The Qantas chief executive, Alan Joyce, has offered workers at the embattled airline a pay rise and pledged to spend more money on increasing the reliability of flights, while denying the company has a staff morale problem or that its brand has been permanently damaged.
Delivering a financial update on Thursday, Joyce predicted an underlying profit before tax – a management measure that excludes costs such as asset write-downs and foreign exchange hedges – of between $1.2bn and $1.3bn for the six months to the end of the calendar year.
The airline has been the target of customer anger over the past few months due to a spate of missing bags as well as delayed and cancelled flights on its mainline brand and budget subsidiary Jetstar.
It is also locked in a rolling battle over pay, conditions and safety with unions that represent staff at the airline and companies to which it has outsourced ground services – a move the federal court found was illegal. Qantas is appealing against the decision.
Joyce said on Thursday that on-time performance had improved over the past few months and, after taking a hit due to “extreme weather events” last month, had so far this month hit the company’s target of 75%.
If delivered as expected, the $1.2bn to $1.3bn underlying profit will be the airline’s first half-year profit after two-and-a-half years of losses during the pandemic that has seen Qantas run up losses totalling $7bn.
Joyce said Qantas will spend an additional $200m this year increasing capacity at the airline, including by having additional staff ready to cover people off with Covid and keeping planes idle to cope with outages.
The airline has also increased its pay offer from 2% to 3% a year – still short of galloping inflation that the Reserve Bank of Australia predicted will hit 7.75% this year.
Joyce said he was confident many staff would also receive a $10,000 bonus this year because the airline was likely to swing back into profit after running up billions of dollars in losses due to the pandemic.
“For a lot of our employees that’s well over 10% this year,” he said. He denied the airline’s workforce was unhappy with the company.
“Are there one or two union leaders that have a grudge against Qantas? Absolutely,” the chief executive said. “Are they creating a lot of noise? Absolutely. But don’t misinterpret that as a general feeling across the company because that is not right and not appropriate.”
Joyce said the feedback he was getting from his workers was “a huge thank you to the management of Qantas for getting the company through the Covid period”.
Asked if he should bring forward his retirement, Joyce, who has been chief executive of the airline for 14 years, said: “There’s no change to my plans.”
Qantas is in dispute with cabin crew represented by the Flight Attendant’s Association of Australia (FAAA), which is threatening industrial action because the company wants to increase the maximum allowable shift times and reduce the minimum time between shifts.
Joyce said the union’s position was “irrational and inappropriate and not fair for this airline” because it had struck deals with the same conditions at competitor airlines Virgin and Rex. Sources said the FAAA now regrets making those agreements.
Joyce admitted the Qantas brand had taken a hit from its woes in recent months but said the public perception was improving and denied it had been permanently damaged.
“If the Qantas brand was damaged, you wouldn’t see these results,” he said.
Joyce said other airlines had experienced the same problems.
“Is it good enough? No,” he said. “Do we have a higher bar for Qantas than for other airlines out there? Absolutely.”
