Qantas is receiving the majority of government support for airlines during the COVID-19 pandemic, racking up more than $1.2 billion in direct payments, waived charges and underwritten flights over 2020.
It’s all part of an ongoing effort to shield the national carrier from the economic destruction wrought by the pandemic, which over the past 18 months has cost Qantas $4.1 billion in before-tax losses.
And the airline has now been accused of going against the ‘Team Australia’ spirit.
Qantas revealed its so far recorded $890 million in redundancy-related costs after announcing 8500 layoffs last year, despite claiming a whopping $726 million in JobKeeper payments – 5000 staff went in 2020 alone.
Labor senator Tony Sheldon said the layoffs, which will see about 2,500 ground handling roles outsourced, clearly went against the purpose of the JobKeeper program.
“Piles of money were thrown without accountability from the Morrison government and [Qantas CEO] Alan Joyce took the opportunity,” Mr Sheldon told TND.
“They’ve used [JobKeeper] to subsidise a 10-year-old plan to get rid of workers.”
Qantas rejects Mr Sheldon’s view, saying it had previously invested in ground services staff and equipment as recently as February, and that most of its staff on JobKeeper were stood down on zero hours.
Qantas revealed the extent of its redundancy costs and other details about its taxpayer grants in documents tabled in Parliament on Tuesday, supplementing earlier analysis of corporate reports conducted by The New Daily.
The $1.2 billion figure is set to increase by hundreds of millions of dollars this year as a result of the government’s new aviation package, which will pay out further wage subsidies, underwrite new airfares, and waive yet more charges in what rivals have dubbed “QantasKeeper”.
Regional Express (REX) deputy chairman John Sharp predicted Qantas will receive about 70 per cent of the discounted tickets, which cover routes dominated by the national carrier, between April and July.
“We’ll get the scraps,” the airline boss told NCA newswire last week.
Qantas has been supported through seven separate government programs so far, including JobKeeper, refunded charges under the Australian Aviation Financial Relief Package, and subsidised flights to repatriate overseas Australians and maintain critical routes.
In future, the airline will benefit from a $200 million international aviation support program, which will outlay wage subsidies for its international crews, as well the Domestic Aviation Network Support (DANS) and Regional Airline Network Support (RANS) programs.
The DANS and RANS programs, which have been extended, provide funding to airlines to maintain a minimum level of flight capacity on routes that are no longer commercially viable because of the pandemic.
Qantas has also yet to disclose the JobKeeper subsidies it will receive from January 1 to March 31.
That the national carrier has received so much help from the public purse has received plenty of criticism.
But Neil Hansford, an aviation consultant with Strategic Aviation Solutions, said taxpayers got good value for their money in supporting the national carrier.
“Virgin had gone broke – it made Ansett look like petty cash. So why wouldn’t the government support the only airline that is Australian-owned and guaranteed to at least be able to provide service?” Mr Hansford told The New Daily.
There was no certainty that Virgin was going to come back.’’
Mr Hansford, a former airline boss, said Qantas would get 70 per cent of the discounted tickets because they were the biggest player in the market, reflecting market share rather than the government picking winners.
“If you’re going to send money to get people in the air it has to favour Qantas,” Mr Hansford said.
“They’re the ones offering a full route network with the operating capacity to ramp up.”
Deputy Prime Minister Michael McCormack told Parliament on Tuesday that $3.8 billion had now been pledged to the aviation sector throughout the pandemic, including support for ancillary businesses to airlines.
But it is impossible for the public to track every dollar paid to the sector so far. Because Qantas took money under over half a dozen programs, only the aviation financial relief package and RANS have been published through the government’s grant disclosure scheme.
What we do know is that Qantas received 59.5 per cent of the grants handed out under the aviation relief package by value, qualifying for $122.9 million in taxpayer support across three separate applications.
This dwarfed the $60 million attributed to Virgin and the $3 million given to REX under the scheme.
Qantas also received about a third of the RANS grants by value, qualifying for a $62.1 million grant, compared to REX’s $64.2 million and Virgin’s $18.1 million.
Contacted for comment, Qantas pointed TND to a statement made by Mr Joyce earlier this month.
“Most companies were able to use the whole of the JobKeeper benefit as a wage subsidy, but with so many of our people literally grounded and not working, JobKeeper acted as a social safety net for individuals more than a wage subsidy for Qantas,” Mr Joyce said.
“We are very grateful for it and we know our people are very grateful for it. To be clear, JobKeeper did subsidise the wages of people who were still working, but at some point, this was as low as 20% of our employees.”
CORRECTION, March 18 2021: An earlier version of this article incorrectly stated Qantas’ 8500 layoffs were announced in November, they actually related to redundancies announced in June.