Just three years after grounding all of its aircraft, Qantas’ revenue has never been higher. But as Australia’s national airline recovers from the pandemic, it is being alienated from its most important constituency: the Australian public.
They lament that airmail is unreliable and expensive. They are appalled that government protectionism has made Qantas Australia’s largest airline and driven up travel prices. They are appalled by allegations that the company sold tickets for flights it never intended to fly. They cannot fix how Qantas unfairly sacked hundreds of employees and then handed huge salaries to its chief executive and president. board of directors.
Now, as accusations of bloodshed intensify, labor unions and lawmakers are calling for the company’s board to resign en masse.
Geoffrey Thomas, founder of Perth-based AirlineRatings.com, said the anger was personal for Australians and that Australians were angry at airlines that billed themselves as the “spirit of Australia”. He said he felt a deep sense of ownership. “We’re really proud of it, so we expected something better.”
Qantas is rooted in Australia’s aviation history and has long had a reputation for safety and comfort. In this sparsely populated country, roughly the size of the United States, air travel is essential to daily life, and some cities are hundreds of miles from the next major center. Qantas operates three of his five domestic commercial flights, and signing up for a Qantas mileage account is a rite of passage for many.
The recent scandal stings, seen as a betrayal by many Australians.
The airline’s new chief executive, Vanessa Hudson, tried to reassure her compatriots by posting: video message Apologized online on Friday. “We know we have let you down in many ways and we are sorry,” he said, adding: “We want to get back to being a national airline that Australians can be proud of.”
Qantas may be rushing to apologize, but its balance is extremely healthy. Last month, the company posted a record annual profit of A$2.47 billion (about $1.6 billion), as well as multi-million dollar bonuses to former chief executive Alan Joyce and other executives, and five It also implemented a share buyback program worth AUD 100 million. .
Angus Aitken, a Sydney-based stockbroker and founder of Aitken Mount Capital Partners, said such blockbuster hits came at a price, with some clients seeking short-term profits above all else. He pointed out that this was damaging to the brand in the eyes of the public. “Profitability is important, but you also have to take care of your customers.”
Investors noted that Qantas’ share price has fallen 20% since July.
Mr. Joyce, credited with turning the company around after the global financial crisis, stepped down as CEO in early September, two months before he was scheduled to step down, in an attempt to calm the dust. But since then, Qantas has been unable to move forward, teetering from one challenge to the next, with new difficulties revealed almost daily in the Australian news media.
Despite the reputational hit, Qantas is well placed for recovery as the country’s largest airline, with new Airbus connecting Australians to the rest of the world in record time, aviation experts say. There are plans to introduce ultra-long-haul direct flights. The A350 will arrive in the second half of 2025. For the first time, passengers will be able to fly non-stop between Australia’s east coast and Paris, New York and London.
“This will be the ultimate flying machine, and passengers will flock to it,” Thomas said of the new plane. He said in a year’s time Australians would be having a “completely different conversation about what a great airline Qantas is”.
There are many hurdles along the way. One of the first big tests will come next week when the new chief executive, Mr. Hudson, begins court-ordered mediation with the union. This comes after Qantas was found to have illegally outsourced the jobs of around 1,700 baggage handlers in a bid to thwart trade union activity during the pandemic. The company, which has apologized, is now facing a claim of up to A$200 million in damages and calls for the board to resign.
“We have to ask ourselves where the boundaries are,” cabinet minister Bill Shorten said after the court’s ruling. “If this is not so, what is the test? Is there nothing that would make them resign?”
Australians feel they owe Qantas, but the airline is far from publicly owned. Founded in 1920, Nationalized in 1947, the airline was slowly privatized in the 1990s and only 51 per cent of its shares must be held by Australians, with the remainder likely to be held by offshore investors. Still, the Sydney-based airline is vital to Australian daily life. Operates 61% of domestic flights.
After Australia closed its borders in 2020, Qantas limped along with its planes parked, supported by about A$900 million in government aid. Returning to the skies was a painful process. Passengers cited high fares and poor service as the reason. Chronic baggage loss Refunds for canceled tickets and redemption of vouchers and air miles are also difficult.
Qantas advertised and sold tickets for more than 8,000 flights in 2022 that it knew would never take off, a move aimed at increasing competition, regulators said. The national consumer watchdog said it was seeking a record fine of at least A$250 million to set an example for other companies.
At the same time, authorities strengthened Qantas’ dominant position. This year, the federal government blocked qatar airways It decided against adding flights to Australia because it would hurt Australian businesses, even though it would most likely result in cheaper flights for Australian customers. (Qantas had previously lobbied to exclude Qatar from its hubs in Australia’s eastern states.)
This interference is not new. Kyle Kimball, a commercial litigator based on Australia’s Sunshine Coast, said governments led by both major political parties are “openly supporting companies that clearly dominate the market and are anti-competitive.” Ta.
Qantas’ relationship with government officials has also been criticized for being too cozy. Prime Minister Anthony Albanese’s 23-year-old son recently sparked outrage in the domestic news media after he was given access to the Qantas Members’ Lounge, usually reserved for celebrities, business executives and top politicians. a voice rose.
Mr Aitken, a stockbroker, said of the government and Qantas: “To me, they’re just a very mixed bag.” “You can smell it, I can smell it too.”
Qantas must overcome these challenges if it is to regain its status as a beloved brand.
“It takes a lifetime to build a reputation, but it takes five minutes to ruin it,” Kimball said. “They’re going to have to work very hard to rebuild that brand.”