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Qantas lashed for the ‘moral blindness’ of putting profits ahead of passengers

It has been a bad week for Qantas as it scrambles to contain a growing PR disaster.

It has been a bad week for Qantas as it scrambles to contain a growing PR disaster. Photo: TND

It has been a week from hell for Qantas at the centre of a political firestorm over high airfares and poor service that has become a public relations disaster.

The airline faces the tough task of rebuilding trust with passengers after new scandals emerged through the week, including a blowout in COVID refunds, claims it was protected from competitors by the Albanese government, and a massive ACCC lawsuit.

Then on Friday, chief executive Alan Joyce was granted $10.8 million in shares for bonuses deferred during the pandemic in 2020, 2021 and 2022. He is also due for short-term bonus of up to $4.3 million and a long-term bonus of shares worth $8 million for the last financial year, the AFR reports.

The furore kicked off on Monday when Alan Joyce traded barbs with Labor Senator Tony Sheldon at a parliamentary hearing into the cost of living, which sparked revelations Qantas owed $100 million more in COVID flight refunds than was previously thought.

Qantas was then forced into a humiliating backdown over those credits, which have now had a December 2023 expiry axed as the airline scrambles to contain damage to its reputation.

As the week wore on the chorus of critics against the national carrier grew to include two former ACCC chiefs, who decried a federal government move in July to block a bid from Qatar Airways to increase its Australian capacity – a move that they argue would have delivered airfare relief.

Profits before passengers

How much? It’s impossible to say, but that the decision insulated Qantas from competition at the expense of Australian flyers has blown up in the face of the Albanese government, which faces accusations from the Opposition that it has prioritised airline profits over the flying public.

Experts also lined up to criticise the move. RMIT University Associate Professor Angel Zhong said claims that blocking Qatar’s bid was in the national interest just don’t stack up.

“Australia has one of the most concentrated airline industries in the world,” Dr Zhong said.

“I would describe it as a cost oligopoly … where a small number of airline companies dominate.

“[The recent blocking of Qatar Airlines] would have been in the national interest if Qantas was on the brink of failing … but the fact that Qantas has earned a significant amount of profit has not really convinced the public of that.”

Australian Prime Minister Anthony Albanese with Qantas CEO Alan Joyce. Photo: Getty

Prime Minister Anthony Albanese has sought to distance himself from the decision, while national president of the ALP and former treasurer Wayne Swan has suggested it be reconsidered.

Politics aside, it was current ACCC chief Gina Cass-Gotlieb who delivered the strongest blow to Qantas through a lawsuit filed on Thursday that alleges the airline sold tickets to 15,000 cancelled flights – a claim that skewers the national carrier’s touting of service improvements.

It’s the second lawsuit Qantas has been served with in as many weeks, and opens it up to what Ms Cass-Gotlieb said on Friday could be upwards of $300 million in fines (a possible record).

“We think the penalties should be in the hundreds of millions, not tens of millions for breaches,” Ms Cass-Gotlieb told ABC radio on Friday.

Reputation in tatters

All this controversy has done nothing to help Qantas’ plummeting reputation with customers.

Roy Morgan, which tracks brand trust, said on Friday that “moral blindness” had driven brands like Qantas into the gutter in the minds of Australians.

Dr Zhong said the national carrier must now work hard to change its public image under incoming chief executive Vanessa Hudson.

“She has a unique opportunity to rebuilt trust and brand reputation for Qantas on a clean slate,” Dr Zhong said.

“First, she needs to directly and publicly acknowledge the issues that damage Qantas’s reputation and public image.

“Second, Qantas’s customers and the public need to be heard. Qantas needs to seriously commit to actively listening to and engaging with its stakeholders, in particular the customers to hear their concerns, complaints, and problems.”

Topics: Qantas
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