Now that travel restrictions hare eased Alan Joyce could borrow one of George Constanza famous lines in Seinfeld “We are back baby. We are back”. Qantas expects to be operating at 90-100 per cent of its pre-COVID domestic flight capacity by June with international traffic (resuming to Covid safe destinations) at 44%. However, there are lots of headwinds for Qantas to face over the next few months. Restarting an airline to bring aircraft and staff back into service is a complex process.
With flying resuming there is now lots of maintenance required to get the aircraft back in the sky. Engineers need to replace each of the jet’s wheels and brakes while emergency equipment like oxygen bottles and fire extinguishers are replaced. The engineers must also do engine runs, landing cycles and test flights.
Intensive training is needed for pilots to get them back into the cockpit. This involves simulation time, classrooms, online tutorials, and test flights.
Staffing is now a critical issue for Qantas as the airline prepares to grow again. White-collar workers and non-airline staff are becoming increasingly hard to come by. Technology workers, human resource, management, and legal specialists have been lured away to other companies after being stood down during the pandemic.
Another challenge for Qantas is to remain tough in its EBA negotiations with the unions as it seeks to reduce its annual costs by $1 billion. The airline has stipulated new enterprise agreements will include a two-year wage freeze, and a 2 per cent annual increase thereafter, down from 3 per cent before the COVID-19 pandemic. Qantas cabin crew have just voted in favour of such a new work agreement but only after being threatened with severe cuts to pay and conditions if they did not support it. The airline for the first time in its history went to the Fair Work Commission to terminate its enterprise deal for long-haul flight crew and shunt them onto the award until a new agreement was reached.
The Russian invasion of Ukraine is a huge headache for Qantas. The airline has been forced to use alternative flight path for some of its routes to avoid Russian airspace increasing flight times. The war has sent oil prices soaring to highest level in a decade. Fuel is one of Qantas’ biggest costs about 25 per cent of airlines’ expenditure. Qantas has flagged a period of higher air fares to claw back these rising costs.
The last big challenge for Qantas is its succession plan for when long serving Alan Joyce retires. He has admitted that the Covid-19 pandemic would be the “last crisis” he steered the airline through. Talk of Joyce’s departure has sent serious jitters through the organisation. Qantas has a history of appointing CEO’s from within and there is now internal jockeying at the airline to replace him.
Source: Qantas flags higher airfares as Ukraine war sends oil soaring by Angus Whitey Bloomberg News March 7th, Qantas hoses down jostling for Alan Joyce’s job by Robyn Ironside The Australian March 11th, Qantas long-haul cabin crew vote to get new deal to avoid pay cuts by Robyn Ironside The Australian March 14th