Qantas admits true value of unused Covid travel credits much higher than it’s reported

Qantas has been forced to reveal it misrepresented the true value of unused Covid travel credits, which are due to expire at the end of the year.

The true sum of money Qantas holds in Covid travel credits has been revealed to be significantly higher than the $370m reported in the airline’s full year results.

Under relentless questioning from senators during a hearing into the cost of living, Jetstar CEO Steph Tully revealed about $100m in travel credits was yet to be claimed by passengers of the low fares airline.

That figure, and also the amount held by Qantas customers outside of Australia, was not included in the $370m.

Qantas CEO Alan Joyce was unable to say what the total value of credits was, but it appeared likely to exceed half a billion dollars.

Ms Tully said the goal was for all travel credits to be used by customers before they expired at the end of the year, but she would not promise the December 31 deadline would be extended if they were not.

“Our focus right now is you’ve got to draw a line in the sand at some point,” Ms Tully said.

Mr Joyce, Ms Tully and corporate affairs chief executive Andrew McGinnes were also questioned over the government’s decision to block Qatar Airways, amid revelations from the Assistant Treasurer Stephen Jones on Monday that it was done to protect the profitability of Qantas.

Last week, the airline reported a record full-year net profit of $1.74bn.

“Why would the Assistant Treasurer say that?” Nationals senator Bridget McKenzie asked.

“Are you colluding with the government to protect Qantas against competition?”

Qantas Group CEO Alan Joyce. Picture: NCA NewsWire / Christian Gilles

Mr Joyce responded that the Australian aviation industry was one of the “most open markets in the world”.

“If this was a restriction of capacity to protect Qantas it’s way too late, they should’ve had that in the 1990s,” he said.

“We have open skies in our major markets and there’s a lot more capacity coming back.”

He refused to answer questions about any conversations he’d had with the Prime Minister or Transport Minister about that or any other issue.

“Any conversation I have with the Prime Minister or a minister I never divulge,” Mr Joyce said.

“I’ve kept that with all seven (prime ministers) in my time as Qantas CEO and I have no intention of changing that.”

His reasons for opposing Qatar Airways’ bid for more flights into Australia were related to the fact international flying was not yet back to pre-Covid capacity, and it would be “unfair” for one airline to pull ahead of the rest.

“We said to the government capacity is coming back and granting a carrier double their traffic rights in the short term would cause distortion when capacity is already coming back,” Mr Joyce said.

“Since May, Singapore Airlines and China Southern have announced they’re putting on more capacity each than Qatar would’ve.”

Separate to the hearing, Virgin Australia chief corporate affairs officer Christian Bennett said comments by the Assistant Treasurer only “confused the substance for denying Qatar Airways additional flights between Australia and Europe”.

“Australian consumers are paying on average 50 per cent more today for international flights than they did in 2019,” Mr Bennett said.

“This is due to a lack of capacity. Denying Qatar additional flights keeps airfares between Australia and Europe unnecessarily higher than need be and denies the Australian tourism industry over $500m in economic stimulus.”

Committee chair Jane Hume pressed the issue further, asking Mr Joyce if Australians would be better off in terms of destination choice and fares had Qatar Airways been allowed to increase flights.

Mr Joyce responded with “we believe that with other airlines adding capacity, airfares were doing to come down anyway”.

Originally published as Qantas admits true value of unused Covid travel credits much higher than it’s reported