Balancing Act: Qantas reaps $1bn from taxpayers, but jobs, flights, fares all up in the air

Economy & Markets||

Charging exorbitant prices for travellers stranded overseas while raking in record government subsidies. Qantas and Virgin are the quintessential cases of “privatise the profits, socialise the losses”. Tasha May.looks at the airlines’ fine balancing act in corporate socialism during the pandemic.

Qantas and Virgin have enjoyed the lion’s share of COVID-19 related government handouts to companies – not unusual given the huge effect of the pandemic on the travel industry.

At the same time, however, they are charging exorbitant prices for international and domestic flights for Australians struggling to make it home for Christmas.

The Lion’s Share

As of October, the latest available figures, the Qantas Group collected $786 million in COVID-19 related government subsidies, including $446 million in JobKeeper payments.

Qantas and Virgin also received $715 million from an assistance package delivered in August to help the airlines maintain a minimum network of domestic flights.

Qantas was paid $47 million for maintaining a minimal international network.

In June, Qantas cut 6,000 jobs and recently revealed it is outsourcing more than 2,000 ground staff roles across 10 airports. Out of a pre-COVID workforce of 29,000, Qantas has now cut about 8,500 jobs due to international travel bans and state border closures.

International Repatriation Flights

The Department of Foreign Affairs and Trade (DFAT) has been allowing Australians stuck overseas to register for assistance in finding flights to return home. Yet many Australians have been taken off the register without their knowledge for turning down flights that are either completely unaffordable or logistically impossible to take.

DFAT has been allowing Australians stuck overseas to register for assistance in finding return flights to Australia. Many Australians have found themselves deregistered from this list, which some have claimed occurred after turning down flights that were out of their price range or logistically impossible to take. Many of these stranded Australians are sharing their stories on the Facebook group Australians Stuck Around the World.

This is allowing the Federal Government to claim that these Australians do not in fact wish to return home so they can “cook the books” and underplay the number of Australians wishing to return home. This is arguably in breach of article 12 of the UN International Covenant on Civil and Political Rights which states that no citizen should arbitrarily be deprived the right to enter their own country.

Consider the case of Newcastle teacher Deanne Vowels, whose family flew to England to attend her British husband’s parents’ 50th wedding anniversary. They found themselves with a $70,000 bill to get back home, with tickets costing $10,000 each.

Vowels’ case was heard by the Senate Select Committee’s Hearing in September on the Australian Government’s response to the COVID-19 pandemic.

The Chair of the Senate Select Committee’s Hearing, Senator Katy Gallagher, asked Deputy Secretary Simon Duggan, “has the Prime Minister contacted, say, Alan Joyce, to see what Qantas can do to bring Australians home?”

Screenshot from Hansard

Mr Duggan responded by citing the availability of seats but did not answer the problem of price.

Lea Prodromou, owner of Lea’s Travel and Cruise, says “$10,000 or $12,000 air fares – no one can afford that. It’s ridiculous. Qantas has saved themselves so much money by getting rid of their staff. They might be crying poor at the moment, but they’re way ahead. It’s wrong at the moment because they’re not paying anything. They’re not flying there’s no fuel, how can they justify having those fares?”

In the aftermath of the Senate Select Committee Hearing, Qantas announced a new program of repatriation flights launched in October with one-way economy fares costing $2150 from London, $1750 from Johannesburg and $1500 from New Delhi not including taxes.

Emails show Qantas promotes climate action in public, betrays carbon commitments in private

 Domestic Problems

 2020 has not only raised problems for international travellers, but also for domestic ones. For example, Qantas’ stance is that if the airline cancels a flight, passengers are booked on the next available flight to their destination (if possible), at no additional cost. Alternatively, they can choose a flight credit or a refund.

Yet when Adam Glezer’s Qantas flight from Melbourne to Brisbane was cancelled, he was told there was “no availability on direct flights in the same class, despite there still being several direct flights running from Melbourne to Brisbane” for the day he’d booked.

He was offered a refund on what he had paid, which was a “nominal amount compared to the new price being asked for the replacement flight scheduled 10 minutes later,” says Glezer.

“Qantas were the ones that cancelled it, it should be their obligation to change it to the nearest available direct flight.”

Glezer’s brother found himself in a similar situation when his 10.30am flight to the Gold Coast was cancelled and he and his family were put on a 7.20am flight, in contradiction to Qantas’ stated position of putting clients on the “next” available flight, not an earlier one.

“My brother has a little one, which meant they would have had to get their baby up at 4.30 in the morning, which was going to be very inconvenient for them.”

Glezer is a consumer advocate on behalf of Australian travellers, running three Facebook groups with more than 16,000 members. He was on the phone for four hours between 8pm and midnight waiting to speak to a Qantas representative, and then spent another hour and a quarter discussing the matter before ultimately resolving both issues.

Yet Glezer says he is “worried for the people in the same situation –  those people who are unable to resolve this issue in a satisfactory manner for themselves, they’re the ones that I’m most concerned about”.

He encourages anyone who has any issues with travel companies or support change in the industry for better consumer protections to join his Facebook group Travel Industry Issues – The Need For Change for Australians.

Rico Merkert, Professor and Chair in Transport and Supply Chain Management at the University of Sydney says, “as both Qantas and Virgin need to repair their balance sheets, they need to try and maximise yields as soon and as much as possible, hence higher airfares.”

Editor: Elizabeth Minter

Qantas first, daylight second, taxpayers a distant third

 





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