Qantas criticism needs context

In the first week of the NSW, Western Australia and ACT school holidays in early July, Virgin canceled 14.7 per cent of its flights and Qantas 6.7 per cent. On the last day of these holidays, Virgin canceled every fifth flight out of Sydney.

The industry’s on-time performance in July was also its worst on record, with only 55 percent of flights arriving on time. The long-term average is 81.9 percent.

In the first week of the NSW, Western Australia and ACT school holidays in early July, Virgin canceled 14.7 per cent of its flights and Qantas 6.7 per cent.

In the first week of the NSW, Western Australia and ACT school holidays in early July, Virgin canceled 14.7 per cent of its flights and Qantas 6.7 per cent.Recognition:AP

Rex’s punctuality rate was 68.3 percent, also the lowest on record. Only 51.5 percent of Jetstar flights, 53 percent of Qantas flights and 52.5 percent of Virgin flights arrived on time.

There’s a possible explanation for why Jetstar’s performance was particularly poor. The resurgence in demand was mostly related to the leisure routes it served. That may also have been a factor in Virgin’s performance stats.

The bigger point is that all airlines struggled to handle the faster-than-expected recovery in demand with capacity that had been significantly reduced in response to two years of COVID-scarred demand.

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The larger airlines had mothballed aircraft, shed large numbers of staff compared to pre-pandemic levels (Virgin was in a better position than Qantas to manage its staffing needs after leaving administration) and flew fractions of theirs during that time Capacity before the pandemic 2 years.

Several attempts to increase capacity over the past year have ended after abrupt lockdowns and border closures, so it’s not surprising that airlines have been wary of recruitment and slow to bring capacity back into service.

As a result, they have been overtaken by this year’s increasingly buoyant demand. According to the ACCC, more passengers – 4.7 million of them – flew in July than in any other month since the pandemic began.

Airlines have been unhelped by COVID and flu-related illness rates, which have resulted in staff absenteeism 50 percent above their normal rates.

The Qantas group and Virgin, after initially scrambling to meet that demand – and experiencing operational chaos and a massive backlash from their customers as a result – have significantly reduced capacity to match their reduced capabilities and have added more people as fast as a tight job market, security clearances and the proven insecurity of employment in the industry will allow.

Airlines across Australia have had to cope with a large number of COVID and flu-related staff absences throughout the winter.

Airlines across Australia have had to cope with a large number of COVID and flu-related staff absences throughout the winter. Recognition:James Brickwood

When increased demand meets reduced capacity, fares increase. With the kerosene price in Asia-Pacific now more than 70 percent higher than a year ago, they are rising sharply. The ACCC said its index of cheapest discount fares rose 56 percent in the four months to August. The impact of higher fuel costs is obviously greater on long-haul international routes.

As the ACCC report says, the problems plaguing domestic airlines – and domestic airports – have emerged worldwide. Delays, cancellations, lost baggage and staff shortages are characteristic of the global industry, not just Australia.

According to the ACCC, almost every tenth flight in the Netherlands was canceled in a week in February. British Airways has canceled nearly 30,000 flights from its April to October schedule. Weekly cancellation rates were 8.3 percent in the US and 5.6 percent in the UK. Airports set caps on the number of flights they allow.

Contrary to the impression of four corners report, these are common challenges for all airlines, not just Australia and not just Qantas.

Qantas has always been scrutinized for its brand and premium pricing and held to higher standards than its competitors.

It could be argued that Qantas and its competitors here and elsewhere — have cut too hard in response to the pandemic, but closing not only national borders but also (rather erratically) state borders left them with no option.

Even with federal government support for the sector to keep at least some planes aloft, Qantas alone has lost about $7 billion over the course of the pandemic. It was, it was said, only a few days away from bankruptcy.

Globally, the industry has lost more than US$200 billion (US$296 billion) and laid off an estimated 2.5 million workers. Maintaining pre-pandemic staffing levels was not an option when their fleets were wrecked and revenue was dribbling. The industry – and Qantas and Virgin – went into survival mode.

There are signs of improvement in Australian industry. Delay and cancellation rates are declining, as are sickness and absentee rates after we surpassed the winter peak of COVID and flu infections.

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Qantas has always been scrutinized for its brand and premium pricing and held to higher standards than its competitors. That’s reasonable, and Qantas and its heavily targeted CEO Alan Joyce know they haven’t lived up to expectations — their own or their passengers’.

However, if the company and Joyce are to be singled out for unusually harsh and, in Joyce’s case, very personal criticism, it should at least be acknowledged – which its shareholders do four corners not – that they definitely weren’t alone.

https://www.smh.com.au/business/companies/defending-qantas-criticism-of-the-flying-kangaroo-needs-some-context-20220908-p5bgby.html?ref=rss&utm_medium=rss&utm_source=rss_business Qantas criticism needs context

Brian Lowry

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