After the epidemic and border closures shuttered much of the regional aviation industry in 2020, Vanessa Hudson will take over as CEO of Qantas Airlines in November. She inherits a company that is still having trouble getting back to operations.
The good news for Qantas is that it can impose higher tickets because of the airline’s increased demand for air travel. In the second half of 2022, it even managed to report a profit ofA$ 1.43 billion( US$ 963 million ).
But these circumstances didn’t persist. As Hudson, an officer who joined Qantas in 1994 and has been the company’s general business officer since 2018, deals with the extremely different short-term difficulties that come with recovery, she did increasingly need to focus on all the long-standing problems that existed for the Australian flagship airline prior to 2020.
Demand for air travel is recovering more quickly than provide for two main reasons.
The first is the time and effort required to return to service the plane that were parked at nearby interior airports and aircraft storage facilities during the pandemic. About 100 of Qantas’ 126 aircraft were put into storage, six aging Boeing 747s were retired, and the delivery of the new Airbus A321neo and Boeing 77 – 9 aircraft was postponed.
Airlines have never had to hold this numerous aircraft in the history of civil aircraft. Restoring them to support necessitates thorough construction inspections and tests. Just a small number of skilled protection personnel can prepare so many aircraft to resume flight.
Which brings up the second, more crucial problem: the need to replace positions.
The economy was dealing with a global lack of skilled aircraft even before the pandemic. Since borders were closed in 2020, it has been struggling to replace every employee, including the air and ground crowd.
Nearly a third of Qantas’ 30, 000 individuals were fired, including nearly 2, 000 ground crew members who were forced to retrench illegally. By the end of 2024, it hopes to hire almost 2,000 people, with a number of 8,500 by the year’s side.
Most people who have found work in various fields are never coming back. Some in the field worry that air is no longer a desirable profession. Additionally, all of the aircraft, flight technicians, and technicians who are being re-employed need refresher training before being allowed to work.
The whole air offer chain, including producers, is being impacted by labor shortages. On different aircraft shipments, Qantas is currently experiencing difficulties of around six months.
vying for clients
As Qantas struggles to keep up with demand, competition for clients will be a fairly small issue. However, this won’t take as airlines expand their ships and the current high cost of air travel starts to drop. For instance, at the end of 2022, tickets in the US market returned to their pre-pandemic quantities( in inflation-adjusted terms ).
I anticipate that Qantas may be dealing with many of the same competitive pressures that motivated its pre-pandemic cost-cutting and outsourcing by the end of 2023 or original 2024. It is partially attribute this to the service provided by the global government to airlines, which had the unfortunate side effect of fewer flight falls in 2020 than in 2018 or 2019.
While Qantas made a return for every year between 2015 and 2019, profit margins were very slim.
There is a lot of discussion about how the crisis permanently altered the air travel industry. For instance, company journey might never return. In February 2021, consulting company McKinsey predicted that the post-pandemic competition for business travel may be 20 % smaller.
The problem for Qantas and some airlines will be to arrange and adapt services appropriately while the jury is still deliberating on this issue and others.
In the long run, Qantas needs to lessen its economic impact.
The Carbon Offsetting and Reduction Scheme for International Aviation of the International Civil Aviation Organization has established a requirement that all foreign steam ships must set off the carbon emissions associated with airlines starting in 2027.
More often, stricter domestic economic requirements are very good as a result of the drive to decarbonize financial aviation.
Due to the airline’s comprehensive network of moderate and long-haul flights( which use more gasoline ) and aging, less fuel-efficient fleet, this will be more difficult for Qantas than rivals.
Even over 15 years old on average, more than twice as old as competitors like Singapore Airlines. Ships replacement will be a difficult task.
Volodymyr Bilotkach is Associate Professor, Purdue University
Under a Creative Commons license, this story has been republished from The Conversation. Read the original publication.