“Why Alan Joyce defends Qantas’ high fares and dismisses criticism of poor service”

Defiant Joyce is flying high but turbulence is rising

The Complaints about Qantas

Qantas, Australia’s national carrier, has received a considerable amount of complaints regarding fares, cancellations, and service. The Australian Competition and Consumer Commission (ACCC) has even labeled Qantas as the most complained about company in Australia for the second year in a row.

However, Qantas CEO Alan Joyce has been quick to defend the airline against these complaints. He argues that fares have peaked in December and are now decreasing as airline capacity increases to meet the growing demand. Joyce also points to Jetstar’s cheap deals as part of their efforts to make flying more accessible. In terms of cancellations, Joyce claims that Qantas is better than its competitors and that it is not responsible for problems caused by weather and air traffic control. He also acknowledges that technical issues and staff illnesses can sometimes lead to flight cancellations.

In terms of service, Joyce admits that the start-up post-COVID-19 was not as smooth as Qantas would have liked, but he maintains that the airline is improving and is ahead of other airlines in terms of customer satisfaction. He also notes that call centers have doubled in size, resulting in better average wait times. Additionally, Qantas is expecting the arrival of new planes from 2027, which will further enhance the passenger experience.

Repayment of Outstanding Flight Credits

Qantas has made efforts to refund outstanding flight credits, having already refunded over $1 billion in total cash or redeemed flights since 2020. The airline is also making it easier for passengers to refund or redeem the remaining $370 million of credits. However, with class action lawyers circling, the challenge of repaying these credits remains.

Flight Slots and Competition

There have been allegations that Qantas is blocking extra flights from Qatar and hoarding slots to cripple domestic competitors. In response, Joyce argues that Qatar’s inability to obtain additional flights is minimal compared to the influx of other international airlines with no restrictions. He also suggests that the real issue lies in monopolistic and highly profitable airports seeking to increase their own revenue. Furthermore, Qantas faces its own challenges internationally, as it is regularly denied slots in other countries where it would like to operate more flights. Joyce maintains that these difficulties are a result of how the global system operates.

Treatment of Qantas Employees

Joyce claims that Qantas has improved its culture, resulting in greater engagement and satisfaction among its employees. He highlights that more than 21,000 employees are set to receive $314 million worth of bonuses and shares. Additionally, the $1 billion in structural costs that have been cut are contributing to the airline’s exceptional balance sheet strength. However, it should be noted that Joyce did not mention the taxpayer support that Qantas received during the COVID-19 pandemic.

Qantas‘ Financial Performance and Future Outlook

Despite the challenges faced by Qantas during the pandemic, the airline has experienced a remarkable turnaround. Qantas achieved a record underlying group profit of $2.7 billion in the last financial year and announced another $500 million in shareholder buybacks. The demand for travel has remained insatiable, with Qantas‘ domestic revenue reaching $6.98 billion, double the previous year. The domestic profit margin also increased to 18.2 per cent, surpassing pre-pandemic levels.

While some experts, like stockbroker Angus Aitken, predict that the billions of dollars in future investments in modern aircraft will impact the profit margin, Vanessa Hudson, Qantas‘ former CFO and now Joyce’s successor, believes that the cost position will improve, and future earnings potential will continue to grow.

Community Perception and Potential Challenges Ahead

The profitability of Qantas has received mixed reactions in terms of community perception. Critics argue that the airline’s profitability may lend credence to union accusations of corporate profiteering at the expense of customers and employees. Additionally, Qantas‘ ban on The Australian Financial Review in its Chairman’s Lounge may further fuel these accusations.

Furthermore, Qantas‘ profitability could potentially complicate efforts to warn against new industrial relations laws or government reviews of competition policy. The departure of Alan Joyce and the arrival of Vanessa Hudson as the new CEO also raises questions about whether Hudson will have the same political influence as Joyce in protecting Qantas‘ interests.

It is worth noting that there have been controversies surrounding the government’s refusal to grant Qantas more flights, particularly from Qatar. The decision-making process behind this refusal has raised eyebrows within the industry, as it is suspected that the Department of Transport’s recommendation in favor of Qatar was overruled.

Conclusion

While Qantas CEO Alan Joyce remains defiant in the face of numerous complaints, the airline’s performance and profitability cannot be denied. Qantas has overcome the challenges posed by the COVID-19 pandemic and has achieved impressive financial results. However, the airline will need to navigate potential obstacles, such as refunding flight credits, maintaining competition in the industry, and addressing community perceptions of corporate profiteering. With a changing leadership and a future of increased investment in modern aircraft, Qantas will need to strategically position itself to continue its success in the highly competitive aviation industry.