Qantas chief executive Alan Joyce has described how the national carrier’s $2 billion cost cutting program seeks to strike a balance with its premium airline image and capabilities.
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Qantas chief executive Alan Joyce has described how the national carrier’s $2 billion cost cutting program seeks to strike a balance with its premium airline image and capabilities.
Speaking at a Chamber of Commerce and Industry WA event today, Mr Joyce said the airline also remained committed to changing regulations to allow increased foreign investment.
The Coalition has pushed through changes in the House of Representatives to relax the Qantas Sale Act’s mandate that 51 per cent of the carrier remain domestically owned, but the bill faces obstacles in the new Senate.
Mr Joyce said Qantas was in discussions with all parties and independents in the Senate.
“There’s obviously a better chance with the new senate...because the Labor party and the Greens are very clear on their view that they won’t support a change to the 49 per cent ownership cap,” Mr Joyce said.
“We’ll continue to have dialogue with everybody about the reasons for it and the need for it and what needs to happen,” he said.
Mr Joyce said Qantas was challenged by increasing competition from international carriers entering the Australian market, Virgin Australia adding capacity to detract from Qantas’s 65 per cent domestic market share, and record high fuel prices.
He estimated Qantas’s fuel bill to be $4.6 billion this year, making it the airline’s biggest cost.
“One of the things we’re out explaining is ... Qantas can take $2 billion of costs out and improve its customer rankings and improve the service we’re delivering and improve what we’re putting in,” Mr Joyce said.
Mr Joyce said using new technology, new aircraft and overseas maintenance had produced significant savings.
Despite mass redundancies, Mr Joyce said employees were very engaged with the business and particular attention was paid on improving customer service and being more efficient.
“Our employees get it. They realise that we do have a cost problem,” Mr Joyce said.
“Productivity is bigger than wages and rates....the IR requirement is one part of that, but it’s not the be all and end all, there’s a lot of other things that we have to do.”
He said Qantas was committed to providing value through its frequent flyer program, improved lounges, its flight network and maintaining on time performance.
In WA, he said visible improvements would include lie flat beds in business class domestic flights to and from Perth which could be reclined even during take-off and landing, upgraded lounge facilities in Perth and a new lounge in Broome.
“Our upgraded A330 aircraft will service the east-west domestic market. We believe that Qantas customers flying between Perth and the east coast will get the best domestic airline experience in the world on these aircraft,” he said.