

They took the view that an outcome to the industrial dispute arbitrated by Fair Work Australia might mean some increase in pay for staff, but the pilots and maintenance engineers would not get the all-important job security they were seeking.

Qantas was never going to agree to their demands because in the longer term it needs to restructure its workforce in a way that would ratchet down the pay levels of these professions.

It was a fundamental plank in the airline's grand plan to become more competitive with its offshore rivals and emerging local nemesis, Virgin.

The second part of the Qantas plan is to establish a full service but lower-cost airline to operate in the pan-Asian market.

The thin end of the wedge for the Qantas pilots was having lesser-paid colleagues from Jetstar and New Zealand flying under a QF flight banner.

On the face of it the analysts are right. Qantas's board has undertaken a heavy-handed high-risk strategy, which seems to have gone to plan.

The timing has been criticised by the industry and questioned by the market (and passengers) but Qantas has applied sufficient pressure to get the outcome sought by management.

The airline could have waited until the Commonwealth Heads of Government Meeting crowd had left the country and the spring carnival racegoers had cleared Melbourne, or at least until it had been able to give Julia Gillard a proper heads up.

But there are two issues, according to Qantas. The first is there are fewer people flying on the weekend than during the week - so perversely this was supposed to minimise the downside on the airline and the flying public.

The second reason to strike sooner rather than later was that the business market was turning away in droves and bookings were evaporating.

The intervention of Fair Work Australia is supposed to give the issue some certainty. Investors should now have a level of confidence that there is an end in sight to the industrial disputes. This has a tangible value and one that the market and the financial experts understand.

However, what no one can quantify is the effect this ugly industrial relations episode will have on the staff and the loyalty of business passengers.

The wider public is not of particular concern to Qantas - mainly because over time people will come back when the disputes recede.

They have done so before, even after fears that safety standards were compromised. But this time there is a far greater threat to Qantas - competition for the business traveller.

The rebirth of Virgin as a full-service airline is already in full swing. Its product is not yet fully rolled out but there is enough to display so that the business market will get a taste of what is on offer.

Thousands of Qantas frequent flyers have already taken the opportunity to match their status (platinum, gold, etc) with Virgin and thanks to the industrial action many will now have the need to give it a try.

Virgin chief John Borghetti played it well over the past couple of days - no fare gouging, a flood of capacity and plenty of goodwill.

The emergence of Virgin as a true competitor is one factor that analysts will find more difficult to quantify.

Virgin Australia lost almost AU$68 million in the 2011 financial year, thanks in large part to foreign exchange hits. But even before the events of the past couple of months analysts were expecting a major turnaround to a 2012 profit of AU$70 million. Last year Virgin's share of the high-yield corporate and government market improved from 10 perent to 13 percent.

Borghetti's stated objective is to move to 20 percent, which given the circumstances appears conservative.

It is a fair bet that analysts will go back to their models over the next few weeks and upgrade their Virgin profit expectations. At the least they will be looking for some guidance from Borghetti when he appears at a pre-arranged gathering tomorrow.

So it comes as no surprise that Virgin bucked the trend of the wider market and gained a few cents yesterday.

The other big sleeper for Qantas is the response from its own staff.

This disenfranchised group can corrode this service business, which will cost Qantas dearly over time in a way that is impossible to quantify.

For months now most investment bankers have had a buy on Qantas. But institutions, while supportive of management, were not prepared to buy into the stock until the industrial relations issues had been sorted out.

Instead, the shares had been left to languish - trading at an earnings multiple well below their international peers.

Share volumes yesterday suggest that some investors are willing to take a punt that the worst is over.

But the 4.2 percent rebound in the Qantas share price is still not large enough to suggest that shareholders are confident there is smooth flying ahead.