Qantas has announced today that it will further cut its domestic flights in response to the rising cost of fuel. 

As a result, the carrier will be giving almost 20,000 employees a $5,000 one-off bonus payment to share the benefits of its later recovery. 

With every positive comes a negative 

The national carrier announced today following a market update that its net debt, which had risen to more than $6.4 billion as the company borrowed heavily to survive the pandemic, had fallen significantly to $4.0 billion. 

This boost shows positive growth in the carrier’s recovery post-pandemic and, as a result, Qantas Group employees will receive a permanent wage increase of 2% after a two-year wage freeze alongside the $5,000 one-off ‘boost’, as the carrier calls it. 

All staff are eligible for these welcome benefits apart from management and senior executives. 

Qantas Group CEO, Alan Joyce, took the time to recognise how hard the past few years have been for aviation and the fact that the carrier had promised to share the benefits of its eventual recovery:

“Today, we’re announcing a one-off payment that goes some of the way to acknowledging the sacrifices our people have made, including long periods of no work and no annual wage increases. It also recognises the great work they are doing as we restart the airline, which has been challenging for everyone.”

He continued: 

“This comes at a time when travel demand is rebounding but our people are facing a unique set of cost of living pressures, which frankly they’d be in a better position to handle if aviation hadn’t been so badly hit over the past two years. That’s now changing. We can’t afford to permanently increase salaries beyond the two per cent threshold we’ve set, but we can afford to make this one-off payment on top of the Qantas share rights we’ve already given.”

Qantas
Qantas, based in the Sydney suburb of Mascot, is the world’s third oldest operating airline. | © Getty Images

But with every silver lining, there’s a dark cloud lurking behind. 

Qantas will be cutting domestic flights on its schedule amid the school holiday period in Australia. Demand is set to rise to 83% of pre-Covid levels from today onwards as the school term ends for the winter in Victoria and Queensland. Numbers are set to rise higher as schools close a week later in New South Wales and Western Australia. 

Ahead of the holidays, Qantas thanked customers “for their patience and understanding” during what has been “a challenging restart for the industry globally.” 

This comes as Australia’s federal government confirmed that the flag carrier had the highest rate of cancellations of any domestic airline last month at 7.6%. 

Qantas has also been facing criticism for delayed baggage and poor efficiency this year. Earlier this month, Qantas apologised after its passengers were left stranded at Dallas Fort Worth International Airport for 24 hours after an engineering issue caused delays. 

Yesterday, Qantas said that it would “pull out all the stops” to ensure disruptions faced by travellers during the Easter period will not be repeated this summer. 

Qantas, like many airlines across the globe, have been struggling with staff shortages at airports. Reportedly, Qantas’ CEO Alan Joyce wrote to airport chiefs to raise the issue. 

The Aussie carrier has not announced any reductions in its international capacity. 

What do you make of Qantas’ situation? Share your thoughts with us in the comments below.

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