Key Points
- A Senate committee is investigating the the cost of living pressures facing Australians.
- Senators questioned Qantas chief executive Alan Joyce in a public hearing on Monday.
- The airline recently reported a record profit of $2.47 billion, after losing almost $2 billion the previous year.
Qantas and its budget subsidiary, Jetstar, are sitting on $470 million worth of unclaimed flight credits.
This was one of the key details to be revealed in a public hearing in which Qantas chief executive Alan Joyce was questioned on Monday.
The hearing is part of the federal government's Select Committee on Cost of Living, looking into the cost of living pressures facing Australians.
Joyce was also asked about his conversations with Prime Minister Anthony Albanese, flight cancellations, and the exclusive Qantas Chairman's lounge.
Joyce defends Qantas' record profits
In his opening address, the outgoing Qantas chief defended ($1.7 billion post-tax) — a record for the airline, which came after it recorded an almost $2 billion loss the year before.
"There's lots of criticism of corporate profits at the moment, due in large part to the cost-of-living pressures happening in parallel and we understand that," Joyce said at the hearing in Melbourne.
Earlier on Monday, Assistant Treasurer Stephen Jones said the government wanted to ensure it was driving down the cost of airline tickets in Australia, but not at the expense of the industry.
"Having a national airline that occasionally posts a profit is not a bad news story, (it) is actually a good news story," Jones told reporters.
In May this year in the wake of forecasts that showed Qantas was on track to record a $2.5 billion profit, the Transport Workers' Union said the airline should pay back the government assistance it received at the height of the COVID-19 pandemic.
Qantas received $2.7 billion from taxpayers during the pandemic, including $900 million from the JobKeeper program.
Collusion questions over Qatar rejection
Coalition senators asked Joyce whether Qantas had colluded with the government to block competition from Qatar Airways, which was rejected in a bid for extra flights.
Despite both airlines being members of the Oneworld alliance, Qantas opposed the Qatar plan in which it wanted to add an additional 21 flights into Australia's major airports on top of the 28 it currently operates.
Qatar had wanted to increase the number of flights it operates in to Australia, but its request was rejected by the federal government. Source: AAP, SIPA USA / Mondadori Portfolio
When asked by Greens senator Penny Allman-Payne if he had discussed the issue with Albanese or Transport Minister Catherine King, Joyce said would never divulge such conversations.
"I’ve kept that for all seven prime ministers and I have no intention of changing my approach," he said.
$470 million of unused flight credits
Millions of customers who were unable to take their flights due to COVID-19 interruptions in previous years were provided credit to use on flights instead of refunds.
Qantas has said previously it was sitting on $370 million worth of travel credits, but refused to detail whether that included Jetstar and overseas bookings.
Joyce confirmed that figure on Monday when it was revealed that figure only relates to Qantas bookings, with Jetstar boss Steph Tully saying that the budget airline's unused credits amounted to about $100 million.
“You’re not being transparent,” Senator Tony Sheldon said to Joyce.
“You’ve just admitted there’s another $100m that’s not been disclosed.”
Qantas holds $370 million worth of unclaimed COVID-19 flight credits, while its subsidiary Jetstar is sitting on about $100 million. Source: Getty / William West/AFP
The committee was told Qantas had refunded $3 billion worth of travel credits.
It heard media campaigns, advertising, and text messages were being used to encourage people to claim the credits and get the balance to zero by the end of December.
The invite-only Chairman's lounge
Despite constant questioning on the topic by Opposition senator Matt Canavan on the topic, Joyce refused to reveal whether any family members of any politicians had been provided free memberships to the invite-only Qantas Chairman's lounge.
It was recently reported Albanese' 23-year-old son, Nathan, was a member of the invite-only Qantas Chairman's lounge, and questioned why it had not been acknowledged on Albanese's register of public interests.
Joyce repeatedly said he would not comment on the matter, citing privacy issues.
Another committee member interrupted the line of questioning to say: "There is significant powers of the Senate to obtain information and documentation and I'm not just not quite sure that this falls in the category which would not provide that information."
Joyce was then asked to take the question on notice.
Flight cancellation rates
Canavan questioned why the airline group had cancelled so many of its recent flights between Sydney and Melbourne.
He said about 8.5 per cent of recent Qantas flights and 12 per cent of Jetstar flights on the route were cancelled, whereas Rex Airlines had cancellation rates of about 2 per cent on those routes.
Canavan said Qantas potentially has "a financial interest in managing capacity on these routes" because fewer flights mean airlines were "able to charge higher prices from restricting that capacity."
Joyce said as Rex operates a much smaller number of routes, it needed to better protect those few which was why more of its flights between the two cities took off.
"Rex is using its jet aircraft on three routes, so we have to protect our whole network, they have to protect three routes."
Lower airfare solutions
Putting forward solutions to lower ticket prices, Joyce called for a sustainable aviation fuel industry that would reduce emissions and be a huge opportunity for jobs and economic growth.
"It would reduce the impact of big swings in oil prices and would help bridge a significant gap in Australia's energy independence," he said.
Sustainable aviation fuel was the "most significant tool airlines have to decarbonise".
The said increased airport pricing would prove a "major cost pressure" for the Qantas Group.
"The regulatory regime that governs the relationship between airports and airlines isn't working," he told the hearing.
As the government prepares to release its aviation white paper in 2024, Joyce said policies were needed to help with efficient resolution of commercial disputes between airlines and airports.
Liberal frontbencher Anne Ruston said passengers could not take any comfort from Joyce's appearance.
"There are some very big questions not just to be answered by Qantas but to be answered by the government," she told the ABC.
- With additional reporting by the Australian Associated Press.
