Qantas CEO Alan Joyce has been accused of misleading the public by Parliamentary Senate committee members after he and airline executives admitted the airline was holding $100 million more in flight credits than it had previously declared.
Mr Joyce, who appeared before the Senate Select Committee on the Cost of Living in East Melbourne on Monday (28 August) with Qantas’ head of corporate affairs Andrew McGinnes and Jetstar CEO Steph Tully, was pressed hard on the airline’s rapid return to profit after the pandemic.
Coming less than a week after the airline recorded a $2.47 billion gross profit in 2022-23, Mr Joyce was unrepentant about the airline’s recent success.
Former national secretary for the Transport Workers’ Union and now Labor Senator Tony Sheldon suggested the airline’s credibility and reputation had suffered under Mr Joyce’s leadership, just months before he departs the role.
“This is one of the most discredited companies,” Senator Sheldon said. “On its record of complaints, are you saying you deserve every dollar you’ve received?”
Mr Joyce said: “There’s lots of criticism of corporate profits at the moment, due in large part to the cost-of-living pressures happening in parallel and we understand that.”
The airline recorded losses of nearly $7 billion during the 30 months of the pandemic and was reportedly 11 weeks away from insolvency, necessitating bailouts totalling more than $2 billion by the Commonwealth.
Senator Sheldon has been scathing of Qantas’ moves over the past decade to get rid of baggage handlers, catering staff, and ground staff in favour of contracted workers who aren’t subject to awards or union representation. In Monday’s committee hearing, he latched on to the amount of flight credits owed by the airline.
When asked for a breakdown of the total flight credits still owing – that is, flights cancelled during the pandemic for which passengers were given a credit – Mr Joyce appeared initially evasive.
“Last Thursday you said there are $370 million in outstanding flight credits, but what you didn’t say is that you’ve excluded Jetstar and overseas customers from the total,” Senator Sheldon said. “What is the total sum value of flight credits remaining across the whole Qantas group, including Jetstar and overseas customers?”
Ms Tully admitted the credits being held by Jetstar were about $100 million, while Mr McGinnes was unable to put a number on the amount on the credits held by the airline’s overseas customers.
“We’d be reticent to play warmer-colder with this, I think we’re happy to take it on notice and come back to you,” Mr McGinnes said in response to Senator Sheldon, adding the airline had redeemed or refunded about $3 billion in flight credits.
Senator Sheldon noted: “You would have thought, coming into this hearing, that you’d be prepared for very obvious questions.”
Regardless, at least $470 million is not an unsubstantial amount considering the airline has given customers until the end of 2023 before the credits will lapse.
“Our focus right now is to make sure Australians are using that credit or getting a refund by the end of the year,” Ms Tully said. “Our absolute goal is zero credit left by the end of December.”
The committee also questioned what role Qantas played in the Federal Government’s refusal in July to allow Oneworld alliance partner Qatar Airways to operate 21 additional flights per week into Australia.
Mr Joyce said while the airline had made representations to the Government in late 2022, he expected international airfares to fall as greater capacity entered the market through airlines such as Singapore Airlines and China Southern.
When asked about comments made last week by assistant treasurer Stephen Jones that blocking Qatar was in the national interest, Mr Joyce responded: “I don’t think anybody would say you should grant traffic rights that would mean that you are disadvantaging the Australian national interest and I think the assistant treasurer was saying that, in our mind, and we would agree with that.”
It was announced in May Mr Joyce would retire from his 15-year tenure as Qantas Group CEO in November, to be replaced by current chief financial officer (CFO) Vanessa Hudson.