Qantas is still paying for its torrid pandemic years, with revelations of a huge penalty for illegal sackings showing the legacy of former boss Alan Joyce is still affecting the national carrier.

A federal court ruled this week that Qantas must pay $170,000 to three workers illegally sacked during the pandemic in a decision that is expected to lead to a much bigger compensation bill.

All told the airline could be on the hook for more than $100 million in payouts to 1700 workers who were laid off in 2020 now that Transport Workers Union (TWU) test cases have succeeded.

Matt Graham, editor at Australian Frequent Flyer, said the ruling shows Qantas is still paying for the legacy of its former chief executive Alan Joyce, who shepherded the airline through Covid-19 and then left his role just over one year ago.

Courting issues

Graham said it comes just after Qantas paid a $120 million fine over ACCC allegations that it operated so-called ‘ghost flights’, when tickets were sold despite flights being slated for cancellation.

More broadly, the compensation payout comes as Qantas attempts to turn the page on a tough few years under new chief Vanessa Hudson, who is investing in new planes and better service.

“They’ve had a lot of issues under Alan Joyce that they’re still dealing with,” Graham explained.

“They seem to be turning a new page now and going in a better direction, but there are so many little traps that have been left by the previous management.”

Transport Workers Union boss Michael Kaine said Qantas can demonstrate it has “turned over a new leaf” by making workers whole after years of fighting them in the Federal Court.

“These workers have stood by each other for four years as Qantas dragged them through the courts, and now they’ve been vindicated once again: They deserve to be compensated for the hell Qantas put them through,” Kaine said.

“Qantas must do everything in its power to ensure appropriate compensation to workers. They should not have to suffer a day longer after the last four years of anguish.”

Mediation ahead

The latest Federal Court ruling opens the door to a much wider compensation bill because the national carrier will now enter mediation with the TWU to decide payouts for other workers.

That will include assessments of “non-economic loss”, such as hardship or distress, as well as economic compensation such as lost wages, according to Justice Michael Lee’s ruling.

But while the cost for Qantas will be hefty, the ongoing reputational strain on the national carrier from cleaning up scandals from its Covid years may be a bigger thorn for new boss Hudson.

Graham explained that Qantas’ reputation has suffered greatly in recent years, with Hudson also now facing a considerable capital expenditure bill after years of under investment in new planes.

“Not only has previous management left them all these reputational issues, but Joyce has left them with a huge capital expenditure bill too,” Graham said.

“I do get the feeling that under Joyce Qantas was more interested in the short-term share price than the long term.”

Reliability concerns

Qantas is now aggressively investing in new aircraft to power international flights directly into the US and Europe under a plan unveiled by Hudson since she has taken the top job.

The airline had $21.4 billion in capital expenditure commitments by the end of the last financial year, which is up 21 per cent on the $14.6 billion in 2023, according to Qantas’ annual report.

Hudson has also unveiled investments in improved service standards and an overhaul of Qantas’ frequent flyer program that was first touted earlier this year as an olive branch to flyers.

But some of the changes are seeing Qantas increase the size of its international offering before the on-boarding of new planes, which Graham warned could stretch them thin.

“To be honest, Qantas is a little bit short of aircraft,” he said.

“With the same aircraft they’re trying to do more, and that could come back to bite them in terms of reliability.”