By BRUCE Piper
I could barely believe my eyes last week at Qantas’ reaction to an Australian Competition and Consumer Commission report into the aviation sector.
The wide-ranging coverage of Australia’s airlines and airports noted the distress everyone had been under due to COVID-19, with ACCC Chair Rod Sims citing “concerns from some airlines that airports may seek to significantly increase charges to airlines in order to recover lost profits from the pandemic”.
Warning airport operators not to take advantage of the situation, Sims said higher costs “could limit an already vulnerable sector’s ability to recover, and impact on both consumers and the economy”.
Qantas chief Joyce weighed in, pontificating that airports are only able to lift their prices because they are “unregulated monopolies…there’s nothing really stopping them charging whatever they like”.
By contrast, he insisted “we can’t say to our passengers ‘we’ve lost $20 billion in revenue due to COVID so we are going to increase airfares accordingly to recover our losses’ because it’s highly competitive between airlines – and it’s not the right thing to do,” with Joyce seemingly blissfully unaware of the irony, since Qantas had done exactly that to travel agents by unilaterally cutting commission.
Back in May this year, Qantas Executive Manager of Global Sales & Distribution, Igor Kwiatikowski, tried to justify the carrier’s position on the cuts, telling travelBulletin “like all airlines, Qantas is working to recover from the biggest crisis our industry has ever faced”.
“Maintaining the status quo around our commission structure is no longer viable and the changes we’re making form part of the work under way right across the business to reduce our costs by $1 billion a year.
“Given the billions of dollars of extra debt and lost revenue due to COVID, these cost reductions are central to our recovery plan,” he said.
Joyce’s comments about airports using their strong position to raise charges should ring pretty hollow in the ears of QF’s thousands of third party distributors whose survival is threatened by commission cuts.
As the QF CEO blithely noted, changing commercial arrangements to recover COVID-related losses is simply “not the right thing to do”.