Qantas dips into profits to lift service, flags fuel cost blowout
Qantas says it will spend at least an additional $80 million fixing services issues at the same time that fuel costs have risen $200 million, the first hit to profits as it attempts to repair its deteriorating relationship with customers.
The airline said in an ASX statement that the spending on new initiatives would reach $230 million this financial year. The details of the spending come after Qantas chief executive Vanessa Hudson flagged the company would consider bringing call centres back to Australia, opening up more frequent flier seats, and making other changes to rebuild its reputation.
While investors have benefited from a surge in airline profits as demand for travel increased following the COVID-19 pandemic, disquiet is growing at how much Qantas will have to spend to retain customers and to deal with a series of regulatory and legal issues which accumulated under its former chief executive, Alan Joyce. Mr Joyce left two months before he was due to depart, handing over to Ms Hudson earlier this month.
Totus Capital portfolio manager Ben McGarry told The Australian Financial Review last month that Qantas had a “sniff of AMP” to it, a reference to years of regulatory scrutiny, higher costs and brand damage affecting the one-time financial services giant after a decade of strong profits ended.
Qantas chief executive Vanessa Hudson Edwina Pickles
On Monday, Qantas told investors that the additional spending was “aimed at addressing a number of customer pain points”.
The airline said the funding would be directed toward “better contact centre resourcing and training, an increase in the number seats that can be redeemed with Frequent Flyer points, more generous recovery support when operational issues arise, a
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