Having just announced a massive billion-dollar profit, Qantas is now proposing another round of cuts to flight services in and out of the central Australia region.
The latest move has shocked many, amidst recent concerns that the tourism industry in Australia’s ‘Red Centre’ region has suffered in the light of a reported post-pandemic crime wave and the media attention accorded to it.
According to the Australian national broadcaster ABC News, Qantas have confirmed to tourism body Tourism Central Australia (TCA) that they are planning further cuts of 30,000 seat capacity during the upcoming 2023 peak tourism period.
The TCA chief executive Danial Rochford described the move by the national carrier as “gut wrenching from my members and gut wrenching for the community.
The cut in seat capacity is set for inbound and outbound flights for Alice Springs and Yulara between March and October according to Mr Rochford.
The TCA chief executive went on to point out that, with the new proposed round of cuts, the region will have effectively lost 60,000 seat capacity in one year. This represents one quarter of pre-pandemic capacity.
Qantas return to profit
Calling upon the Northern Territory state government to intervene in the situation. Mr Rochford referred to last week’s announcement by Qantas of a windfall billion-dollar profit. “Last week, Qantas announced a billion-dollar profit,” Mr Rochford told ABC News.
“Now no one in Alice Springs is rejoicing about that because every one of your listeners know that that $1 billion was very much written on the back of increased airfares out of regional and remote Australia.”
According to a statement posted by Qantas last week “After three years and $7 billion in statutory losses due to the pandemic, the Qantas Group has returned to profit with a record result for the first half of FY23.”
The Qantas Group reported earnings of $1.43 billion Underlying Profit Before Tax to 31 December 2022, which is 49 per cent higher than the prior first half record result achieved in FY18. Statutory Profit After Tax was $1.0 billion.
According to the airline, the drivers of this result were consistently strong travel demand, higher yields and cost improvements from the Group’s $1 billion recovery program that is nearing completion.
Qantas’ domestic operations delivered $785 million and Jetstar’s $130 million, with margins of 22 per cent and 11 per cent respectively.
Speaking on the disclosure of the airline’s massive return to profit, Qantas CEO Alan Joyce stated:
“Returning to profit means we can get back to reinvesting for our customers, which is clear from the network, fleet and lounge announcements we’ve made, and from the Project Sunrise cabins we’re previewing.”
His words of reinvestment in customers will likely come is cold comfort to those in the central Australia region, following today’s news of further regional capacity cuts.