Qantas CEO Alan Joyce told CNBC the airline was unable to return to profit as quickly as other airlines such as Singapore’s because it didn’t get as much government support and faced a “massive wave of Covid… no one was planning “.
Australia’s national airline posted its third consecutive year of statutory pre-tax losses of $1.19 billion Australian dollars ($830.67 million), attributing the performance to the delta and omicron outbreaks in Australia and the initial costs of restarting the airline. after the lockdowns ended.
Qantas posted losses of A$2.35 billion in 2021 and A$2.7 billion in 2020.
Asked how Qantas compares to Singapore Airlines, which returned to a net profit in the first quarter of fiscal 2022/2023, the CEO replied: “We are very different from the different airlines because within Singapore, there was not one need to lay off, withdraw the people we had to do”.
“Because we ended up getting very little support from the government, the government rented out some of the planes and gave our people who were unemployed their money, but with people out or out of jobs from the airlines, a lot of people left the industry.” he told CNBC’s “Squawk Box Asia.”
“Secondly, we’ve had this massive wave of covid here in Australia that no one was planning for.”
Under pressure
The loss announcements come as Qantas workers go on strike Thursday to protest inaction in wage negotiations.
On Monday, Qantas began sending out emails to its frequent flyers apologizing for failing to meet the standards they expected from the company and offering each customer an A$50 discount on a return flight.
The Australian Transport Workers Union has called on the Qantas CEO to resign over “empty promises to frustrated passengers” and “announce more tactics to silence workers and drive down wages”.
noble Phil | Reuters
Joyce also told CNBC that schedules that were in place six months in advance during the pandemic have been changed and said staff absences due to covid infections also derailed her recovery plans.
The workers’ absences caused operational problems, in particular, in the execution of domestic flights, which is “more complicated” and different from international routes, Joyce added.
“It’s much more complicated, with some aircraft doing eight sectors a day, when you have a problem in the morning with someone not showing up, which affects all eight sectors during the day,” he said, noting the differences between the markets.
“Markets that are similar to us, like Europe and North America, are seeing similar issues because people weren’t expecting this big Covid wave.”
In North America, however, American Airlines returned to profit in its second quarter, as did Singapore Airlines, to which the CEO compared Qantas.
Singapore Airlines does not have a domestic market. All of its income is derived from international flights that were closed during the pandemic.
By July 2020, it had lost nearly all of its passenger transportation and grounded many of its planes and staff, a company statement said at the time.
recorded a loss of $4.3 billion Singapore dollars ($3.09 billion) for fiscal year 2020/2021.
SIA reduced its losses in 2021/2022 to S$1 billion and has since posted a first quarter net profit for the year 2022/2023.
It has raised S$22.4 billion since April 2020, including S$15 billion from shareholders through the sale of shares and convertible bonds. Singapore’s sovereign wealth fund Temasek is the majority shareholder and owns 55% of the airline.
Qantas received around A$2 billion in government support, including A$850 million in wage subsidies for those who lost their jobs.
The Australian airliner has been under pressure for poor performance, including canceled flights and lost baggage. Unions have called for Joyce’s resignation.
Qantas still has a halo as one of Australia’s best employers. People want to get into aviation.
The Transport Workers Union of Australia called on Joyce to resign over “empty promises to frustrated passengers” and for announcing “tactics to silence workers and suppress wages”.
But things are looking up, Joyce told CNBC, adding that nearly 25,000 applicants applied for the 2,500 new jobs recently announced at the airline.
“So Qantas still has a halo as one of the best employers in Australia. People want to get into aviation,” he said.
Since the start of the pandemic, the company has cut nearly 9,000 jobs from its workforce of nearly 30,000, the company said in an email response. Since then, he has replaced only about a third of the employees and contractors he laid off.
However, Qantas is not the only airline in the region to post losses on Thursday.
Competitor Air New Zealand posted a loss of NZ$725 million ($452.1 million) in fiscal 2022, before significant items and taxes.
In June, the International Air Transport Association forecast that the North American airline industry would return to profit by the end of 2022, while the rest of the world would continue to face losses.
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