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20 May, 2021

Qantas slashes agent commissions, while Virgin goes on hiring spree

The flying kangaroo has announced it will cut agent commissions on international tickets from five per cent to one per cent, amid a spate of job cuts and a wage freeze, in its latest market update.

Meanwhile, Virgin Australia has provided a market update of its own, announcing new routes, increased frequencies and a hiring spree.

This morning Qantas Group announced its total revenue loss since the start of COVID-19 is now projected to reach $16 billion by the end of FY21 – however, the role of domestic travel demand in the Group’s recovery is highlighted by the fact revenue from domestic flying is expected to almost double between the first and second half of this financial year.

The group is on track to reach 95 per cent of its pre-COVID domestic capacity for the fourth quarter of FY21 with Qantas and Jetstar expect to average 107 and 120 per cent respectively of their pre-COVID domestic capacity in FY22.

Despite this, the airline still expects a loss of $2 billion this financial year.

The group’s target of an annual cost reduction of at least $1 billion by FY23 is on track, with $600 million expected to be delivered this financial year.

To make these savings, the airline will shed “several hundred” international cabin crew members through voluntary redundancy applications on top of a two-year wage freeze.

The airline will also lower front-end commissions paid to travel agents on international tickets by 80 per cent from July 2022.

“Travel agents remain an important partner and Qantas will work them on broader revenue opportunities, particularly through technology,” the airline said in a statement.

The Transport Workers Union (TWU) has slammed the national carrier for “cutting more jobs and bypassing enterprise bargaining”.

“Qantas management is acting like a dictator, using public resources to shore up its position, cut jobs and impose unilateral decisions on its workforce,” Michael Kaine, TWU National Secretary said.

“There is a system of enterprise bargaining in place so that both sides can sit down and compromise. This announcement to the ASX flies in the face of enterprise bargaining and should ring alarm bells to the Government and investors that Qantas is out of control.”

This came a week after Qantas announced it would push back its planned restart of international travel beyond the trans-Tasman bubble from the end of October to late December.

Speaking at Adelaide Airport a week before the date was pushed back, Qantas Group CEO Alan Joyce voiced his concern over the federal government’s reluctance to restart international travel, warning that Australia could become a “hermit” if the border continues to remain shut.

On the flip side, Virgin Australia also made some big announcements this morning, announcing 250 new jobs, five new routes, and increased frequencies, adding more than 700 extra weekly flights across the airline’s domestic network by October.

The announcement could not have come at a better time for Virgin after its CEO Jayne Hrdlicka landed in hot water for arguing that Australia should open its borders even if “Some people may die” earlier this week.

Northern Australia’s economy will benefit most from five new direct services between Sydney-Darwin, Sydney-Townsville, Adelaide-Cairns, Melbourne-Townsville and Perth-Cairns, as well as extra flights on existing routes for travellers.

On top of the 370 cabin crew roles announced last month, Virgin Australia will grow its team and recruit at least 250 new team members over the coming months across its operational and corporate workforce.

Virgin Australia will also boost flight frequencies to key Queensland destinations by 40 per cent, including Brisbane, the Whitsunday Coast, Hamilton Island, Cairns, Townsville, the Gold Coast and Sunshine Coast.

Travellers to and from Tasmania will benefit from an additional 50 weekly flights to Launceston and Hobart by October, an increase of 38 per cent on our current schedule.

Services on the “triangle” (Sydney-Brisbane-Melbourne) will be ramped up to support corporate and small to medium-sized business travel with an average of 100 flights every day by October, an increase of 30 per cent on today.

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agent commission alan joyce jayne hrdlicka job cuts Michael Kaine qantas twu virgin wage freeze