Qantas boss Alan Joyce has told a Senate select committee on the cost of living that he understands the outrage surrounding the airline’s record $2.47 billion profit announced last week in light of the cost of living crisis.
Joyce – who is the only ASX-100 chief executive to be summoned to appear before the inquiry – said airfares have been falling since the industry was deregulated in the 1990s.
Qantas boss Alan Joyce delivered a record $2.27 million profit for his last year leading the airline business. Credit: Dion Georgopoulos
“There’s a lot of criticism of corporate profit at the moment, due in large part to the cost of living pressures happening in parallel – and we understand that. In Qantas’ case, we put a lot of thought into balancing the needs of those who rely on us, and who we rely on – namely, our people, our customers and our shareholders,” Joyce said at his first Senate appearance in nine years.
He pointed to $340 million in non-executive employee bonuses and the Qantas group’s 17th network sale for the year as examples of the carrier group inviting customers and staff to share in its profits.
Senator Tony Sheldon, a Labor MP who has long been critical of Joyce and formerly held senior positions within the Transport Workers Union, said last week the airline had changed for the worse under Joyce’s leadership, and it was about time he was held to account.
“After almost a decade of evading parliamentary scrutiny, even while receiving a $2.7 billion no-strings-attached bailout from the Morrison government, Joyce has a lot to answer for.”
Joyce said airfares have fallen by up to 50 per cent since the industry was deregulated in the 1990s, adjusted for inflation.
“There’s not too many goods or services where that’s the case,” he said in his opening statement.
He doubled down on his prior comments that airfares peaked from their COVID-19 highs in December and are continuing to fall as capacity is returned by all airfares.
“Today, international fares are about 10 per cent higher in inflation adjusted terms, compared with pre-COVID. Domestic fares are up by about 4 per cent. For Qantas and Jetstar, our domestic flying is now above pre-COVID levels,” Joyce said.
Joyce said the government should address the regulation surrounding Australia’s airports if it wanted to put downward pressure on airfares.
“Australia’s monopoly airports are some of the most profitable in the world – and ultimately, it’s the passenger who pays … Our profit margin is 13 per cent. Before it was bought out, Sydney Airport’s margin was around 40 per cent,” Joyce said in his opening statement.
He called for the upcoming Aviation White Paper to consider policy settings to help resolve commercial disputes between airlines and airports to “unlock growth and put downward pressure on airfares”.
He also said the government needs to create policy to enable a local sustainable aviation fuel industry to create jobs and economic growth for regional Australia and the broader economy. Qantas and Airbus have so far pledged a combined $400 million to develop a local industry.
Joyce also doubled down on his opposition to Qatar Airways being granted additional flights to Australia, following comments from Assistant Treasurer Stephen Jones, who said the government chose to reject the Doha-based airline to ensure the profitability of local airfares.
“We think Australia should protect its national interest,” Joyce said.
He pointed to Qantas’ own recent bilateral air rights rejection in Fiji to say bilateral air rights rejections were relatively common. Had Qatar Airways been granted the right to increase to 21 services per week it would have generated up to $800 million additional revenue for the tourism industry.
“Qatar can add capacity through flying bigger aircraft to cities like Adelaide, Darwin. There is nothing stopping them from adding capacity to those locations,” Joyce said.
He refused to comment on the nature of his conversations with Prime Minister Anthony Albanese on this topic.
More to come.
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2023-08-28 05:59:13Z
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