[MarcusGB]

Am down here in Australia, which this week has featured many aspects about Qantas on the news.
I thought i would take the opportunity to try to outline the issues which are more accessible domestically for the International Forum.

Qantas announced AU$ 2.47bn profits in last 12 months, from a loss yr previous of AU$1.8bn

Alan Joyce CEO, was before a Senate Committee, which was live broadcast in full, on TV and radio!

Observing his behaviour,, he simply avoided many questions, was robust in his belief of himself, Executive team.
(He is due to step down in November 2023, after 15 years as CEO.) He did appear quite arrogant, and dismissive of the Senators.
Use of avoidance, answers were short, of limited information, only to be investigated by the Press through the week, reveal the full extent of issues, which has brought a daily bad press for Qantas..
Facts had to be dragged out of him, some were simply not disclosed, or only partially. He refused to answer some.
Many questions were “Put on notice” to be submitted in writing and submitted.
He did not give a good, open, positive or likeable impression as “The face of Qantas”, which has had multiple hits in the last days. It is stated that he has taken he is paid over AUD $5M+ annually.

Many Issues were put to him, of the high rate of cancellations, withholding of over AUD $350 M in credits, which expire in Dec 23.
He would not reveal the total amounts, but following – then including Jetstar and overseas Customers, investigations have reported this is in excess of AUD $450M+. Today 30th August, Qantas have stated these credits would be extended in time.

He was asked as to his role in the stopping of Qatar increases of 21 flights per week (in and out) of Australia, which were refused by The Government. Protectionism was alleged by the Senators, and Qantas not being a state Airline but one of a Private Company. However, it was highlighted the Partnership with Emirates was a factor.
They put to him that this would keep prices high, but he replied many Airlines have already increased schedules ahead, including Singapore Airlines, Cathay Pacific, various Chinese Airlines.
The Senators believed Fares were around 70% higher then pre-pandemic.
This was levelled against the Country’s Cost of Living Crisis, affecting inflation, and australia’s Unique need for access to flights, due to vast distances, the absence of rail services, and time factors in domestic travels.

Qantas was also stated as being the Most complained about Company in Australia, supported by the ACCC.

Legal action has been started 30th August, in the Federal Court against the Airline for cancelled flights by the ACCC (Australian Competition & Consumer Commission), for the Alleged selling of 8000 flights.that had already been cancelled, but not removed from sale.

A Class Legal action had already been launched by customers to obtain credits, or refunds prior to this, for cancelled flights.
On ABC and on state radio programs, i have heard many people phoning in, stating they cannot get through to call centres, not getting refunds, cannot see their credits, the prices now do not match what was originally booked, flights being fully booked, cancellations…

Generally, Headlines state that “The Goodwill of Australians”, has been hit hard this week, the Qantas reputation never as low as this. It may well be in profit, but is at a huge Loss of Reputation by Australians.

We must always remember the vast distances, or terrain difficulties Australia has to when it comes to travel.
Between Cities, within their Regional State, or interState, with no National Rail services, and limited driving ability. So everyone has to take flights regardless of the cost at some time.
Domestic flights have for many years in my experience, been far more costly, compared to International flights.
This is why many Australians prefer to Holiday outside Australia, Thailand or Bali etc., than to do so domestically.
Flying for Business, or leisure you have no choice but to fly, and sometimes no choice but Qantas that serve many regional or remote areas, with Dash-8 aircraft.

Virgin Australia is slowly building back flights, but only 737’s / Embraers on intercity or tourist routes, not country or remote places, where Qantas has always been the only option.
Rex is really plying v limited routes with few aircraft.

I hope this gives an insight from within Australia for BT, and Forum members.

4 users thanked author for this post.

Jacob, JonathanCohen09, christ, AndrewinHK

[cwoodward]

“Rex is really plying v limited routes with few aircraft.”

Not exactly!

Rex is a large (Singapore ownership) airline by AU standards and that has operated for over 50 years but has expanded rapidly over the past few years and is now the best performing airline on mainline AU routes as well as in the far flung rural routes on which it is often the only provider.

Its large fleet comprises 65 aircraft plus those of its subsidiaries and it operates the largest route network in AU – nor exactly small.

Last year it doubled both its turnover and profit. One to watch I believe

Apologies for picking up on this Marcus. I enjoyed and otherwise agreed with your post and it just happens that I know AU well and have had a business there for forty years.

Rex’s origins are as a regional carrier owned locally out of Orange NSW that was purchased some years back and considerable funding injected. The CEO is still I believe an ex-government transport minister.
The airline is much loved by its users but hated by both Virgin and Qantas as its is fast stealing their breakfast.

2 users thanked author for this post.

fatbear, MarcusGB

[MarcusGB]

cwoodward

Thanks for the information on Rex. It was very interesting to see another alternative, as they are not much publicised here, and certainly not outside of Australia. I noted on their site, they have information for “Carrying of a Coffin”, and also of “persons in Lawful Custody”, another feature of Australian life, and the cross State operations that we do not come across in the UK.

I wonder what impressions you have of Qantas following these events this week?

I see a “news item” has been added to this site focussing on Qantas, though some days after events have taken place.

Clearly since Joyce’s appearance live, The Group has been forced to make some changes by public opinion, and the Customer/Class + ACCC Legal action.
Interesting to see where these go now, though the Head of the ACCC did identify on TV, “Qantas were the worst Company in Australia to be complained about,
they needed to act.”
They have launched their case for the “selling of flights that were already cancelled, but for sale.”

Reporting of the media has described the “Bad week for Qantas, though Self inflicted!”

[cwoodward]

They also have a bill in the post for A$14.6 billion for the aircraft ordered to replace the inadequate worn and outdated fleet over which Joyce presided until someone else needed to pay.

Perhaps no record profits for a while ah ?

[CathayLoyalist2]

This is a story we have seen time and time again of increased profits but very poor customer feedback and a large drop in a brands reputation. Yet who is held truly accountable and by whom?. It is obvious regulators, seemimgly worldwide, ring their hands and gnash their teeth whilst the circus carries on. How a CEO , any CEO , can behave like that in front of elected parliamentarions and procrastinate beggars belief

[Rferguson2]

It is interesting looking at the parallels of say BA and QANTAS. Customers and the media in the home countries of both seem to have a love/hate relationship with ‘their’ national carrier. They always pull at the heart strings of the public and the media loves a good ‘national’ airline story. But in reality, these are corporate for-profit making enterprises.

I also find it ironic how the Australian Government calls out QANTAS on cancellations etc. Well, instead of complaining how about enacting some laws to protect consumers similar to EU261?

The BA/QF likeness continues with outdated clunky IT and the outsourcing of nearly everything that can possibly be outsourced. This tends to work when the wheels are turning nicely on the average day but can be disaster when things go wrong.

Both hold a dominant position in their home markets although that dominant position for QANTAS is mainly domestically (which is also their biggest profit maker). I am not sure of up to date numbers but I recall reading about six months ago that SQ was operating more international flights into/out of Australia than QF was.

In terms of the cash held on in COVID credits, I don’t really see how QF is different to any other airline that did the same. Nearly all put an expiry date on them and I now read that QF has gotten rid of the expiry date altogether.

I think where the parallels between QF and BA divulge is the competition on the international market. BA’s largest international market is North America with airlines that are not a hell of a lot better. QF’s biggest international market is Asia and the UK so we are talking main competitors like EK, QR, SQ, CX etc etc. I won’t go down the road of ‘state subsidised carriers’ but they certainly don’t face the same cost barriers the likes of BA/QF do.

For me what will be most interesting to see if is Project Sunrise ever happens. Word on the street is while there is conflict in Ukraine and parts of the middle east that QF will not fly through, these flights are a no go.

4 users thanked author for this post.

LetsFlyNow, DerekVH, theflyingnurse, cwoodward

[MarkivJ]

“ Qantas was also stated as being the Most complained about Company in Australia, supported by the ACCC.” – I didn’t know this. Wow, that’s bad!

[MarcusGB]

Today Tues 4th Sept, the Main Media channels here in Australia, including ABC news, channels 7,9,10, have all highlighted the worst reputation that Qantas has had for many years by The Public. Qantas have released a Statement acknowledging this, and say it will clearly take some time to repair.

There is pressure from the Opposition and many angles, to have a “Senate Enquiry”, into This matter, or the Free skies / Regulation that is currently in place. However, clearly Singapore Airlines are increasing capacity with extra flights, several Chinese Airlines, Cathay Pacific…as well as with larger Aircraft.
It was argued that Qatar could increase the Capacity by Aircraft type, or fly to Secondary Airports, eg Cairns, Darwin, Canberra etc.

I watched question time in Parliament live today, where the PM faced several questions about his relationship with the CEO Joyce. He stated that Australia had relationships with “Countries, not Airlines, and THE Most Open Skies arrangement of any Country Worldwide”.
Their are clearly further issues to come out, and this is not going to go away for some time.

This eve, pressure is being added by large Corporate Shareholders, for The Board NOT to pay the Bonuses due to the Executive of the Airline, especially to Alan Joyce, when the two Legal cases including the ACCC, which may result alone in Qantas being fined as much as AUD $600M.
They are stated, as to blame for the events in this very damaging week for the Qantas / Jetstar Brand.

Certainly fares remain very high here for domestic flights, and cancellations are common events every day, as friends and colleagues commonly experience.
For over 20 years of working and travelling from Europe to Australia, the Australians have paid at least Double the fares, towards Europe, by starting in Australia, where i could purchase the same fare in any class, for half if not less of the prices. This would be on the Same Airline!
However, the current Post Covid rates, of around £5,500+ for a Business return, Ex Uk is nearer the AUD $9-11,000, return the Australians are faced with.
European Airlines from their Hubs, are offering flights from £3-4,000 for a Business return, but flights to the main Asian gateways are very expensive just now, remaining high.

With increased capacity within weeks for the new timetables, and “Cost of Living” being issues i have heard in so many countries Worldwide, i wonder how long the Airlines can keep prices so high, when the initial desire to travel again has been fulfilled, and sustain continuing Custom, Especially Flying Eastwards from Europe, to The Far East and Oceania?!

Further, that during Covid, the Government funded employees of Qantas, to the amount of AUD $900M During Covid, that there is no provision to repay.

1 user thanked author for this post.

LetsFlyNow

[cwoodward]

In 2020 Qantas sacked 6000 staff including 220 pilots. It was badly handled according to media reports.
They of course were not alone in this but the compensation was deemed to be inadequate and if I recall correctly the pilots issues are still before the courts.
Qantas have major issues with their pilot group and many have left to work overseas in USA and Asia.

The so called “Open Skies Arrangement” amounts to nothing more than a bad joke at best.
Australian skies are effectively closed to no Australian airlines and have been such for years.
Yes there was a much lorded ‘open skies bill” passed by the Australian parliament -it lasted a matter of months and only until Cathay and Singapore Airlines were mulling opening bases there. Qantas objected and the weak government rolled over and closed the skies to non Australian airlines. AU skies are over regulated and for foreign players very closed indeed.

New Zealand meanwhile has a very liberal open skies policy yet 40% government owned Air New Zealand dominates the substantial local market with a market share of something like 90% having ‘seen off’ all other players other than Jetstar who fiddle around the market edges.

[MarcusGB]

So Joyce was reported across all Media as “Having retired 2 months early” his last day being today 5th Sept in his post.
The planned CEO will take over from Tomrw, not November, in time for the Shareholder meeting. It was not thought Joyce would be appropriate to attend this meeting.

There remains an issue with his apparent AUD$ 24-Million which he will take away as a result!
AUD $1 Billion has been wiped off shares in the last few weeks alone, so there are calls for The Board to stop this.
Add the fines that could be levied By The Federal Court for the selling of “Already cancelled, but not removed from the Schedules” tickets sold to customers, which The Airline has apologised for but not denied.
Then the class action to obtain Credits and Refunds of over AUD $400M+, this could wipe out much of its current profit.
I am not sure if “orders for new Aircraft ” could or will be fulfilled in the future.

There is a huge amount of work to repair and turn all this around. The first female to be CEO in the Airline’s History, will be in post Tmrw morning!
Uncertainty in how this will change and what new decisions will be made, in all aspects of the Airlines Strategy, a steep rocky road ahead for the coming months until this is decided.
This will need to be made clear for staff and Shareholders within, and externally for the Customers and Public perception, of The Airlines & Group as a whole!

The Reputation of Qantas has been severely affected in just the last few weeks, major systemic Legal challenges from Customers and Regulatory bodies will be ongoing.
The Cost of Living is biting here in Australia, and the Air Fares remain Painfully high, for a country where Air Travel certainly Domestically, is an essential means of Transport!

[cwoodward]

Now is probably an appropriate time for Virgin Australia to ramp up its now almost non existent international routings to the level of the previous regime.
Their daily HK flight was always full and it would not be difficult to offer something better than the warn 19 year old A330’s that Qantas runs on the route. They of course now lack the mid-haul equipment having got rid of their A330s that were used on there previous international routes.

The parallels with BA in the neglect and demise of formally highly profitable popular routes (as others have mentioned) is uncanny as is the similarity of their former CEOs who of course had very similar backgrounds and training.

[Rferguson2]

What always amazes me with these situations is the media portrayal of ‘good boy gone rogue’. Whether it be QF’s Joyce or BA’s Walsh.

But let’s be real here. Who gives these guys their positions? And on what credentials?

Make no mistake, the boards of both QF and BA appointed former CEO’s of LOCO’s to their positions for one reason only – to slash costs. You simply cannot do that without standards and reputations declining.

The boards of both these company’s have stood idly by, nodding and agreeing with every action these guys have taken.

3 users thanked author for this post.

Jacob, LetsFlyNow, cwoodward

[MarcusGB]

It has just been announced, that their will be a Senate Enquiry, over the Qatar Airlines being prevented from expansion, the role of The Government and Joyce, as well as Virgin Australia.

It appears that many Senators, and other Members of Political parties, have already been given “Chairman’s Lounge” Memberships, with “Exclusive and Personalised Lounge Retreats at Major Australian Airports! ” They would have to declare this of course… If they can find anyone in Politics who does not have it!

1 user thanked author for this post.

LetsFlyNow

[Rferguson2]

Chairmans Level of membership has been at QF forever and ever and as you mention MarcusGB it includes many politicians. It is similar to BA’s ‘Premier’ tier and is invitation only with each member being signed off by the CEO. It generally includes a roster of influential people whether that be from the corporate, political or showbiz world.

The main difference to the BA tier is that Qantas has Chairmans Lounges separate to the Business/First/QANTAS Club lounges. These are primarily domestic lounges (including one at Canberra Airport of course – wink wink).

For what it is worth Virgin Australia has a similar invitation only tier called ‘Virgin Beyond’ and they also have separate VVIP lounges to accommodate these guests.

3 users thanked author for this post.

MarcusGB, DerekVH, LetsFlyNow

[MarcusGB]

Several Media sources, are describing that “Joyce chose to use the Emergency Exit, but given a Golden Parachute to leave with”!

[Author]

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