Alan Joyce has been the chief executive of Qantas since 2008. I spoke to him on Friday morning.
Fitz: Alan, welcome aboard. Most of us are glad to be flying again. But we can’t help but notice the staggering cost of flights right now. Why is that?
AJ: The ACCC does a report each quarter on the aviation industry, and they’re saying that air fares are around 27 per cent higher in October this year than in October in 2019, pre-COVID. A big driver of the price increase is fuel. We’ve paid $5 billion for fuel this year which is the biggest fuel bill we’ve ever had. Secondly, demand is bigger than supply. It’s at unbelievable levels internationally and domestically because people were locked up for so long and everybody was surprised at how rapidly demand rebounded to be excess of what it was in 2019. And supply is difficult because, like every airline, it’s been hard getting those aircraft back in the air and the combination means that air fares are higher.
Qantas chief executive Alan Joyce.Credit:Janie Barrett
Fitz: I gather getting the planes back out of the Mojave Desert, where they had been mothballed, was not simply a matter of finding the keys, getting some jumper leads on the batteries and starting them up again?
AJ: Yeah. You have to do 4000 hours of maintenance just to “wake the aircraft” up. You replace all the tyres on the aircraft, the brakes on it, you’ve got these engine tests. And before they come back into service, most of them are due for a three-month maintenance check. And of course every maintenance facility in the world is chockablock, so there’s a big backlog.
Fitz: When could you see prices and availability returning to pre-COVID levels?
AJ: Airbus and Boeing are telling us the supply chain issues should be fixed by the end of next year, which will get more planes in the air and air fares will come down as a consequence of that. But the fuel price issue remains and nobody knows what’s going to happen with things like the war in Ukraine, so it’s hard to know whether fuel prices will come back to 2019 levels. If they do, and you have the capacity getting back in line with demand, you’ll have air fares significantly coming down.
Fitz: In the meantime, with your profit expectations and your shares up 22 per cent from where they were 12 months ago . . . the unions have been bitterly critical of Qantas outsourcing baggage handlers, just as they remain critical of the 2000 Qantas employees who were unlawfully stood down during COVID. There’s a strong feeling that Qantas management is not sharing the current largesse with its workers.
Qantas boss Alan Joyce explains why your Christmas airfares are sky high
Alan Joyce has been the chief executive of Qantas since 2008. I spoke to him on Friday morning.
Fitz: Alan, welcome aboard. Most of us are glad to be flying again. But we can’t help but notice the staggering cost of flights right now. Why is that?
AJ: The ACCC does a report each quarter on the aviation industry, and they’re saying that air fares are around 27 per cent higher in October this year than in October in 2019, pre-COVID. A big driver of the price increase is fuel. We’ve paid $5 billion for fuel this year which is the biggest fuel bill we’ve ever had. Secondly, demand is bigger than supply. It’s at unbelievable levels........
© The Sydney Morning Herald
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