AFR Article - Joe Aston goes BAM!

[ozziflyer]

Having travelled many of the peers this year - I feel like everyone in that field is largely similar in hard and soft product to be honest. Just a bad state in the airline industry if your not the ME3 or Singapore (which are not peers imo).

 

[RooFlyer]

Aston goes BAM! again

Alan Joyce’s lines aren’t landing any more

In 126 days, Qantas is set to legally steal approximately half a billion dollars from its customers.

www.afr.com

Some wonderful skewering (to put it mildly) of some common "misconceptions" (to put it politely). This is just a small sample:

“We were 11 weeks from bankruptcy,” he claimed anew. This is another raging falsehood. When COVID-19 hit in March 2020, Qantas had almost $2 billion in cash and $5 billion in unencumbered assets it could borrow against. The capital markets were open, so Joyce could issue equity or raise debt (he did both, as well as begging money off the government). The idea that Qantas was ever facing liquidation is sheer make-believe.

Saying “11 weeks” also gilds it with the hint of precision, which makes the lie sound credible. If Qantas was truly 77 days from extinction, where was that warning in its market announcements of the day? Actually, Joyce told the ASX on March 10, 2020, “We’re in a good position to ride this out.”

and

Qantas even asserted that “in inflation adjusted terms … international fares are [now] 10 per cent higher [than pre-COVID].” Inflation adjusted! Do Qantas customers get to pay the inflation-adjusted price in Alan’s magical world?

Unverifiable figures
Qantas international fares (or revenue per kilometre flown) over the past six months are up 52 per cent versus 2019, yet in the same period, Australia’s coughulative inflation was 16 per cent. That’s a 36 per cent increase in inflation-adjusted terms, so how does Qantas get 10 per cent? By using unreleased, unverifiable figures limited to the fourth quarter, it turns out.

and (I couldn't help bolding a bit)

But Joyce reserved his biggest deception for his portrayal of the great Qantas flight credit racket. “What we’ve now done is we’ve put a dedicated concierge line in. The call centre now, yesterday, was three minutes to get through and there’s a dedicated set of experts that can help you get your credits. We recognise that … we didn’t get it right and we needed to fix it and the important thing is, we did fix it … we’ve only got $370 million of credits left … and we’d rather have those credits at zero by the end of the year.”

Let’s just back up a second. The Qantas Group disclosed “total COVID travel credits of $800 million” at December 31 last year. All remaining unused credits will expire on December 31 this year.

On June 26, the company announced “around $400 million in COVID credits now remaining for Qantas customers in Australia”. That is, their updated balance, which appeared to have fallen, actually excluded Qantas customers outside Australia and excluded all Jetstar customers. The sneakiness – the bad faith – of this company never ceases to astonish.

 

[RooFlyer]

And the Oz today joining in on the fun:

Qantas flight credits confusion as CEO accused of rewriting history

Speaking at the airline’s full year results last week, Mr Joyce was asked about the outstanding travel credits held by customers worth about $370m and due to expire at year’s end.

Mr Joyce said when Covid happened “we had to cancel every flight because we couldn’t operate and we had to put people into credit”.

“In every email we sent our customers we said there was an option when we cancel a flight for you to get a refund,” he said.

Even in my experience, I know that's BS.

A media statement issued by Qantas as borders closed in response to the Covid pandemic, said “all bookings on cancelled flights were being converted to travel credits which can be used anywhere on our network”.

 

[Pete98765432]

And the Oz today joining in on the fun:

Qantas flight credits confusion as CEO accused of rewriting history



Even in my experience, I know that's BS.

Seems like a rewrite of history, at least from the beginning of the pandemic.

An email I received in May 2020 mentioned only "other options" if they cancelled the flight

Important information

If Qantas has cancelled your flight, for other options contact us.

An email I received in August 2021 included a reference to refunds.

Important information about your Flight Credit

If Qantas has cancelled your flight, for other options including a refund, contact us.

I seem to remember the ACCC made them include the reference to a refund.

 

[FlyingKangaroo]

Listening to the Senate Inquiry right now, it would seem as though Joe Aston wrote the Senators' entire pre-brief.

It is pretty astounding that the Qantas execs present didn't do an immediate triage prep meeting to prepare for the questions one would immediately expect to follow from the AFR article (and which are).

 

[RooFlyer]

Oh dear. The Oz online this afternoon shows that Aston was right on the money. My bolding.

Qantas admits true value of unused Covid travel credits much higher than it’s reported

The true sum of money Qantas holds in Covid travel credits has been revealed to be significantly higher than the $370m reported in the airline’s full year results.

Under relentless questioning from senators during a hearing into the cost of living, Jetstar CEO Steph Tully revealed about $100m in travel credits was yet to be claimed by passengers of the low fares airline.

That figure, and also the amount held by Qantas customers outside of Australia, was not included in the $370m.

Qantas CEO Alan Joyce was unable to say what the total value of credits was, but it appeared likely to exceed half a billion dollars.

The tenor of which matches what Aston wrote this morning (article above).

In 126 days, Qantas is going to legally steal approximately half a billion dollars from its customers.

As I've written before, I can only hope that out of all of this, the new CEO decides on a charm offensive to repaid the damage Joyce has done to the company's name, and the customers can get a break (beyond the distractive bread and circuses we got on profit-release-day).

 

[Peasant]

I found the flight credits part of the testimony particularly galling, especially after the AFR’s piece this morning.

I find it almost impossible to believe that Joyce does not know a ballpark figure of credits across the group. And if he does not, surely that is a breach of his fiduciary duty. This is a not an insignificant sum and it seems obscene for them to not disclose a group-wide figure in all of their reporting. And that’s without even taking into account what a political issue this is.

It was actually Steph Tully of Jetstar who stepped in to provide a ballpark figure for her business, as Joyce and McGuiness went around in circles; fumbling, seeking to obfuscate and deceive. They still refused to put a ballpark figure on international credits.

 

[Saab34]

They know the figure, that moment in the hearing was pretty cringe to watch.

Andrew did mention the International part was ‘Under $100m’, he seems to have a rough idea.

I do understand the complexity around refunds and they can’t just auto refund the lot, and I get they need to draw a line in the sand eventually when it comes to this credit batch, however I think they been rightfully called out on this so doubtful they can just bank it as a gain come Jan 1, won’t be a good look and won’t be attention Hudson will be after either.

What do they do with the leftovers? Share it with staff? Invest it in SAF Fuel? Donate it to something?

 

[RooFlyer]

I do understand the complexity around refunds and they can’t just auto refund the lot, and I get they need to draw a line in the sand eventually when it comes to this credit batch,

Can I query that (no surprise, you might think ). They would have payment details - overwhelmingly credit card - for the vast majority of credit holders, and most of them would likely be QFF members, so totally contactable.

Try 1: Send e-mail with bold heading (ie not within "QFF News) saying please give us bank account or CC details where we will pay you back your credit, if you don't use it by [Date]

Try 2: Failing to hear, credit back to the paying card

Try 3: If credit fails, contact the credit holder again saying last chance to get your money back

If all the above fails, the residue should be put into a charitable trust and distributed accordingly. It is NOT Qantas' money to keep.

And why do they need to put a line in the sand? They are holding other peoples' money. Sorry, Alan, that its burning a hole in your pocket, but you've had years to sort this out. Any more time is on you.

At point X, whenever that is, it goes to some good cause - not feeding Qantas' profit. This absolutely stinks.

Andrew did mention the International part was ‘Under $100m’, he seems to have a rough idea.

As Qantas Group has just released their annual results, under audited accounts, they know EXACTLY how much it is at balance date and if they don't know it as of now, then there is gross incompetence at work. I mean, really? "We've got a couple of hundred million sloshing around, somewhere - can't quite put our finger in what account its in."

 

[CaptJCool]

Listening to the Senate Inquiry right now, it would seem as though Joe Aston wrote the Senators' entire pre-brief.

It is pretty astounding that the Qantas execs present didn't do an immediate triage prep meeting to prepare for the questions one would immediately expect to follow from the AFR article (and which are).

well, he did
and they didn't prep because after all they have banned AFR in the lounges as its not an opinion they like nor welcome

i too read the AFR article and put that issue of flight credits front and central in the credit discussion

Qantas REFUND/ FLIGHT CREDIT Discussion

Hi All Perhaps this may have already been covered before... but I couldn't find anything in search. I booked red e-deal flight Syd -> BNE I had to cancel due to covid and was slapped with a flight credit value of approx $400 with 12 months expiry that is fast approaching. Its very difficult to...

www.australianfrequentflyer.com.au

also, not to be confused with the flight credits like my mothers $545 that have already been pocketed by QF because they were booked just outside the 30 September window and were dudded when McGowan shuttered the border a few days before they were to fly

 

[cove]

Rebuilding the Qantas reputation will take quite a while after AJ is gone. His international offering is way too too expensive for the average Australian to go business class long haul. How Qantas got Qatar stymied is quite incredible.

 

[pauly7]

. His international offering is way too too expensive for the average Australian to go business class long haul.

Most business class is not sold at ‘retail’ and therefore not at the prices you see at on the website. All airlines have very generous relationships with significant customers who fill those cabins in forms of discounts and rebate schemes on total ticket sales over x period of time, some even have different fare conditions and buckets. I think it’s important to keep things in perspective despite the fun of a pole on…

 

[Saab34]

Virgin also need to be investigated on the credits saga also, no doubts hundreds of millions backed up.

 

[RooFlyer]

I think it’s important to keep things in perspective despite the fun of a pole on…

Good idea. What perspective do you have of Qantas pocketing about half a billion dollars of customer's money because

1) They made it so difficult to redeem initially, and

2) Now have set an arbitrary deadline for customers to claim, else 'gosh, sorry, I guess we'll have to keep it'.

This is the perspective that Alan Joyce may have:

 

[RooFlyer]

Here's today's AFR report on the credits issue.

Qantas reveals another $100m in flight credits

Under a grilling from senators, executives confirmed the amount of money the company was holding for unused tickets was much higher than previously disclosed.

www.afr.com

I'm unsure if I'm allowed to post the 12ft ladder paywall breaker, so here is a snippet:

At December 31, the airline said it was holding $800 million in unused credits from the COVID-19 period that would expire at the end of the year unless flights were booked for travel to the end of 2024.

But when it reported last week, the company listed only $370 million worth of credits belonging to Australians in its accounts. Qantas executives conceded to the inquiry that amount did not include unused credits for subsidiary Jetstar or international customers.

Mr Joyce and Jetstar chief executive Stephanie Tully admitted that there was at least another $100 million owed to Jetstar customers, although neither would commit to extending the timeline for using the credits.

Its now about seeming attempted deception, as well as the money.

And get this:

Ms Tully said Qantas and Jetstar had made getting refunds easy compared with other airlines globally. She said about 50 per cent of the remaining $100 million held by Jetstar customers was for amounts below $100 and wouldn’t help with flights much anyway.

Talk about risible.

 

[FlyingKangaroo]

Virgin also need to be investigated on the credits saga also, no doubts hundreds of millions backed up.

VA going into voluntary administration caused an issue with tickets issued before VA went into administration. After that date, however, I'd agree that officially QF was more generous, if a passenger understood the terms and persisted successfully to get QF to apply them and actually issue the refund. Those two conditions proved tough for the average punter to overcome, and it doesn't even account for some eyebrow-raising behaviour on QF's part (remember how they'd wait to officially cancel flights for months in hopes passengers would "voluntarily" cancel the flight and thus not be eligible for a refund?).

I got all my money back from QF, but during the worst of it, some of those took literally dozens of calls, hours of wasted time, and e-mails. It was bad enough that it pushed me to VA because, even though refunds weren't on the table, their Travel Bank that worked like cash was far easier to deal with, even if the money remained temporarily tied up.

Still, it's a fair point - though I think ultimately what it does is underscore the importance of needing a proper code of conduct / compensation scheme across the Australian airline industry.

TL/DR - my beef with QF's credit fiasco is more with management's attempts to rewrite history while pretending to take responsibility for it, rather than just owning it full stop. They haven'd done themselves many favours, which is indeed a tad ironic, because QF really and truly was not the worst offender in Oz, regionally, or even globally.

 

[RooFlyer]

TL/DR - my beef with QF's credit fiasco is more with management's attempts to rewrite history while pretending to take responsibility for it, rather than just owning it full stop. They haven'd done themselves many favours, which is indeed a tad ironic, because QF really and truly was not the worst offender in Oz, regionally, or even globally.

From at least Tricky Dickies’ time, we know that it’s the cover-up that gets you, not necessarily the initial offence.

 

[Mickey Mouse]

From at least Tricky Dickies’ time, we know that it’s the cover-up that gets you, not necessarily the initial offence.

From Trump's time, we know nothing gets you.

BTW: Here's a little article from Ian Verrender

Plus
Even the CEO of the Australian Chamber of Commerce and Industry couldn't support AJ today.

 

[CaptJCool]

Good idea. What perspective do you have of Qantas pocketing about half a billion dollars of customer's money because

1) They made it so difficult to redeem initially, and

2) Now have set an arbitrary deadline for customers to claim, else 'gosh, sorry, I guess we'll have to keep it'.

This is the perspective that Alan Joyce may have:

BAM more like this perspective

Risible indeed

https://www.news.com.au/travel/travel-advice/flights/childs-outfit-on-plane-sparks-heated-debate/news-story/312f7517ce74df4d0330e45bf8027525

I fully get why they didn't wish to refund straight off the bat, as it goes to cashflow

that said, by the tail of COVID they had something in the order of $6-8 billion in Revenue Received in Advance (including all the FF points that have cash paid by suppliers at the time but are only brought to taxable income at the time the flight is flown or the toaster is despatched) so its not like they couldn't adjust to the changing circumstances as spare cash was obtained - instead doesn't help so many share buybacks like mentioned by Ian Verrender

"Instead, Joyce has been allowed to hand back $1.5 billion to investors via share buybacks, which have the effect of boosting the Qantas share price and maximising benefits to Qantas executives, including the outgoing chief executive."

$500 million at each grab - so toward the end, it never became about the cash

 

[oz_mark]

Virgin also need to be investigated on the credits saga also, no doubts hundreds of millions backed up.

Given Virgin went into administration, all ticketholders prior to the data of going into administration became unsecured creditors. This takes things down a different legal path, and there's not a lot to investigate on those tickets.