Still suffocating in the court of public opinion, Qantas plans to invest a further $80 million, alongside the $150m previously budgeted, in customer improvements. After losing almost $7 billion during the depths of border restrictions, last month The Qantas Group, which includes its budget arm Jetstar, announced a tremendous $2.47 billion underlying profit before tax. That proffit comes after months of investment, including $10 million in regional grants over five years, establishing a $400 million climate fund, around $340 million set aside to reward staff, a multi-million dollar improvement to inflight dining, a $100 million investment in refurbishing existing and building new lounges, and of course enormous aircraft orders totalling more than 76 jets.
Qantas tells Flight Hacks that their latest investment is directly aimed at addressing customer “pain points”. More specifically, that includes improvements to;
- Call centre training and resourcing
- The quality of inflight catering
- The number of seats that can be redeemed with Qantas Points
- Recovery support when delays and cancellations occur
- Reviewing long-standing policies for fairness
In addition, Qantas claims to be speeding up existing initiatives, such as the re-platforming of the Qantas App.
Will Qantas’ Investment Actually Takeoff?
In today’s market update, it is difficult to understand when, if at all, these initiatives will be delivered. With little clarity, I begin to wonder if this is little more than a marketing stunt. Either way, Qantas is expected to provide detail on these actions over coming weeks.
In May, then CEO Alan Joyce announced Qantas would experiment using the back door more often during boarding, as well as introducing numbered groups for domestic flights. The process is apparently underway, although I am yet to see a less-chaotic Qantas boarding gate. The reality is that the old process would have worked fine if the gate was set up properly and gate agents actually enforced priority boarding.
More recently, Qantas claims to have refreshed its First Class Lounge menu, although during our visit last week, we struggled to tell the difference. At a stretch there’s maybe three new items available. That’s not to say the Qantas’ First Lounge can’t dish up a good meal, because the food is superb. But the menu is far from brand-new.
The Red Roo also flagged a 30% increase in fuel prices since May 2023, including a 10% spike since August. That’s driven by “a combination of higher oil prices, higher refiner margins and a lower Australian dollar”. While jet fuel prices have risen recently, they are still lower than at the start of 2023, according to the global jet fuel price monitor. The jet fuel index is currently down more than 20% from mid-2022 peaks.
Despite that, The Qantas Group says their fuel bill could increase by $200 million across the 2023-2024 financial year. The good news is that Qantas will seek to “continue to absorb these higher costs” rather than passing them onto travellers as higher airfares. Although, that statement comes at a time of sky-high airfares. When compared with pre-pandemic tickets, in the six months to June 2023, the cost of a Qantas domestic flight has increased by 22.6%. The airline’s international fares are up 52.2%, while Jetstar domestic and international flights are 27.4% more expensive.
New Qantas CEO Reassures Travellers
Last week, new Qantas CEO Vanessa Hudson delivered a video message, in which she apologised to customers, saying “I know that we have let you down in many ways, and for that, I’m sorry.”
A message to customers from Qantas CEO, Vanessa Hudson. pic.twitter.com/pSjMjXnybY
— Qantas (@Qantas) September 22, 2023
“We want to get back to the national carrier that Australians can be proud of, that’s known for going above and beyond.”
“This is going to take time and I ask for your patience,” Hudson said, adding that “the work is already underway.”
Sound familiar? In August of last year, previous CEO Alan Joyce also appeared in a video message, in which he said “On behalf of the national carrier, I want to apologise, and assure you that we are working hard to get back to our best.”