Latest news with #VanessaHudson
West Australian
20-05-2025
- Business
- West Australian
Qantas Group, Virgin Australia reap sky-high profits off the back of limited competition, strong travel demand
Dwindling competition and record profits are clearing the way for an airline duopoly between Qantas and Virgin Australia, a new report has revealed. The Australian Competition and Consumer Commission's (ACCC) latest domestic airline competition report notes Qantas and Virgin are ruling the skies off the back of strong financial results. Qantas recorded a whopping $1.5b in earnings for the first half of the 2025 financial year – $916m of that from its domestic operations, including its budget carrier Jetstar. Both carriers services 63.9 per cent of all passengers, the consumer watchdog found. It comes as Jetstar remains the only low-cost carrier in Australia since the collapse of Bonza and the closure of Tiger Air in 2020. Rex, which has reduced capacity on regional services following its administration, only carried 1.7 per cent of passengers. The airline reported a massive earnings surge of about 54 per cent between the first half of the 2024 and 2025 financial years. 'The high half-yearly earnings reported by Qantas Group reflect its dominance of the domestic airline sector, with Qantas and Jetstar accounting for over 60 per cent of passengers,' ACCC Commissioner Anna Brakey said. 'Jetstar has been able to capitalise on the continued absence of competitive pressure from another low-cost carrier in the domestic market to increase its market share and operating margin.' Virgin Australia recorded a similar spike in earnings, achieving record profits across the first half of this financial year following its post-administration restructure under Bain Capital. Its half-year results are not publicly reported. Airfare prices remained the same and followed seasonal trends in the first quarter of 2025. Passenger demand took a hit off the back of ex-Tropical Cyclone Alfred, but took back off again during April due to the school holidays, Easter and Anzac Day all following right after each other. The ACCC found April 17, 2025, the Thursday before Good Friday, was the busiest day for domestic travel in the past five years. Qantas delivered its first dividend since 2019 earlier in the year, announcing it had paid 27,000 non-executive employees $1000 each as a 'thank you payment' in December. 'Our financial strength means we are now in a position to pay our shareholders dividends for the first time in almost six years,' Qantas Group CEO Vanessa Hudson said at the time. However, the airline could be forced to pay more than $120m in penalties for illegally outsourcing more than 1800 ground workers during 2020. A three-day hearing in the High Court began on Monday to decide the penalty Qantas must pay for the illegal sacking – a decision the airline has admitted it was 'in the wrong' for.
Sydney Morning Herald
09-05-2025
- Business
- Sydney Morning Herald
Competition is toughening, but will it be enough for Qantas to lift its game?
In this way, the 'healing hand of the market' may have an effect, he said. Qantas chief executive Vanessa Hudson, speaking during the company's half-year results in February, said: 'We always said that we welcome competition … Our focus is about looking after our customers. We feel really confident in being able to compete.' Six months before Qatar's entry into the market was given final approval, the government released its long-awaited Aviation White Paper to address broader industry concerns. The White Paper calls for legislation to create an Aviation Industry Ombuds Scheme, with the 'power to direct airlines and airports to provide remedies to consumers'. It also includes a proposal for a new Aviation Customer Rights Charter. A spokeswoman for Minister for Infrastructure and Transport Catherine King said: 'The Albanese Labor government has introduced the most comprehensive reforms to the aviation sector in 25 years.' Yet even before the White Paper's release, the prospect for domestic competition dimmed, with significant changes for two smaller players in 2024: Rex, for 'regional express', went into administration in July and stopped flying to capital cities, while Bonza went out of business in April. The Albanese government, which had acquired $50 million in debt from Rex in January, said it would step in to ensure regional flights continue to fly while it seeks a new buyer. With Rex out of the picture, the Australian Competition and Consumer Commission found real average fare revenue per passenger had increased by about 3 percentage points to 13.6 per cent in the second half of 2024 following 'the loss of competition from Rex's exit on these routes '. By the end of the year, Virgin Australia, Qantas and the Qantas-owned Jetstar controlled a combined 98.6 per cent of the domestic market. On-time arrivals for all airlines averaged 80.2 per cent in March, a fall from the long-term average of 80.7 per cent, according to Bureau of Infrastructure and Transport Research Economics numbers. On-time departures averaged 80.7 per cent, down from an average of 81.8 per cent, although airlines blamed the impact of Cyclone Alfred in Queensland. Consumer advocate Adam Glezer of Consumer Champion says that, in this climate, the pace of reform is too slow. 'There is no momentum in terms of anything meaningful,' he said. 'By preparing the Aviation White Paper, it appears that the government is trying to appease the public by saying, 'we are putting you first', while they're effectively doing nothing.' While the government and regulators can set the conditions for the industry, the market would be needed to produce competitive dynamics. That likely means a third or even fourth domestic airline would be necessary. University of Sydney's Merkert says that if a new, viable domestic carrier did emerge, it would need to profitable, so it would need access to the domestic premium market of Brisbane, Sydney and Melbourne, which is a 'golden triangle' of profitability. 'The real margins are made domestically, and especially on that sector,' he said. For now, Merkert says Qantas and Virgin are 'showing capacity discipline' on the capital city routes, ensuring that they don't compete to the point of undercutting their own profits. 'They have almost an informal agreement to be quite happy as what we would call a 'duopoly' because that allows both of them to generate very healthy revenues and profit margins.' Ahead of an expected ASX relisting, Virgin has swung to profit. The company's earnings before interest and tax rose to $519.4 million in 2024, up 18 per cent from $439.4 million in 2023, on growing demand from premium leisure and corporate travellers as well as budget-passengers. Qantas posted an 11 per cent increase in pre-tax profit of $1.4 billion in the half-year to December and flagged a domestic fleet refresh of plane interiors. It's also adding new Airbus A321XLRs. The Coalition, for its part, has been less impressed by the state of the air travel industry. Before the May 3 federal election, in which voters resoundingly backed the Labor government of Anthony Albanese, Shadow Infrastructure and Transport Minister Senator Bridget McKenzie said that 'under Labor, aviation competition has nosedived'. In April, McKenzie proposed the creation of a two-year trial that would allow international airlines flying into Darwin to carry domestic passengers between that city and other Australian capitals, a process known as cabotage. Slot machinations There are other obstacles for more robust domestic competition. Capacity constraints at Sydney Airport are also to blame, Merkert says. With its limited number of 'slots' – the time allotments for the use of the 'airport infrastructure necessary to arrive or depart ' – as well as the airport's curfew, Sydney airport constraints can hold back capacity across the 'golden triangle'. Sydney's airport, restricted to 80 aircraft movements an hour, has not had ' flexibility to respond to delays caused by disruptions like bad weather'. Merkert says a potential competitor to Qantas or Virgin would need a set of two slots in Sydney, one for the morning and one for the evening, for business and premium customers wanting commuter service. Nearly one-third of Sydney's total slot pool is reportedly available to new entrants, but with only one in 10 slots available in peak periods. 'You need to have two slots each day and that is getting increasingly difficult, if not impossible,' Merkert says. Sydney Airport chief Scott Charlton said: 'There's been good progress in the last six months on reforms at Sydney Airport, including a new slot co-ordinator and an audit of slot use.' The airport is also implementing a 'recovery period', which will allow airlines access to more slots following weather disruptions, he said. In April, Airport Coordination – a UK-based outfit with a vast international client base – took over Sydney's slot management from the government-formed Airport Coordination Australia, pledging more transparency on slot usage, on which it says it will publish regular data. A spokeswoman for minister King said: 'We've passed legislation to reform the slot system at Sydney Airport, boosting competition and levelling the playing field for new entrants.' With the market power effectively held by two airline groups (Qantas owns Jetstar), domestic airlines face few financial or regulatory consequences for shifting or cancelling scheduled flights. Customer advocates say a customer rights charter upheld by an ombuds scheme would need the power to force airlines to pay compensation. To that end, Nationals Senator Bridget McKenzie last year sponsored a 'pay on delay' bill, which would put explicit penalties on airlines for delaying or cancelling flights for commercial reasons. The bill remains before the Senate. Enshrining customers' rights to get a refund for delayed and cancelled flights is a path already blazed by the European Union, which has had such legislation since 2005, and more recently the US, which under the Joe Biden administration instituted a rule change that entitled passengers to a refund 'if their flight is cancelled or significantly changed'. Peter Forsyth, aviation consultant and former professor of economics at Monash University, says if such a compensation scheme were imposed in Australia, 'there's a question about who pays for it. My guess is that much of the cost would go to the passenger ultimately.' But how much would that cost be? In Europe, the additional cost per passenger resulting from its compensation scheme was estimated in 2022 to be between US60¢ and $US1.20 (94¢ to $1.87), according to passenger advocacy business AirHelp. Would the threat of a compensation scheme force airlines to lift their game? It's not clear. University of Maryland researcher Jingyi Xing found that the EU customer compensation scheme legislation called EC261, introduced in 2005, reduced the proportion of flights delayed for more than three hours. But it also led to a fall in the share of flights with delays up to 15 minutes, or those arriving early. The 'EC261 does not improve the overall on-time performance of flights,' Xing said. Loading 'A compensation policy like this affects not only consumer welfare but also competition among firms,' she said. 'Because all carriers are subject to the same compensation scheme, low-cost carriers may be placed at a disadvantage relative to legacy carriers as they charge cheaper prices and have lower revenues,' she said. That means one fallout of such a scheme could be a further shake-out of low-cost carriers on certain routes. 'This could ultimately lead to higher prices and harm to consumers,' she says. Given the situation in Australia, with two companies providing almost all domestic flights, it's hard to imagine a further reduction in airline choice. Glezer, who for a fee helps customers claw back money from businesses, said: 'COVID … should have been a wake-up call for the government to implement change for the Australian flying public. 'How anyone can say Australians should not be entitled to a full refund for all flight cancellations is mind-boggling. 'The fact that the government hasn't implemented this shows their disregard for the consumer.'
The Age
09-05-2025
- Business
- The Age
Competition is toughening, but will it be enough for Qantas to lift its game?
In this way, the 'healing hand of the market' may have an effect, he said. Qantas chief executive Vanessa Hudson, speaking during the company's half-year results in February, said: 'We always said that we welcome competition … Our focus is about looking after our customers. We feel really confident in being able to compete.' Six months before Qatar's entry into the market was given final approval, the government released its long-awaited Aviation White Paper to address broader industry concerns. The White Paper calls for legislation to create an Aviation Industry Ombuds Scheme, with the 'power to direct airlines and airports to provide remedies to consumers'. It also includes a proposal for a new Aviation Customer Rights Charter. A spokeswoman for Minister for Infrastructure and Transport Catherine King said: 'The Albanese Labor government has introduced the most comprehensive reforms to the aviation sector in 25 years.' Yet even before the White Paper's release, the prospect for domestic competition dimmed, with significant changes for two smaller players in 2024: Rex, for 'regional express', went into administration in July and stopped flying to capital cities, while Bonza went out of business in April. The Albanese government, which had acquired $50 million in debt from Rex in January, said it would step in to ensure regional flights continue to fly while it seeks a new buyer. With Rex out of the picture, the Australian Competition and Consumer Commission found real average fare revenue per passenger had increased by about 3 percentage points to 13.6 per cent in the second half of 2024 following 'the loss of competition from Rex's exit on these routes '. By the end of the year, Virgin Australia, Qantas and the Qantas-owned Jetstar controlled a combined 98.6 per cent of the domestic market. On-time arrivals for all airlines averaged 80.2 per cent in March, a fall from the long-term average of 80.7 per cent, according to Bureau of Infrastructure and Transport Research Economics numbers. On-time departures averaged 80.7 per cent, down from an average of 81.8 per cent, although airlines blamed the impact of Cyclone Alfred in Queensland. Consumer advocate Adam Glezer of Consumer Champion says that, in this climate, the pace of reform is too slow. 'There is no momentum in terms of anything meaningful,' he said. 'By preparing the Aviation White Paper, it appears that the government is trying to appease the public by saying, 'we are putting you first', while they're effectively doing nothing.' While the government and regulators can set the conditions for the industry, the market would be needed to produce competitive dynamics. That likely means a third or even fourth domestic airline would be necessary. University of Sydney's Merkert says that if a new, viable domestic carrier did emerge, it would need to profitable, so it would need access to the domestic premium market of Brisbane, Sydney and Melbourne, which is a 'golden triangle' of profitability. 'The real margins are made domestically, and especially on that sector,' he said. For now, Merkert says Qantas and Virgin are 'showing capacity discipline' on the capital city routes, ensuring that they don't compete to the point of undercutting their own profits. 'They have almost an informal agreement to be quite happy as what we would call a 'duopoly' because that allows both of them to generate very healthy revenues and profit margins.' Ahead of an expected ASX relisting, Virgin has swung to profit. The company's earnings before interest and tax rose to $519.4 million in 2024, up 18 per cent from $439.4 million in 2023, on growing demand from premium leisure and corporate travellers as well as budget-passengers. Qantas posted an 11 per cent increase in pre-tax profit of $1.4 billion in the half-year to December and flagged a domestic fleet refresh of plane interiors. It's also adding new Airbus A321XLRs. The Coalition, for its part, has been less impressed by the state of the air travel industry. Before the May 3 federal election, in which voters resoundingly backed the Labor government of Anthony Albanese, Shadow Infrastructure and Transport Minister Senator Bridget McKenzie said that 'under Labor, aviation competition has nosedived'. In April, McKenzie proposed the creation of a two-year trial that would allow international airlines flying into Darwin to carry domestic passengers between that city and other Australian capitals, a process known as cabotage. Slot machinations There are other obstacles for more robust domestic competition. Capacity constraints at Sydney Airport are also to blame, Merkert says. With its limited number of 'slots' – the time allotments for the use of the 'airport infrastructure necessary to arrive or depart ' – as well as the airport's curfew, Sydney airport constraints can hold back capacity across the 'golden triangle'. Sydney's airport, restricted to 80 aircraft movements an hour, has not had ' flexibility to respond to delays caused by disruptions like bad weather'. Merkert says a potential competitor to Qantas or Virgin would need a set of two slots in Sydney, one for the morning and one for the evening, for business and premium customers wanting commuter service. Nearly one-third of Sydney's total slot pool is reportedly available to new entrants, but with only one in 10 slots available in peak periods. 'You need to have two slots each day and that is getting increasingly difficult, if not impossible,' Merkert says. Sydney Airport chief Scott Charlton said: 'There's been good progress in the last six months on reforms at Sydney Airport, including a new slot co-ordinator and an audit of slot use.' The airport is also implementing a 'recovery period', which will allow airlines access to more slots following weather disruptions, he said. In April, Airport Coordination – a UK-based outfit with a vast international client base – took over Sydney's slot management from the government-formed Airport Coordination Australia, pledging more transparency on slot usage, on which it says it will publish regular data. A spokeswoman for minister King said: 'We've passed legislation to reform the slot system at Sydney Airport, boosting competition and levelling the playing field for new entrants.' With the market power effectively held by two airline groups (Qantas owns Jetstar), domestic airlines face few financial or regulatory consequences for shifting or cancelling scheduled flights. Customer advocates say a customer rights charter upheld by an ombuds scheme would need the power to force airlines to pay compensation. To that end, Nationals Senator Bridget McKenzie last year sponsored a 'pay on delay' bill, which would put explicit penalties on airlines for delaying or cancelling flights for commercial reasons. The bill remains before the Senate. Enshrining customers' rights to get a refund for delayed and cancelled flights is a path already blazed by the European Union, which has had such legislation since 2005, and more recently the US, which under the Joe Biden administration instituted a rule change that entitled passengers to a refund 'if their flight is cancelled or significantly changed'. Peter Forsyth, aviation consultant and former professor of economics at Monash University, says if such a compensation scheme were imposed in Australia, 'there's a question about who pays for it. My guess is that much of the cost would go to the passenger ultimately.' But how much would that cost be? In Europe, the additional cost per passenger resulting from its compensation scheme was estimated in 2022 to be between US60¢ and $US1.20 (94¢ to $1.87), according to passenger advocacy business AirHelp. Would the threat of a compensation scheme force airlines to lift their game? It's not clear. University of Maryland researcher Jingyi Xing found that the EU customer compensation scheme legislation called EC261, introduced in 2005, reduced the proportion of flights delayed for more than three hours. But it also led to a fall in the share of flights with delays up to 15 minutes, or those arriving early. The 'EC261 does not improve the overall on-time performance of flights,' Xing said. Loading 'A compensation policy like this affects not only consumer welfare but also competition among firms,' she said. 'Because all carriers are subject to the same compensation scheme, low-cost carriers may be placed at a disadvantage relative to legacy carriers as they charge cheaper prices and have lower revenues,' she said. That means one fallout of such a scheme could be a further shake-out of low-cost carriers on certain routes. 'This could ultimately lead to higher prices and harm to consumers,' she says. Given the situation in Australia, with two companies providing almost all domestic flights, it's hard to imagine a further reduction in airline choice. Glezer, who for a fee helps customers claw back money from businesses, said: 'COVID … should have been a wake-up call for the government to implement change for the Australian flying public. 'How anyone can say Australians should not be entitled to a full refund for all flight cancellations is mind-boggling. 'The fact that the government hasn't implemented this shows their disregard for the consumer.'
AU Financial Review
08-05-2025
- Business
- AU Financial Review
Qantas CEO Vanessa Hudson sees more positive fuel, currency outlook
Qantas Airways chief executive Vanessa Hudson has forecast a positive fuel and currency environment for the carrier next year, while saying the group was closely watching potential supply chain disruption to airline manufacturing parts. A stronger Australian dollar would support outbound tourism, benefiting airlines such as Qantas. Hudson also told the Macquarie Australia Conference that next financial year the airline's capacity on its US routes would be back at pre-pandemic levels.
West Australian
03-05-2025
- Business
- West Australian
Australia's major airlines and airports brace for surge in complaints amid aviation customer rights charter
Perth Airport is warning a 'deluge of frivolous or vexatious complaints' from a plan aimed at giving passengers more rights amid growing criticism about the nation's aviation sector. National carrier Qantas is among the major airlines and airports that acknowledge Labor's proposal could help to better inform passengers about their rights when travelling. But they say proposed guidelines as written could raise unrealistic expectations among consumers — or compromise safety. Aviation will face intense scrutiny regardless of the Federal election result, with customers increasingly dissatisfied with how airlines handle flight cancellations, delays, refunds and complaints. Labor will likely proceed with its draft aviation customer rights charter, while Coalition transport spokeswoman Bridget McKenzie has spent years targeting major airlines. Labor's proposed charter — announced just days before Christmas — will form part of the new statutory Aviation Industry Ombuds Scheme and will be overseen by the Ombudsperson who will have the powers to determine that customer disputes be resolved with specific remedies. Perth Airport has called for clarity in the charter, saying well-meaning but broad and vaguely worded proposals would only encourage 'a deluge of frivolous or vexatious complaints'. This would cause unnecessary costs on the industry and undermine the ability of the scheme to help consumers with legitimate complaints, it said. Under the charter, customers would receive a full refund for a cancelled flight within 14 days, and receive assistance to rebook with the airline or an alternative airline with the option to cancel for a full refund if a flight is disrupted or delayed for more than three hours. The charter also demands 'accurate, timely and accessible information and customer service' and requires airlines to pay for the cost of returning lost suitcases. Perth Airport — Australia's fourth biggest — said the charter as written also opened the door for the Ombudsman to be increasingly required to make calls on issues where perceptions and feelings, rather than facts, were in dispute. But if a passenger claimed to have been spoken to disrespectfully by an airport security officer or an airline staff — and that worker denied the allegations — Perth Airport questioned how the Ombudsman would determine right or wrong. Meanwhile, Qantas said it already provided customers with a wide range of support in the event of a delay or cancellation within its control. This included options for a refund or re-booking on another flight, as well as meal vouchers, transfers and accommodation — all required by existing consumer law. The Flying Kangaroo — led by Vanessa Hudson — said there were several sections within the draft charter that needed clarification to 'avoid unintended consequences, ensure responsibility is shared appropriately and deliver improved outcomes for all aviation consumers'. The Regional Aviation Association of Australia — whose 120 members include Virgin Australia Regional Airlines, QantasLink and failed Rex Airlines — said if the charter was applied to all regional airlines, it had the potential to affect remote communities across the country in adverse ways. This included price rises and reduction in services. 'Safety must also remain the industry's number one priority. Any charter must not threaten or compromise the world-class safety culture of the Australian aviation industry,' it said. The Australian Travel Industry Association — the peak body for travel businesses — called for travel agents and other third parties that sell aviation services to be left out of the charter, citing there were already effective avenues for recourse.
