For 30 years Tom has piloted Qantas planes all over the world and as one of the airline's most senior captains, it's been a dream career.
After being stood down at the peak of Australia's COVID lockout, Tom was thrilled when the call came to head back to the cockpit.
But it became quickly apparent that things were not the same.
The support staff and almost seamless flow of updates that pilots like Tom had come to expect was missing, he says.
"There is no one to talk to and when you go to work you are basically on your own. It's like we're running a virtual airline," says Tom, a pseudonym. "In my three decades with Qantas I've never seen anything like it."
Earlier this year Tom piloted an international flight out of Australia with a hunch take-off might be delayed. The queue to pass through security was long.
When he got to the aircraft, he learned drinking water was yet to be delivered and the load sheet had not been finalised – a document that explains how much weight the plane is carrying and how it's distributed. So far, so normal.
Time passed. The passengers boarded and Tom – believing the load sheet must be moments away – hit the plane's intercom: "We're just waiting on a final bit of paper-work and we will be on our way," he said.
Tom and his co-pilot waited. And waited. They tried calling what Tom calls the "nerve centre" – a Qantas employee contactable on a radio frequency whose job is to update pilots on any queries. No answer.
Then unexpectedly, the engineers called. "We're opening the cargo doors. Another 15 containers have just turned up and none of the bags have been loaded," Tom was told.
Next, the water delivery team admitted that in fact they had run out of potable water, and could not estimate when it would arrive.
By now – with passengers buckled up and ready for take-off – Tom was looking at a lengthy delay with no one to explain how such fundamental requirements like loading water and baggage had gone wrong.
"It feels like a rudderless ship at the moment," he says. "Keeping to departure times has always been sacred in the airline industry. In the past we would be kept informed – you will be 10 minutes late, 15 minutes late. Now you must pursue the information yourself and they may, or may not, know the answer."
The tussle for priority as the Qantas brand suffers
Post-COVID aviation has been a turbulent experience for Qantas employees – facing lay-offs, industrial disputes and understaffing. Things have been difficult for passengers, too, with the latest figures showing travel disruptions worsening from one-in-13 flights cancelled during May, to one-in-12 in June.
Overall the performance of Australian airlines was at its worst since records began last month, but unfortunately Qantas was one of the lowest performers with only 58.4 per cent of flights departing on time and 59.1 arriving on schedule.The best performer, Rex Airlines, had 82.7 per cent of flights depart on time, and 80 per cent on-time arrivals.
Meanwhile, Qantas management is juggling crippling jet fuel prices, a tight labour market and COVID illness stalking those staff who do make it on shift.
Yet many observers are demanding Qantas define its priorities.
The airline faces three key interrelated responsibilities:
- The business bottom line and protecting board members and shareholders;
- The rights of customers and employees;
- And the preservation of the airline’s precious brand and safety record.
Experts are questioning at what point the tussle between these demands may start to implode.
It's not the first time Qantas's business struggles have been laid bare and questions raised over its management and business model.
Yet the airline has always bounced back.
Is this time different?
How two WWI vets built a global brand
Qantas has built a phenomenal brand since 1920 when two World War I veterans dreamed up an air service that could connect remote Queensland and the Northern Territory, founding the Queensland and Northern Territory Air Service in the process.
In the subsequent years Qantas has become synonymous with Australia and connected us to the world.
But it's not just pilots like Tom who expect a lot from Qantas: Most Aussies hold the national carrier in high esteem, too.
Many Australians have felt a twinge of pride at that scene from the movie Rain Man when Dustin Hoffman's character insists to Tom Cruise that the pair can't fly unless they fly Qantas because "Qantas never crashed"; or teared up on the way home after a trip overseas when I Still Call Australia Home belts out as kangaroos in silhouette, or synchronised dancers, are filmed on our wide brown land.
As flights are cancelled or delayed at an unprecedented rate; baggage goes missing and calls for help are placed in a (very long) queue, social media has been alight with posts from unhappy customers, some declaring they will never fly Qantas again and others calling for CEO Alan Joyce to be sacked.
Management is battling staff over wages and conditions
In parallel, Qantas management is by all accounts at war with swathes of its staff.
Many employees are feeling bruised. Pandemic lay-offs have been swapped for operational glitches as business ramps up with an often unstable workforce and industrial relations tensions play out among key staff including baggage handlers, engineers and pilots.
Up to 9,000 staff were laid off during the pandemic with some of those positions, such as baggage handlers, hired back as outsourced labour.
Last month the airline lost an appeal against a decision in the Federal Court that found the outsourcing of 2,000 ground crew was illegal. The case is headed to the High Court for another legal round.
And now, tension is building with Qantas aircraft engineers – who underpin that Hollywood-famous safety record that is also so precious to the bottom line – with imminent plans to strike over unmet demands for improved wages and conditions.
All this comes not long after tensions with pilots over how they would be paid to fly ultra-long-haul planes as part of the so-called Project Sunrise taking passengers non-stop from Australia to Europe, or New York.
Qantas management has also faced tough negotiations with pilots over new short-haul domestic aircraft due to be delivered from 2024 as part of Project Winton. The pilots' union claims its members were threatened with outsourcing if they did not agree to the deal.
The kicker is that against this background of unhappy customers and staff, Qantas has pocketed $2 billion in taxpayer-funded COVID payments and signed off giant EOFY performance bonuses to executives worth around $1 million each, to be paid in stocks in August next year following a period of cutbacks to executive pay. Up to 17,000 other Qantas staff will also be eligible for share rights worth just $5,500, paid out only to those who agree to wage and employment conditions.
As engineers argue for a 12 per cent wage rise split across four years, it is a scenario the Transport Workers Union has described as a "sickening betrayal".
'We're getting close to the tipping point'
Greg Bamber, a professor at Monash University and co-author of a book on how airlines can improve performance by engaging their employees, is blunt when assessing Qantas’s current problems.
"It's a debacle. Some would say we're getting close to the tipping point," he believes. "On the one hand Qantas advertises itself as being a full-service airline that gives premier service to its loyal and long-term frequent flyers. On the other, Qantas is giving priority to a different set of stakeholders – trying to maximise profits and prioritise the interests of shareholders and executives at the expense of its staff and its customers."
Qantas has been through its share of difficulties in the past – the 2011 industrial disputes that led to the grounding of the fleet and 2014's shock $2.8 billion loss, then the worst in its history – are notable examples.
Through it all CEO Alan Joyce has been hailed as a tough but talented leader, "probably one of Australia's best", says market strategist Henry Jennings.
"He was always tough on the unions and tough on the workforce and getting costs down but the market liked that and he did seem to be fair as well as tough," says Jennings.
How much of these current troubles could – or should – the airline have foreseen and avoided?
For Tony Webber, an aviation sector analyst and former chief economist at Qantas, the airline’s woes stop with Joyce, no matter the cause.
"I think he's like the coach of a football team. The ultimate responsibility for the performance lies with the coach and he's the type of person who will make hard decisions," Webber says, noting the 2011 grounding of the fleet.
The perfect storm – COVID, fuel prices and a tight labour market
There's no question that the aviation industry has suffered through the COVID pandemic with its entire business model abruptly shut down without warning or negotiation.
And now, just as restrictions on air travel have loosened and people are keen to fly again, a new raft of troubles has landed creating a complex business environment for an industry that works on tight margins even in the best of times.
"Airlines are struggling around the world and the aviation industry is in chaos. This is more of a perfect storm than [previous difficulties that have faced Qantas] because we've got things happening at the same time," says Bamber, noting the war in Ukraine which is pushing up fuel prices and forcing route changes which in turn increase fuel burn.
Jet fuel prices are notoriously unstable, but to give an indication of the price dilemma facing Qantas consider that in January 2020, just before COVID was set to shock the industry, jet fuel was trading at $2.59 a gallon before bottoming out at $0.96 in April when the reality of the pandemic's impact on air travel set in.
The latest figures from June this year saw aviation fuel at $5.86 per gallon.
When contacted for this article, a Qantas spokesperson was quick to double down on this theme, distancing Qantas from specific responsibility and pointing out that the airline's troubles are not unique: The post-COVID operating environment "has really hit us, and when I say 'us' I mean global aviation", the spokesperson said.
But Qantas did not answer specific questions about the experience of pilot Tom or the impact of executive bonuses on a workforce struggling with morale.
In London, Heathrow airport has capped the numbers of international flights it will handle in order to juggle its own service delivery problems. But this decision means more disruption and delays for Qantas passengers.
Andrew David, the chief executive officer of Qantas domestic and international, is the public face of these business woes.
In an interview with Perth radio station 6PR David admitted the airline is "not delivering the kind of performance that we were delivering pre-COVID", adding "unfortunately, we don't have a magic wand that we can instantly address [the impact of COVID]."
It was hardly a reassuring message for stranded passengers.
In an opinion piece published on the Qantas website this month, David lay blame on the complexity of restarting a major airline after a long grounding, alongside the current surge in COVID cases impacting the labour force.
"We are working hard to proactively manage this challenge," he wrote, pointing out efforts to employ 1000 new staff, boost stand-by rostering, use bigger aircraft and increase support staff at airports and call centres. "As a result of making some very difficult decisions, we've been able to weather the storm," he says, arguing the most recent statistics show bag loss is now only slightly more common than pre-COVID and call wait times have fallen to "minutes".
However social media posts from Qantas customers continue to tell a different story, with complaints about service and wait times ongoing.
What about the brand?
The risk, of course, is whether the Qantas brand will be damaged by the time that storm passes.
Hamish McLean, a crisis communication expert from Griffith University, argues Qantas's image will take a hit in the eyes of customers unless the company "owns the problem", notwithstanding the fact that many of the variables are global and out of Qantas's direct control.
"A fundamental part of protecting your brand is that people want to see that you're saying "yes, this is our problem"," he says. "It might be due to factors globally. But really, it comes down to the organisation and how they are managing the problem."
It is this sense of being left in the lurch — not knowing — that has repeatedly been mentioned by passengers stranded at airports without updates, as well as pilots like Tom waiting for authority to take off.
McLean emphasises the need for Qantas to show it can be relied upon. "It must be embedded in everything they do because that's what the public expects of the Qantas brand," he says.
Bamber wonders if Qantas is placing too much faith in its power in the market. Qantas holds a dominant position in Australia, he says.
Unlike, say, Europe where travellers have a wider choice of airlines and can also travel on high-speed rail or motorways if air travel isn't delivering, Qantas "is a giant in the Australian market".
"It uses its power and strength in relation to its customers, its workforce and some of its other stakeholders," Bamber says.
Bamber also criticises the way the previous Australian government handed out COVID payments to big businesses like Qantas without requiring anything in return. He points to the US where pandemic payments were not to be used for executive bonuses or share buy-back schemes. Other countries took an equity stake in airlines in return for pandemic support.
"After receiving COVID payments Qantas responded by outsourcing jobs and by paying generous benefits to its senior executives. That was not a good look," Bamber argues.
So, what has all this done to the Qantas share price?
Our connection with the quality of the Qantas brand, and the fact that when most people fly it is an important occasion – travelling for work, to visit family and friends, or a long-planned holiday for example – means many of us have an emotional relationship with the airline, demanding something almost unquantifiable from the interaction.
Yet the share market is "a pretty unsentimental beast", says market strategist Jennings, pointing out that Qantas's share price remains volatile. On Friday, Qantas shares closed at $4.51. Over the past 52 weeks shares have traded from a high of $5.97 to a low of $4.20.
Jennings argues that while CEO Joyce has been successful in "keeping Qantas alive during a very difficult period", his purchase of a new $19 million home, and Qantas's largest-ever order for new planes, hitting the news "at the same time passengers are tearing their hair out … is certainly not a good look".
Yet he believes the most significant force driving that share price fall is the price of oil.
"One of the things Qantas can't control right now is the oil price exposure it has going forward," he says, explaining that strategies to offset that price risk are harder and harder to manage. "Some of those prices get passed on as we've seen with Sydney-to-Melbourne flights costing $900."
Rewind to last year as COVID vaccines became widely available, people began booking flights and travel was back on. Travel stocks and airlines like Qantas were "the easy trade", Jennings says.
The latest market update from the end of June "pointed out what we all knew," he says.
Qantas faced problems setting pricing for flights in the face of higher costs, as well as problems with public sentiment because of the bad image it is projecting as a result of operational issues.
"It's hard to shake that off," Jennings says.
But he maintains the oil price is the key to improving the share price.
If it falls into a more typical range "Qantas shares will be back up to five bucks without question and all the sentiment around image would dissipate because that headwind that they're facing would vanish," Jennings believes.
Does anyone want to work in aviation any more?
But the problem of reviving staffing levels may not be so easily fixed, aviation analyst Webber says, and COVID illness is not the only reason.
Employees are less willing to take on an airline career and “COVID sent many over the edge”. Of the thousands laid off during the pandemic, many are just not willing to return to the sector, he believes.
Even the coveted piloting roles are less attractive to some, Webber says, citing a friend who swapped flying planes for driving trucks during the pandemic and never looked back.
“The airline industry is very, very competitive with very thin margins. Aviation is deeply affected by wars, terrorism, ash clouds from a volcanic eruption, earthquakes, viruses and volatile jet fuel prices. So many things which seem to occur fairly regularly and can ruin the business,” he says. “This affects the security of employment, particularly back-office labour, and people are just sick of it.”
Just like the pilot who became a truckie, many Qantas employees easily find work in other sectors: "They have always had mobile skill sets," Webber says. "Someone working in treasury risk management can go and work for an investment bank. Someone working in yield and revenue management can work for a hotel."
But this dilemma didn't just begin with COVID. Webber points out that cuts to non-operational labour gained speed after 2014's monster loss as management looked for cost savings. The scale of the staffing problems being experienced now have built up over time and been supercharged by COVID when Qantas was quick to stand-down staff and outsource jobs, but slow to re-recruit and train replacements.
The two questions consumers want answered: Will ticket prices or safety be affected?
Aside from the capacity problems plaguing Qantas and emerging as delays, cancellations, lost baggage and telephone wait times, the issue of ticket prices is a looming problem for travellers that Webber believes will not go away quickly, particularly on high-demand routes where Qantas is the dominant carrier.
The Qantas business model has used its domestic routes to compensate for slim margins in the international portion of the business, Webber says, pointing out that pre-COVID fares were probably lower than they were a decade or two ago.
But leaps in jet fuel costs means going forward, domestic profits will be harder to maintain.
"You've got to take capacity out of the market," he says, noting CEO Joyce's announcement of a reduction in flight numbers on high-frequency routes of at least 10 per cent between now and March next year. "It means fewer flights with empty seats and every seat will cost more."
Some customers are likely to respond by withdrawing from international travel altogether and instead holiday at home or use a cheaper airline.
"We call it trading down," Webber says.
Some have raised concern that cutbacks, new and less-experienced staff, outsourced jobs and COVID illness creating operational pressures, will impact Qantas's precious safety record.
The good news is that the answer is it almost certainly will not.
Thursday's mayday call from a Qantas plane running low on fuel on a Brisbane-to-Perth flight might raise concern but Webber argues the airline's safety record will never knowingly be compromised.
"They realise that if they have a safety incident then that could completely destroy their business," he says.
Pilot Tom agrees, explaining Qantas's layers and layers of safety protocols means that if one fails the next one is designed to catch the problem before it becomes catastrophic.
Unfortunately for passengers, ongoing cancellations may be one method used to shore up safety, Webber believes.
"If they have a shortage of operational labour to run those flights — if cabin crew or pilots are sick for example — they will just cancel them," he believes.
He is confident Qantas will continue to attract "the best pilots in the world". Qantas's renowned training program and strategies to select the most suitable pilot trainees remains strong.
"I know that there's still a lot of good smart kids in the system that are willing to become pilots and they all want to work for Qantas," says Webber who teaches in the UNSW aviation program and sees some of those aspiring pilots up close.
Perhaps the core question remaining is if COVID had never happened would Qantas be attracting criticism for its failings right now?
"I'd say no," says Webber. "Even if the war in Ukraine had happened, that just impacts the oil price. It wouldn't have disrupted operations, the ability to service aircraft or perform ground handling activities and engineering activities. None of that would have been affected."
Yet Webber believes Qantas is wrong to focus on this loophole when it comes to explaining to customers why their flights are cancelled or they are stranded in foreign airports.
"Qantas has to respond to these things. That's within their control," he says. "They have to find a solution. They have to manage those problems. They have to show leadership. The way they respond to these things is what we must call into question."
