Qantas has admitted to not disclosing the true value of unredeemed flight credits, during a fiery Senate committee hearing in Melbourne, after outgoing chief executive Alan Joyce was accused of “misleading the Australian public”.
Mr Joyce appeared at the Senate committee hearing into the cost of living, alongside Jetstar CEO Steph Tully and Andrew McGinnes, who is the head of the airline’s corporate affairs.
It was the first time Mr Joyce had appeared before the Senate since 2014 and came less than a week after the airline disclosed a record pre-tax profit of $2.5 billion.
Labor senator Tony Sheldon, who was the national secretary for the Transport Workers’ Union from 2006 until 2019, asked the executives for a breakdown of how many flight credits Qantas held.
“I want to start with the extraordinary revelation in the [Australian] Financial Review this morning that you’ve been misleading the Australian public about outstanding flight credits, Mr Joyce,” Senator Sheldon began.
“Last Thursday you said there are $370 million in outstanding flight credits … but what you didn’t say is that you’ve excluded Jetstar and overseas customers from the total.
“What is the total sum value of flight credits remaining across the whole Qantas group, including Jetstar and overseas customers?”
Mr McGinnes and Mr Joyce both repeatedly evaded the questioning, until the senator asked Ms Tully about the value of flight credits owed to Jetstar customers.
“Jetstar’s is around $100 million,” Ms Tully replied.
“About 50 per cent of that credit is held by people and it’s less than $100.”
Senator Sheldon then asked Mr Joyce for the value of Qantas flight credits held by international passengers, which he was unable to definitively answer.
“Is it less than $100 million?” Senator Sheldon asked.
“I think it’s less than $100 [million],” Mr Joyce replied.
Qantas staff speak out
Mr McGinnes then interrupted when Senator Sheldon asked Mr Joyce if the international flight credit value was greater than $50 million.
“We’d be reticent to play warmer-colder with this, I think we’re happy to take it on notice and come back to you,” he replied.
Senator Sheldon asked the Qantas executives again if the total of flight credits was worth more than $50 million.
“I’m honestly not sure, we can come back to you,” Mr McGiness replied.
“You’re not sure? My goodness,” Senator Sheldon fired back.
“We just learned that there’s another $100 million above the $370 million, and that could be something like $50 million for these overseas credits.
“You would have thought, coming into this hearing, that you’d be prepared for very obvious questions.”
Mr McGinness replied that Qantas had seen around $3 billion worth of flight credits refunded or redeemed.
The revelation from Ms Tully means Qantas is holding at least $470 million in flight credits, not including the amount owed to overseas customers.
Qantas has set a deadline of December 31 for outstanding flight credits to be claimed, and the executives refused to confirm whether that date would be extended.
“You’ve got to have a line in the sand at some point,” Ms Tully said in response to Nationals senator Bridget McKenzie.
“Our focus right now is to make sure Australians are using that credit or getting a refund by the end of the year.
“Our absolute goal is zero credit left by the end of December.”
A class action was lodged against Qantas last week by Echo Law for not refunding tickets for flights cancelled during the COVID-19 pandemic, claiming it was against Australian consumer law and treated its customers as “providers of over $1 billion in interest-free loans”.
Qantas has rejected the allegations.
Additional Qatar flights would cause ‘distortion’
Much of the questioning of Mr Joyce followed the decision by the federal government to block Qatar Airways from operating additional flights.
Qatar Airways requested more flights to Australia. Why did the government turn it down?
It was revealed in July that the federal government had rejected Qatar Airways’ application for 21 additional flights into Sydney, Melbourne and Brisbane per week, on top of its existing 28 weekly flights into Australia’s major airports.
On Monday, the AFR published comments from Assistant Treasurer Stephen Jones, who explained the government’s decision to block the extra Qatar flights was in the national interest and would help keep Qantas profitable.
Asked about Mr Jones’s comments, Mr Joyce replied that granting traffic rights was a bilateral exercise between countries.
“Various countries around the world protect the national interest, and I think what the [assistant] treasurer was referring to is that Australia should protect its own national interest, and that is making sure you get reciprocal or other arrangements when you grant traffic rights,” Mr Joyce said.
“I don’t think anybody would say you should grant traffic rights that would mean that you are disadvantaging the Australian national interest and I think the assistant treasurer was saying that, in our mind, and we would agree with that.”
Mr Joyce also confirmed that Qantas had sent a letter to the federal government in October 2022 about the proposal from Qatar, and said granting it would distort the market.
“We said to the government that capacity was coming back … quite rapidly in all of these markets, and that granting a carrier doubling their traffic rights in the short term would cause distortion,” Mr Joyce said.
“And then when the capacity was already coming back and the short-term needs will go on to be met anyway and that’s proven to be the case.
“A lot of capacity is being added to the market and it’s going to be significant over the next year, and that will bring down airfares quite considerably.”
No complaints over airline’s credibility
Senator Sheldon used his questions to put to Mr Joyce that Qantas was the “most complained-about company in Australia” and that the airline’s credibility had suffered under his leadership, which elicited a fiery back-and-forth between the pair.
Joyce rules out paying back COVID ‘bailout’
“Has the board made any comment about the fact that the credibility of Qantas has collapsed under your leadership?” Senator Sheldon asked.
“That’s not true, senator,” Mr Joyce replied.
“So the board has made no comment, raised no issues about the fact the company is at its lowest in the eyes of the Australian public?” Senator Sheldon asked.
“Senator, you’re making a whole series of points that are just incorrect,” Mr Joyce replied.
“The critical question is, Mr Joyce, yes or no, has the board raised with you the issues I’ve just raised about your performance and the company when it’s become the most discredited company in Australia,” Senator Sheldon pushed again.
“The board do not see it the way you’re seeing it, senator, because the facts that you’re raising are wrong,” Mr Joyce said.
‘I’m not going to comment’
Deputy chair of the committee, Greens senator Penny Allman-Payne, also asked Mr Joyce about the decision to grant Prime Minister Anthony Albanese’s son access to the exclusive Chairman’s Lounge.
Mr Joyce repeated comments that he would not comment on the Chairman’s club due to privacy issues, and would not comment on whether he had provided memberships to family members of other politicians.
“I’m not going to comment on Chairman’s Club membership. There are privacy issues where we will not comment on who’s in it, who’s been offered it, so I will not be making any comments on that, or confirming or denying it,” he said.
“I will not comment on who’s in or who isn’t in, there are privacy issues with that.”
Nationals senator Matt Canavan also asked Mr Joyce to clarify whether he had a conversation with the prime minister about the Chairman’s Lounge membership.
“Can I just clarify, you’re not denying that the prime minister had a conversation with you about Chairman’s Lounge membership for any of his family?” Senator Canavan asked.
“I’m not going into any detail, senator on what, if any, conversations with the prime minister might be about or not about,” Mr Joyce replied.
“I don’t think that’s appropriate. I never did it when Scott Morrison was prime minister, I never did it when Malcolm Turnbull was prime minister.”
(ABC)
