Qantas CEO Alan Joyce told CNBC that the airline was unable to return to profits as temporarily as other airlines such as Singapore as it didn’t get as much from the government and faced a “massive wave of CovidArray. . . no one had planned it. “
The Australian flag carrier posted its third consecutive year of pre-tax legal losses of A$1. 19 billion ($830. 67 million), attributing functionality to 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.
When asked how Qantas compares to Singapore Airlines, which returned to net profit in the first quarter of the 2022/2023 fiscal year, the CEO replied: “We are very different from the other airlines because in Singapore they don’t want to fire, give up other people I had to do. “
“Because we ended up getting so little from the government, the government rented a portion of the plane and gave their money to other people who had status, but with other people who stood out or don’t have jobs in the airlines, many others people left the industry,” he told CNBC’s “Squawk Box Asia. “
“Secondly, there was this big wave of covid here in Australia that nobody anticipated. “
The loss announcements come as Qantas staff go on strike on Thursday to protest pay cuts.
On Monday, Qantas began sending emails to its ordinary travellers apologizing for not meeting the criteria they expected from the company while offering visitors a $50 discount on a round-trip flight.
Joyce also told CNBC that schedules that were in position six months before the pandemic have been reversed and said staff absences due to covid infections have also derailed his recovery plans.
The workers’ absences have triggered operational disruption — in the operation of domestic flights, which are “more complicated” and others on foreign routes, Joyce added.
“It’s much more complicated, with some planes doing 8 sectors a day, when you have a challenge in the morning with someone who doesn’t show up and it affects all 8 sectors of the day,” he said, pointing to the differences between the markets.
“Markets that look like us, like Europe like North America, are seeing disorders because other people weren’t expecting this big wave of covid. “
In North America, however, American Airlines returned to profit in the current quarter, as did Singapore Airlines, to which Qantas CEO belongs.
Singapore Airlines has no domestic market. All of their profit comes from overseas flights that have been disrupted by the pandemic.
By July 2020, it had lost nearly all of its passenger shipment and grounded many of its planes and personnel, according to a company statement at the time.
It posted a loss of S$4300 million (US$3090 million) for the 2020/2021 fiscal year.
SIA reduced its losses in 2021/2022 to S$1 billion and has since posted a profit in the first quarter of 2022/2023.
It has raised S$22. 4 billion since April 2020, adding S$15 billion from shareholders from the sale of shares and convertible bonds. Singapore’s sovereign wealth fund, Temasek, is the majority shareholder and owns 55% of the airline.
Qantas earned around A$2 billion in government assistance, and added A$850 million in wage subsidies for those who lost their jobs.
The Australian airline has been strained by its poor performance, adding cancelled flights and lost luggage. The unions called for Joyce’s resignation.
The Transport Workers Union of Australia called on Joyce to resign over “empty promises to frustrated passengers” and announced “tactics to silence and cut wages”.
But things are improving, Joyce told CNBC, adding that only about 25,000 applicants have applied for the 2,500 jobs recently announced by the airline.
“Therefore, Qantas still has the halo as one of Australia’s most sensible employers. People need to get into aviation,” he said.
Since the beginning of the pandemic, the company has eliminated nearly 9,000 jobs from its nearly 30,000 workforce, the company said in an email response. Since then, it has replaced about a third of the workers and contractors it has laid off.
However, Qantas is 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 parts and taxes.
In June, the International Air Transport Association predicted that the North American airline industry would again be in the dark until the end of 2022, while the rest of the world would continue to face losses.
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