Qantas will further cut its domestic flight schedule in response to rising fuel prices as the airline announced it would give nearly 20,000 employees a $5,000 payment to share the benefits of the recovery.
The announcement comes as airports braced for a period of massive demand driven by a school holiday rush, and as the federal government confirmed, Qantas had the highest number of cancellations from any domestic airline last month†
Passenger numbers are expected to rise to pre-pandemic levels from Friday, the last day of the Victoria and Queensland school year. Schools close a week later in New South Wales and Western Australia.
Qantas said Thursday it would “go all out” to ensure disruptions travelers face at Easter were not repeated during the holiday period.
The airline has tried to put some of the blame on staff shortages at airports, with Qantas chief Alan Joyce reportedly writing to airport chiefs to raise the issue.
In a market update on Friday, the airline predicted it would make a significant loss of between $450 million and $550 million this year, with the Qantas group forecasting a return to underlying profit in the next financial year.
It also announced it will give 19,000 employees a $5,000 payment once the new business negotiation deals are finalized for them. Qantas will spend approximately $87 million on employee benefits. The payment comes after a company-wide pay freeze of two years.
In a statement, Joyce said the company “cannot afford to permanently increase salaries above the two percent threshold that we have set, but we can afford to make this one-time payment on top of the Qantas stock rights that we have. we have already given.” †
For July and August, the airline will reduce capacity by another 5%, on top of the 10% it had already announced. The 15% capacity reduction will last through September, with a 10% capacity reduction from October to March. The airline will contact customers booked on flights that are being postponed.
While Qantas didn’t announce a reduction in its international capacity Friday, it said the group will fly at 83% of pre-Covid levels by its fiscal quarter starting in July — a 90% drop in the current quarter.
Ahead of the July holiday season, Qantas also tried to thank customers “for their patience and understanding” during what was “a challenging restart for the industry worldwide”.
Qantas has been heavily criticized for baggage delays and poor on-time performance this year, with the Transport Workers’ Union claiming the airline’s decision to outsource baggage handling personnel is adding to the problems.
Qantas said ground handling staff will increase by 15% during the July holiday compared to staffing levels during the Easter holiday.
The TWU criticized the condition that employees would not receive the $5,000 payment until their relevant EBA was completed — and called for payments to be made to all employees, including recently outsourced ground handlers.
“The liabilities associated with this sham payment are simply more wage suppression tactics that Qantas has become accustomed to under the 15-year Joyce regime. All employees, especially those illegally fired by Qantas management, owe this payment and much more,” said National Secretary Michael Kaine.
“This tactic kills two birds with one stone: distract the angry public that Qantas will be the worst performing airline, and pressure workers to accept wage freezes that will crush wages and conditions at the airport for decades,” Kaine said.
Joyce also announced on Friday that the CEO of budget airline Jetstar, Gareth Evans, will step down from his position in December.
Figures from the Ministry of Transport showed that the Qantas network had an on-time arrival rate of 60.7% in May, compared to Virgin Australia at 65.7% and Rex at 75.5%.
Qantas also recorded the highest number of cancellations in May at 7.6%, while Rex Airlines recorded the lowest at 1.4%.
The regional airline took a jab at its competitor over the latest data.
“Rex treats its customers with respect and decency; we are not canceling flights en masse and we are not losing truckloads of luggage from our passengers,” the airline said in a statement on Thursday.
Sydney Airport predicts that more than 2 million passengers will pass through between June 24 and July 17, with 1.5 million expected to take domestic flights.
Melbourne Airport expects similar figures, with more than 2.1 million people expected to pass through its terminals.
Sydney Airport Director Geoff Culbert warned passengers to prepare for queues amid widespread staffing problems.
“The root cause of these challenges is that every airport company is rebuilding its workforce in the tightest job market in nearly half a century,” he said.
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