SYDNEY — Qantas Airways Ltd.’s QAN, +6.83% recent poor service performance was caused by staff absences, including those from COVID-19, rather than the airline’s layoffs earlier in the pandemic, Chief Executive Alan Joyce said.
Qantas was among the global carriers to lay off thousands of employees during the pandemic, only to struggle to rehire when demand rebounded. Yet, Joyce said on an earnings call Thursday that tight labor markets weren’t to blame for the cancellations, delays and baggage losses that have angered customers and led to union calls for him to quit.
“The issues that we’ve had is because there’s been a spike in Covid that I don’t think anybody was predicting over the last few months,” Joyce said.
Levels of staff sickness were on average 50% higher than usual over recent months, and sometimes twice normal levels, Joyce said. As many as 320 pilots were sick or in isolation at any one time, he added.
“No business can have coverage in reserve to be able to deal with that,” Joyce said.
Australia’s latest wave of COVID-19 infections peaked in July and the number of daily cases has since declined by about two-thirds. The country is also in the midst of its winter flu season.
Qantas misplaced 11 out of every 1,000 pieces of luggage in July, when just 52% of its flights departed on time. Prior to the pandemic, Qantas misplaced just five of every 1,000 cases and dispatched 81% of flights on time.
Both metrics should be back at their respective pre-pandemic levels by September, Joyce said.
Joyce defended his decision to lay off staff through the pandemic, when Qantas had been among industry participants predicting that demand would take years to recover. He said that with planes grounded by domestic and international border closures, Qantas had at one stage been just 11 weeks away from going bankrupt unless it took drastic action.
Demand has recovered more quickly than anticipated but many staff that Qantas has tried to bring back have since found work elsewhere.
“That’s fair because people weren’t going to sit around and just wait for the aviation industry to come back,” Joyce said.
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