By Amelia McGuire
A defiant Qantas chief executive Alan Joyce has dismissed calls for his resignation after a spate of customer service issues, pointing to record demand for flights as proof of the airline’s recovery.
Qantas on Thursday reported that its full-year loss more than halved to $860 million in the recently ended financial year.
The result means Qantas’ cumulative losses during the COVID-19 pandemic have surpassed $7 billion. But shares in the airline soared 7 per cent after the company issued a bullish forecast for the year ahead and announced a $400 million share buyback program.
“I think I’ve had more rapid resignation requests that any other chief executive or public figure out there. It’s not unusual, it’s part of the job,” Joyce said on Thursday, in response to a question about his future. “The board asked me to continue in this job to get through this crisis. We will get through the current problems…and I think at the other end of this Qantas will be stronger than it was before it went in”
“Our demand is at record levels at the moment,” Joyce said “I’ve never seen demand this high. The commercial side of the business is the healthiest it’s ever been, and I’m amazed at how rapidly it’s recovering.”
This year Qantas has struggled to cope with a surge in demand for air travel, with staff shortages, flight delays and lost baggage resulting in widespread customer complaints. The airline’s aggressive cost-cutting program at the start of the pandemic – which included the axing of 9400 jobs – has been blamed for its slipping performance.
The national carrier formally apologised for its recent problems on Sunday and extended an olive branch to its frequent flyers, offering them $50 flight discounts, additional lounge invitations and improved reward seat availability.
Joyce, who has led the airline for close to 14 years, has been under pressure from the head of the Transport Workers Union, Michael Kaine, and some customers to resign over issues.
The company said on Thursday it would invest more than $400 million in customer loyalty offerings, including new lounges, and by launching new routes such as direct flights from Sydney to New York via Auckland. It will also replace its 28 Airbus A330s, used mainly on international flights, in the next 12 to 18 months.
Wilson Asset Management’s portfolio manager, John Ayoub, said Qantas’ recovery was well on track. “Many didn’t expect the balance sheet to repair so quickly, it’s a positive indication of where the business is heading.” Wilson Asset Management owns a 0.4 per cent stake in Qantas.
Ayoub said Qantas needed to reinvest in the business, particularly in its brand and reputation given the airline had flagged it would continue to rely on high ticket prices to offset the rising cost of fuel.
“Qantas’ hedging program is about to roll off and they’ve said they’ll rely on high pricing, which is bad news for the consumer. We have to consider what it will be like going forward with high demand and record costs,” Ayoub said.
Joyce said the result showed that the company was showing signs of a rapid recovery from the effects of COVID-19 lockdowns.
“We will fix it and it will be fixed rapidly and we know the brand will recover.”
Qantas shares rose by 7.05 per cent today to $4.86.
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