Qantas Airways came within 11 weeks of financial collapse at the height of the Covid-19 pandemic when travel came to a standstill and the airline continued to haemorrhage cash, chief executive Alan Joyce has said.
Speaking in Sydney on Monday, Mr Joyce said that in early 2020 he was receiving weekly reports from his finance team that made it clear how long the airline’s reserves would last.
Qantas’ minimum life expectancy gradually lengthened to two years after it raised capital, sold land and brought expenses under control, he said. Rival Virgin Australia collapsed at the same time.
Mr Joyce’s disclosure in some ways counters criticism that he cut costs — including more than 8,000 workers — too aggressively after the onset of Covid-19, leaving the airline struggling to cope when demand eventually rebounded.
With a shrunken workforce, Qantas has this year been plagued by flight cancellations, lost bags and delays.
Senior executives were asked to help out with baggage handling for three months to support airport operations.
“People forget how low everything was back in March, April, May, June 2020,” Mr Joyce said. “There was no vaccine. There was no hope that it could be as effective as it was. We had to stare into this 11 weeks of survival.”
Qantas has now built in buffers to help service levels return to normal. There are 20 aircraft set aside and ready to be put to use at any time should operational problems arise, he said.
Overall global passenger traffic in July hit 75 per cent of pre-pandemic levels in 2019, with domestic travel at 86.9 per cent of the July 2019 level.