Qantas boss Alan Joyce has been summoned to a parliamentary inquiry for the first time in nine years, where he’ll be subject to questions about the group’s role in affecting cost of living pressures.
Joyce will appear before the Senate Select Committee on the cost of living on Monday, days after revealing what’s expected to be a record profit for his final year at the helm of Australia’s biggest airline.
Although it is customary for chief executives of ASX listed companies to regularly appear before the Senate, grocery wholesaler Metcash’s boss Scott Marshall is the only leader of a listed company to have fronted this inquiry so far. A formal summons issued for a chief executive is unusual given they are not a public officeholder.
Qantas’ rival airline Virgin Australia was represented at this inquiry by its head of corporate affairs, Christian Bennett, and head of government relations, Todd Reynolds. Companies including Coles and Woolworths have also sent executives in similar positions.
Joyce has not personally appeared before the Senate since 2014, when he defended the business’ decision to axe 5000 jobs as critical to the future of the business.
A Qantas spokesman said the airline had been initially invited to nominate relevant executives to attend the inquiry but was subsequently asked to send Joyce.
“Despite no other company CEO being required to attend, the committee subsequently insisted that Qantas CEO Alan Joyce appear, which he will do,” the spokesman said.
Senator Tony Sheldon, who has long been critical of Joyce and formerly held senior positions within the Transport Workers Union, said the airline had changed for the worse under Joyce’s leadership, and it was about time he was held to account.
“After almost a decade of evading parliamentary scrutiny, even while receiving a $2.7 billion no-strings-attached bailout from the Morrison government, Joyce has a lot to answer for.”
“Qantas has transformed from an aviation pioneer into a pioneer of corporate greed, extracting every last cent possible from its workers, its customers and even the previous federal government,” Sheldon said.
The airline was on Wednesday again accused of deliberately cancelling flights between key capital cities to stifle competition, with airport leaders calling for reform to airport slot regulation.
Qantas cancelled 12 per cent of flights from Canberra to Sydney in July – three times as many flights as rival Virgin Australia, which uses Link Airways aircraft and crew, on the same route last month.
Sydney Airport executive general manager Rob Wood – who formerly worked at Virgin and Qantas – told a House of Representatives inquiry on Wednesday that the two major airlines hide behind weather and air-traffic control issues to justify flight cancellations, but were clearly also motivated by preventing new entrants access to the airport.
Qantas has repeatedly rejected accusations that it hoards slots. The airline says that in the event it is forced to cancel a flight, it determines where a cancellation is least likely to cause passenger disruption.
Andrew David, chief executive of Qantas domestic, said last month: “The claim that Qantas is hoarding slots at Sydney airport is simply wrong.
“It’s a use-it-or-lose-it system with a buffer for operational issues that you’d expect when you’re getting planes in the sky with all sorts of weather and runway restrictions, and that’s no different from many airports around the world.”
Qantas will reveal what’s expected to be record profits for the 2023 financial year on Thursday.
Sydney to Canberra and Melbourne to Sydney are high-frequency routes, which means passengers are less likely to experience a long delay in the event their flight is cancelled.
All up, 53 flights by the airline were cancelled on the route during July – about 45 per cent more than the second-most cancelled service, Melbourne to Sydney. This is despite Qantas’ overall cancellation rate being lower than Virgin’s for the bulk of this year.
In addition to unrelated disruptions caused by a lack of air traffic controllers or weather, airlines are often limited by staffing or aircraft constraints which means they cannot always fulfil their schedules.
Sydney Airport would benefit from more airlines gaining access to its slots, as it would be able to generate additional income through airport fees.
“There’s no doubt that anticompetitive behaviour comes at a cost to us. It also costs the travelling public and other airlines at a time when everyone is feeling the pinch of higher cost of living,” Wood said.
A 2019 productivity commission inquiry explored the issue of slot hoarding in detail. The inquiry led to a review of Sydney Airport and its complicated governing legislation, dubbed the Harris review.
The review recommended that the government introduce a stronger compliance regime and an overhaul of Sydney Airport’s outdated regulation, but its recommendations are yet to be implemented.
Wood said it was undeniable the cancellation rate on key city routes in and out of Sydney was increasing, irrespective of weather and air traffic control related issues. He also said it was obvious cancelling high-frequency routes caused less disruption than less-busy services, but it was inefficient, meaning other airlines should be given the option to fly them.
Canberra Airport’s chief executive officer Stephen Byron said Qantas’ treatment of Canberra passengers flying into Sydney Airport was a “national disgrace”. He called on the federal government to consider a formal “show cause” process, which would require airlines to relinquish unused slots at airports where their cancellation rate exceeds 10 per cent.
“There needs to be some proper accountability here for an airline that makes more than 80 per cent of the profit in the entire domestic industry and yet treats its customers and the Australian government like mugs,” Byron said in an interview on Wednesday.
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