High airfares are not forever, says Qantas CEO Alan Joyce

Ahead of its mega half-year profit announcement, the Qantas boss says there are ways to avoid high airfares – and has announced a $100m investment in airport lounges.

Qantas has announced plans for a second lounge at London’s Heathrow Airport for top-tier frequent flyers.

Qantas chief executive Alan Joyce has denied the airline has an image problem, as he assured travellers eye-watering airfares will come down once competition is re-established, while calling for greater certainty on industrial relations reforms.

Announcing a $100m investment in airport lounges, Mr Joyce said airfares were 20 per cent higher than pre-Covid-19 because fuel was 65 per cent more expensive.

But he insisted Qantas fares remained value for money and people looking for cheap fares could book with Jetstar, book well in advance or fly midweek.

“This year 2023, Jetstar has 10 million seats available for under $100, Qantas has 2 million seats available for under $200 and frequent flyers now have 5 million seats available for points redemption,” he said.

Qantas chief executive Alan Joyce. Picture: Getty Images

“My advice is to book early; the second thing is to travel on a Tuesday, Wednesday or Thursday, and the third thing I’d recommend is to wait for the sales to come up.”

Mr Joyce said international fares would eventually fall as overseas airlines increased capacity on Australian routes and Qantas had to compete.

“We don’t define the prices, the market does,” said Mr Joyce, who will announce a huge half year profit in the vicinity of $1.3bn for the airline on Thursday.

“Typically every year for the last two decades airfares in real terms have gone down, and as competition is re-established airfares will come down again, and we have to compete against those airlines.”

As well as high fares, another bugbear for travellers in the post-pandemic world has been the difficulty using travel credits issued in the place of cancelled flights during Covid.

Hundreds of millions of dollars worth of travel credits remain unspent, but Mr Joyce said the airline was going to great lengths to help people use them.

Along with a dedicated “travel credits concierge” in call centres, Qantas was working on a “find my travel credits” website, similar to “find my super” sites.

“We are sending out emails every month to remind people to use their travel credits and just before Christmas we did a double points offer if you used your credit, so we’re incentivising people to use their credits,” said Mr Joyce.

The Australian Competition & Consumer Commission continued to investigate Qantas’ handling of travel credits, and polling company Roy Morgan recently revealed Qantas had plunged 31-spots from nine to 40 in its “most trusted” company rankings.

Despite the grim showing, Mr Joyce denied Qantas had an image problem.

“In the research we do, we’re already seeing our trusted brand recover,” he said.

“We’ve gone through periods of time when it’s actually been worse when I’ve been CEO. The worst was in 2011 when there was a dispute with the engineers and there were a lot of safety issues. The brand took a big hit because safety took a big hit. Safety hasn't taken a big hit this time.”

Industrial relations remained a challenging road to navigate, with Mr Joyce previously stating his opposition to multi-employer bargaining laws introduced by the Albanese government.

What he wanted to see was greater industrial certainty for employers rather than swinging from one extreme to the other each time there was a change of government.

“The pendulum swings from one side to the other. When there was Work Choices, the employers had a massive advantage, now with multi-employer bargaining it gives the unions a massive advantage," Mr Joyce said.

“We’d like a stable system somewhere in the middle that encourages people to negotiate in good faith.”

The airline will upgrade international lounges in Sydney and Melbourne as well domestic facilities in Hobart and Broome.

Hong Kong will also get a refurbishment after the airline previously flagged it for closure.

He was confident trust in Qantas would be back to what it was pre-Covid-19 by the end of the year due to performance improvements and investments such as the $100m being sunk into lounges over the next three years.

With about 30 per cent of Qantas passengers using lounges, the airline saw it as necessary to keep improving and expanding the facilities.

In addition, travellers ranked lounges as the third main reason to fly with Qantas, after network and on-board product.

“What we find over time is that more and more frequent flyers qualify for (lounge access), because we have nine million customers using them each year, so we have to make them bigger and have more of them,” Mr Joyce said.

In response, a brand new “first lounge” was planned for Heathrow Airport to coincide with the first non-stop Sydney-London flights in late 2025.

Lounges in Hong Kong and at Sydney and Melbourne international airports were in for major renovations and refreshment; a new Qantas club was on the cards for Hobart, and Broome could expect an upgraded lounge to accommodate an increasing number of premium leisure travellers visiting the region.

Work was scheduled over the next three years, providing significant extra capacity.

Qantas passengers are eligible for lounge access if they have frequent flyer status of gold or above, are travelling in business or first class, or have equivalent status with partner and oneworld airlines.

Travellers can also buy Qantas Club membership for $699 in the first year, and renew it annually for $540.