Alan Joyce pleads guilty, guilty, guilty, but it’s not his fault

Qantas, like other airlines, proved woefully unprepared to match the enthusiasm of people who wanted to get back into the skies as soon as border closures and lockdowns ended.

So much for all that grim talk that air travel is permanently out of fashion for communities concerned about everything from carbon emissions to future pandemics. Zoom alternatives and other online connections turn out to be no substitute for people’s preference for the real thing.

As CEO and public figure, he says, criticism, including from unions, is not unusual and part of the job of him and his predecessors.

Pleasure air travel demand is already at 125% of pre-COVID-19 levels and business travel is back at 90%, according to Joyce.

Add in high staff absences due to COVID-19 isolation requirements, a massive labor shortage in the economy, and many people deciding to leave the industry and Qantas permanently. While it seemed to make sense at the time to park all those 380s in the Navajo desert to wait out the COVID recession, the maintenance required to get them operational again means more delays.

“Everyone thought international would take years to recover – people were predicting 2024, 25, 26,” says Joyce.

Instead, he marvels at how well and how quickly demand is recovering, and that he’s never seen anything like it.

Fare prices go up and down

The problem, as anyone trying to book an international flight can attest, is how difficult it becomes to get a ticket even as prices skyrocket higher and higher. Joyce points out that high fuel prices add an extra $1 billion to Qantas’ annual fuel bill.

But it is obvious that the reduction in availability, in part due to the deliberate reduction of flights, also translates into a convenient way for Qantas to increase ticket prices and the performance of each seat.

A return business class ticket to the US next month costs about $22,000, for example. A one-way economy flight to Singapore around Christmas costs close to $1,500. Domestically, passengers trying to change flights get hit even as Qantas reserves the right to cancel and delay them without penalty except for reputation.

An economy passenger flying from Sydney to Melbourne one day this week tried to change his flight from 8am to 9am and was told the additional cost was $880. He remained on the original flight, fuming as the plane remained on the tarmac for more than an hour.

High fares are not unique to Qantas. But it is the regularity of stories like this that has brought together an unlikely alliance of business leaders with union officials, not to mention hapless budget customers, in arguing that Qantas is providing lousy service at exorbitant prices.

The ubiquitous Alan Joyce is the face of that community anger, acknowledging that he draws the ups and downs of Qantas’ performance. As a CEO and a public figure, he says, criticism, even from unions, is not unusual and part of the job.

“I’m sure the next CEO will have the same,” he says. But this seems very personally directed.

Passion for an ‘icon’

So it’s happy to apologize again for the poor customer experience while offering various freebies like this week’s pledge of $50 coupons, upgraded lounges, and more frequent flyer seats. Qantas staff will receive additional travel benefits for themselves and their families. Joyce also argues that Jetstar’s flights still represent extraordinarily good economic value for customers.

But more importantly, he wants to assure Qantas passengers that the percentage of flight delays and lost baggage is much improved this month from July’s dismal figures, and will mostly return to pre-July levels. COVID-19 next month.

He still generally tries to turn all of this into a positive, saying that the reaction to Qantas, both good and bad, shows how passionate Australians are about their “iconic” national airline, how enthused and focused they become about it.

Qantas has suffered plenty of other brand damage over the years, it says, including when it grounded the airline in 2011 to confront and end persistent industrial action by unions at the time.

“What’s different this time is that all the other airlines are in the same boat,” he says. “All the airlines are giving bad service right now. So the brand took a hit, but the relative performance is holding up very well.”

And naturally, he maintains that the Qantas brand is recovering quickly while pointing to Virgin’s comparative performance. But if Joyce can argue that Australians are so passionate about Qantas, she must also accept that they expect much more from it, especially when they pay so much for the service.

Joyce knows the airline’s bottom line should improve dramatically this financial year, in part due to a reduced cost base.

He will resign next year after 15 years. Until then, his role requires considerable improvement for Qantas.

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