Qantas confident in post-pandemic recovery

Prashant Mehra | November 4, 2022

Qantas chair Richard Goyder has painted a bullish picture of the national carrier’s post-COVID recovery efforts and also ruled out a leadership change any time soon.

The airline says its performance is quickly reaching pre-COVID levels of service and it will expand operations through additional routes and aircraft, after earlier flagging a likely return to profitability after five consecutive half-year losses during the pandemic.

Qantas said domestic flight cancellations dropped to 2.2 per cent in October and are now below pre-COVID levels, while on-time performance for the month improved to 74 per cent from 69 per cent in September.

“For several months this year, we weren’t living up to the service standard people rightly expect,” chief executive Alan Joyce said at the company’s annual general meeting on Friday.

“Today, we’ve released figures that show we were firmly back to pre-COVID levels of service in October and in some cases, better.

“Maintaining this level of service requires more resources than it did pre-COVID,” he told shareholders.

The airline aims to keep on-time performance in the mid-70s for the remainder of the calendar year, after factoring in predictions of more extreme weather in some parts of the country.

It said recent floods in NSW and Victoria as well as air traffic control constraints were among the factors that have affected punctuality.

Qantas has been under fire for months over flight delays, poor baggage handling and falling service standards. In July, less than half of the airline’s domestic flights arrived on time.

Mr Goyder defended his embattled CEO, who faced calls to step down as the airline struggled to cope with the rebound in demand.

“He will continue serving as CEO until at least the end of 2023,” Mr Goyder told shareholders at the AGM. 

“In due course, Alan and I will sit down and have a conversation and determine what that time frame looks like, but that will be some time into next year.”

Mr Goyder said the airline is confident it has very capable executives and will also scan externally as and when the CEO succession is to occur.

The carrier surprised the market last month by flagging it expects a “very strong” profit before tax of between $1.2 billion and $1.3 billion for the first half of 2022/23.

The airline is spending $200 million to roster additional staff, train recruits and will also keep up to 20 aircraft on standby over the summer peak to help minimise delays.

It also promised $40 million in wage increases for 20,000 of its employees, including $10,000 for bonuses in cash and shares, and add 10,000 workers’ friends and family as beneficiaries of its staff travel program.

On Friday, Mr Goyder said Qantas will also consider further returns of capital to shareholders.

“We’re not in a position for some time to pay franked dividends, which means if we paid dividends and they’re taxed in the shareholders hands, that’s a very inefficient way of distributing excess capital. So we’ll look at the most efficient way of returning capital to shareholders,” he said.

Qantas has completed about 60 per cent of its previously announced $400 million share buyback.

Meanwhile, Mr Goyder as well as directors Maxine Brenner and Jacqueline Hey easily secured re-election at the meeting on Friday.

Qantas shares closed unchanged at $5.95 in a firm Australian market.