By Frances Howe
Qantas took advantage of a “tragedy for the nation” when it illegally outsourced the roles of 1800 workers, a barrister for the Transport Workers’ Union has told the Federal Court.
“That’s what motivated them,” Noel Hutley, SC, said. “It was a once-in-a-lifetime opportunity, which as Qantas conceived of it, would return them to the order of $100 million per year. And that was not $100 million per year on a one-off basis.”
Proceedings to determine Qantas’ penalty for dismissing workers in 2020 continues.Credit: Wolter Peeters
A Federal Court hearing to determine Qantas’ penalty for illegally terminating workers’ contracts during the COVID-19 pandemic continued on Tuesday. The TWU is asking the court to award the maximum penalty of $121 million.
Qantas’ lawyers are suggesting a penalty of between $40 million and $80 million would be more appropriate, and the maximum penalty of $121 million is “manifestly unreasonable” given the company has “accepted the seriousness of its conduct”.
The court previously found the company had illegally dismissed workers and prevented them from taking industrial action against it. Qantas’ appeal to the Full Court was dismissed, and that determination was upheld by the High Court.
Late last year, Qantas agreed to compensate by a total of $120 million the 1820 affected ground staff whose contracts were terminated.
The first day of hearings on Monday involved the cross-examination of Qantas’ chief people officer, Catherine Walsh, who began the role in February 2024. She told the court that the airline’s agreement to pay compensation was evidence that the company was “very sorry”.
On Tuesday morning, Justice Michael Lee suggested that if Qantas were truly remorseful, it would have picked a witness who was “there at the relevant time”. Instead, Lee suggested that “a deliberate forensic decision” was made for chief executive officer Vanessa Hudson not to be cross-examined, despite Lee having given Qantas “every opportunity” to call Hudson or someone else who was there in 2020.
On Monday, Lee said a “message must be sent to the broader corporate community that you can’t play the court for a fool and try to fashion your evidence in a careful way in order to try to dissemble what went on”.
Meanwhile, the latest snapshot of the nation’s aviation sector from the competition regulator has highlighted Qantas’ budget arm, Jetstar, as continuing to cash in on the lack of robust competition in the market.
Within Qantas’ whopping $1.5 billion earnings before tax in the first half of 2024-25, Jetstar increased prices to record an operating margin of 18 per cent.
‘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.’
Anna Brakey, ACCC commissioner
That is up from 13 per cent in the first half of the 2023-24 financial year, the increase coinciding with fellow budget airline Bonza’s collapse in April 2024. It helped deliver a massive earnings increase for the Qantas Group, with Jetstar domestic flight revenue jumping 54 per cent in that same time.
The findings come from the Australian Competition and Consumer Commission’s quarterly look at domestic airline competition, which found both Qantas and Virgin Australia had recorded impressive financial results in the second half of 2024.
Virgin has not publicly reported its half-year results, although chief executive Jayne Hrdlicka said in February it had achieved record profits.
ACCC commissioner Anna Brakey said Jetstar’s earnings jump was largely explained by Bonza’s demise.
Compared with an 18 per cent operating margin on domestic flights, Jetstar’s international flights were at 15 per cent due to increased competition, the report said.
“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,” 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.”
The report found airlines had improved their punctuality in the past six months from 74.5 per cent to 80.2 per cent. But that still sits below the industry’s long-term average of 80.7 per cent.
The cancellation rate spiked in the March quarter to 5 per cent, well above the long-term rate of 2.2 per cent, but that period included ex-tropical cyclone Alfred.
After a peak in October 2024, the average real revenue per passenger fell by 16.1 per cent in the three months to January this year, before increasing again by 9.6 per cent by March.
With AAP
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