5 C
New York

Qantas CEO blames ‘little’ government help and Covid for lagging peers


Qantas CEO Alan Joyce told CNBC the airline was not in a position to return to profit as quickly as other carriers like those in Singapore since it didn’t receive as much government support and faced a “massive wave of Covid … no one was planning for.”

Australia’s national carrier has posted its third consecutive 12 months of statutory losses before tax of $1.19 billion Australian dollars ($830.67 million), attributing the performance to the delta and omicron outbreaks in Australia and upfront costs from restarting the airline after lockdowns ended.

Qantas made losses of A$2.35 billion in 2021 and and A$2.7 billion in 2020.

Asked about how Qantas in comparison with Singapore Airlines, which returned to a net profit in the primary quarter of the financial 12 months 2022/2023, the CEO answered: “We’re very different from different airlines because inside Singapore, there wasn’t a have to sack, stand down those who we needed to do.”

“Because we ended up getting little or no government support, the federal government rented among the aircraft and gave our those who were stood their money but with people being stood out or not having employment from the airlines, loads of people left the industry,” he told CNBC’s “Squawk Box Asia.”

“Secondly, we have had this massive wave of Covid here in Australia that no one was planning for.”

Under pressure

The loss announcements come as Qantas employees begin strike motion on Thursday to protest inaction over pay negotiations.

On Monday, Qantas began sending out emails to its frequent flyers apologizing for not meeting the standards that they had expected from the corporate while offering every customer a A$50 discount on a return flight.

Australia’s Transport Employees’ Union have asked Qantas’ CEO to resign over for “empty guarantees to frustrated passengers” and “announcing more tactics to silence employees and suppress wages.”

Phil Noble | Reuters

Joyce also told CNBC that schedules that were in place six months upfront through the pandemic were upended and said staff absences from Covid infections also unraveled its recovery plans.

Employee absences triggered operational problems — particularly, within the running of domestic flights, which is “more complicated” and different than international routes, Joyce added.

“It’s quite a bit more complicated, with some aircraft doing eight sectors a day, if you get an issue within the morning with any person not turning up that impacts all eight sectors through the day,” he said, noting the differences between markets.

“The markets which can be just like us, like Europe like North America, you see similar issues occurring because people didn’t expect this this big wave of Covid.”

In North America, nonetheless, American Airlines returned to profit in its second quarter, as did Singapore Airlines, which the CEO compared Qantas with.

Singapore Airlines doesn’t have a domestic market. All its revenue is derived from international flights that were shut down through the pandemic.

By July 2020, it had lost nearly all its passenger carriage and grounded a lot of its aircrafts and staff, an organization statement said at the moment.

It posted a lack of $4.3 billion Singapore dollars ($3.09 billion) for the 2020/2021 financial 12 months.

SIA cut its losses in 2021/2022 to S$1 billion and has since posted a primary quarter net profit for the 2022/2023 12 months.

It has raised S$22.4 billion since April 2020, including S$15 billion from shareholders through the sales of shares and convertible bonds. Singapore sovereign wealth fund Temasek is almost all shareholder and holds 55% of the airline.

Qantas received about A$2 billion in government support, including A$850 million in wage subsidies for many who lost their jobs.

The Australian airliner has been under pressure over poor performance including canceled flights and lost luggage. Unions have called for Joyce’s resignation.

Qantas still has a halo as top-of-the-line employers in Australia. People need to get into aviation.

Australia’s Transport Employees’ Union asked Joyce to resign over for “empty guarantees to frustrated passengers” and announcing “tactics to silence employees and suppress wages.”

But things are improving, Joyce told CNBC, adding that just about 25,000 applicants applied for the recently advertised 2,500 recent jobs on the carrier.

“So, Qantas still has a halo as top-of-the-line employers in Australia. People need to get into aviation,” he said.

Because the start of the pandemic, the corporate has shed nearly 9,000 jobs from its workforce of nearly 30,000, the corporate said in an email response. It has since replaced only a couple of third of those employees and contractors it let go.

Nevertheless, Qantas is not the only airline within the region that has posted losses on Thursday.

Competitor Air Latest Zealand posted a loss of $725 million Latest Zealand dollars ($452.1 million) within the 2022 financial 12 months, before significant items and taxation.

In June, the International Air Transport Association forecast that the North American airline industry can be back within the black by the top of 2022, while the remainder of the world would proceed to face losses.

Get the latest Sports Updates (Soccer, NBA, NFL, Hockey, Racing, etc.) and Breaking News From the United States, United Kingdom, and all around the world.

Related articles


Recent articles