Qantas chief Alan Joyce reveals $400m spend on customer loyalty after airline’s ‘staggering’ $1bn loss

Qantas will bring in new routes and lounges in a massive $400m splash to woo back customers amid its “staggering” loss of more than $1bn for the third year in a row. Chief executive Alan Joyce was optimistic about the big spend to return the company “back to profit and investing”, saying flights to New York via Auckland would begin by June next year. This is despite Qantas Group on Thursday posting an underlying loss of $1.89bn for the 2022 financial year. Mr Joyce said a massive labour shortfall caused by sick staff and community transmission of Covid-19 had left the company unprepared for the “rebound in travel demand” from the pandemic. “Twelve months ago, almost all of Australia’s borders were closed and most of us were stuck at home. International travel felt like a very distant prospect,” he told reporters on Thursday. “Now, our flights are full, and we can’t bring aircraft out of storage fast enough.” It comes amid ongoing pains for the beleaguered airline, including massive publicity backfires, from the Covid-19 pandemic. Big improvements to woo back customers – worth $400m – were flagged by the airline. These include changes to Qantas’ lounge network, along with several new routes to get people to the Big Apple and New Zealand. Mr Joyce said a new business lounge would be added to the existing Qantas Lounge in Adelaide along with renovations to the Chairman’s Lounge. Lounges in Port Hedland, Rockhampton and in Auckland, New Zealand will be also be upgraded. By June next year, Qantas will start flying from Auckland to New York with the 787 Dreamliner. “Customer feedback on our direct London and Rome services show how well suited our Dreamliner cabins are to longer international flights like these, which is helped by the fact we designed them with more room and fewer seats than most of our competitors,” Mr Joyce said. “We think this route will be very popular with Australians given the opportunity to connect via Auckland and it also gives New Zealanders more choice.” Qantas CEO Alan Joyce says the company will continue to pass on increased costs of fuel to customers. “It’s fair to say that we’ve seen a dramatic rise in fuel,” Mr Joyce said during a media conference on Thursday. Mr Joyce announced Qantas would set aside almost $200m for a non-executive recovery boost payment of $5000 and 1000 Qantas share rights for more than 17,000 people. Shares worth $400 million will also be bought back. Mr Joyce called it an “extremely challenging” time for the company and its customers but was optimistic with revenue intakes for leisure travel being around 125 per cent of pre-Covid levels. The grim financial year result brings Qantas’ total loss from the pandemic to $7bn. The group has posted a $25bn total loss in revenue. “Covid-19 cost us more money in the past three years than we made in the five years before that, including years of record profitability,” Mr Joyce said. Mishandled bag rates were 11 in every 1000, but that had now been reduced to six in every 1000 – almost back to pre-Covid levels. Mr Joyce was also optimistic about cancellation rates dropping to 5 per cent in August, saying that figure would also reduce to pre-Covid levels by next month. In July, the cancellation rate reached 7.5 per cent. “It’s fair to say this has been an extremely challenging time for the Qantas Group, for our people and – unfortunately – for our customers,” Mr Joyce said He said the rebound in travel led to well-publicised issues with airlines all over the world, including long queues, delayed flights and misplaced bags. “There is a lot of work happening to get Qantas back to its best,” Mr Joyce said. “Since April, we’ve hired more than 1500 people and will add more in the next few months. “Our partners – including ground handlers and airports – are recruiting as well.”