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AUSTRALIAN AIRLINES: Last week – worst on-time performance on record?

AUSTRALIAN AIRLINES: Last week – worst on-time performance on record?

Qantas cancelled 6.7% of domestic flights, and only 44% of flights arrived on time. For Virgin Australia, it was a 14.7% cancellation rate and an on-time performance of 43%, according to privately compiled figures reported in The Australian.

Obviously, the two CEOs, Qantas’s Alan Joyce and Virgin Australia’s Jayne Hrdlicka are doing a great job of managing their organisations’ performance from Europe, where they are both enjoying a northern hemisphere summer.

Contributing to the delays have been a range of factors, including illness of staff across both airlines, and 10% of air traffic controllers calling in sick.

Bad weather in Sydney hasn’t helped either, limiting the airports runway usage. In Melbourne – fog – playing havoc with arrivals.

Late arrival and cancellation rates

Official figures won’t be available until the end of July, but for May, Bureau of Infrastructure Transport Research Economics data showed on-time performance for Qantas at 60.7%, with a cancellation rate of 7.1%. For Virgin the rates were 65.7% and 5% respectively.

Causes

Weather and illness are unpredictable variables, but the other major factors are controlled by the airlines. Their planning for the return to more than 100% of pre-COVID domestic flying has been bad. Really bad.

Flight Crews

First up – they are under crewed. Airlines have failed to recruit sufficient flying and cabin staff to service the number of flights they have planned, and have also failed to account for rates of COVID related illness and consequent isolation. I would like to say that this is Virgin and Qantas’s problem – but it seems this issue is occurring across the world. All airlines seem to be suffering the same issue to a greater or lesser extent.

Worldwide

So, yes, its bad planning. But these planning mistakes seem to be worldwide. Choose any country and any airline, and you will find the same story everywhere.

Both Qantas and Virgin Australia, slashed their workforce – Qantas by 9,400 and Virgin by 3,000. That makes it real difficult to offer pre-COVID service when you are operating at over 100% of pre-COVID capacity. Margins for error are tight. If a crew member goes down, there are not as many on standby as backup, which can even cause a flight cancellation.

Airports

The other causes are related to airport staffing, whether it be in baggage handling, or other ancillary areas. And it’s true, Qantas could not have picked a worse time to lay off illegally thousands of baggage handlers, and contract the services out to the likes of dnata, Swissport and others, who then have difficulty recruiting for the worse pay and conditions and resort to using labour hire companies to recruit their largely unskilled and untrained staff. Another contributing factor in delayed and lost luggage.

Industry abandoned

Finally, a lot of expertise has left the industry. Having been laid off or ‘furloughed’ for close to 2 years, some staff have moved on to other careers and left the industry. It’s going to be difficult to pull them back. The ‘romance’ of the industry has been lost.

Wages

Once bitten, twice shy as they say. Airlines’ wish to keep control of wages isn’t going to help either. Alan Joyce’s tempting offer of a $5,000 payment to retain staff sounds generous, but if you are an ‘in demand’ crew member or flight attendant, you might consider higher pay offers from international airlines rather than Qantas.

The Solution

Both Virgin and Qantas’s reaction is to cut flights, that is, reduce frequency of flights, hoping to shoe-horn passengers into fewer flights. Qantas has cut its flights by 15% through until September. That accounts for the fullness of most flights, and to some extent the reason why some baggage has been let behind, other than the shortage of baggage handlers and their inexperience.

The current crisis will hopefully be short lived, and be resolved in the few months before the next school holiday demand bubble. Solving the crisis might also involve some salary increases to attract and retain in-demand staff too. If the crisis goes on, then I think we can look squarely at Alan Joyce of Qantas and Jayne Hrdlicka of Virgin Australia, and shout “It’s your fault!”

2PAXfly Takeout

Airlines the world over have had it tough during the pandemic, and I say that despite the massive government subsidies Australian airlines have received to keep them in the air. IATA (International Air Transport Association) estimates that airlines globally will lose at least US$314 billion due to the pandemic. The number of airlines going to the wall is extraordinary, and includes Virgin Australia, that went into administration in the first few months of the pandemic.

Managing an airline at the moment would be no fun, although highly lucrative, with airfares through the roof and expected to remain so – at least internationally for the next 4 to 5 years. That needs to be balanced against the billions of dollars lost during the first 2 years of the pandemic, and the massive increases in input costs like fuel.

Alan Joyce and Qantas are facing some massive criticism on social media and in the press, although they haven’t done much if at all worse than most airlines across the world. However, when you claim to be the ‘Spirit of Australia’ and falsely promote yourself as ‘Australia’s national airline’, there are consequences when passengers feel abandoned. Virgin Australia, who havn’t done much better, must be quietly smirking behind their purple and red gloved hands.

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