Yikes.
Qantas CEO Alan Joyce is known for being an outspoken supporter of issues he is passionate about, whether it is standing up to union officials by grounding the entire Qantas fleet many years ago, or supporting marriage equality.
This time he’s fighting with the operators of the only airport in Australia’s capital city, Canberra. Qantas is the airport’s biggest tenant. The war of words started a year ago, when a Qantas Boeing 737 flight from Auckland to Sydney diverted to Canberra, because of poor weather in Sydney. Once it landed, Canberra Airport operators apparently parked a car behind the plane and demanded that Qantas immediately pay AUD$18,000 by credit card as a diversion fee, before it would remove the car and allow the plane to move.
Qantas argues that similar sized airports would only charge AUD$2,000 for an equivalent diversion.
You’d think a capital city airport and its largest tenant would have slightly better payment terms than this, wouldn’t you? It turns out Canberra Airport and Qantas used to have such a written agreement for diversions such as this, but that agreement had lapsed at the time of the diversion. Canberra airport says it charged such a high diversion fee to ‘dissuade’ airlines from making unscheduled diversions.
I suspect the Qantas pilot who forced the diversion was probably more concerned with passenger safety than diversion costs.
Why don’t they like each other?
As I understand it, to attract lucrative corporate and especially government passengers, Qantas schedules many flights each day, especially to Sydney and Melbourne. This makes them appear to have very regular and convenient schedules.
Makes sense, right?
The problem is that they seem to schedule far more flights than they actually intend to operate, because they then combine passengers onto fewer flights if they can’t fill every plane, and then cancel three to four times as many flights as the national average (i.e. other carriers at other airports). Canberra Airport obviously budgets their revenue and statistics around most, if not all flights actually operating so have been unhappy with Qantas about this tactic for some time.
Equally, Qantas is apparently not happy with the service they receive from Canberra Airport, especially as they are the largest tenant.
So it sounds like a bit of a chicken-and-egg situation — the airport dislikes Qantas’ high cancellation rates, while Qantas is not really encouraged to reduce these cancellation rates, while they are unhappy with the services they are paying for.
Canberra Airport has acknowledged that Qantas cancellations from Canberra have improved over the last 12 months.
The latest words
The Canberra Times is reporting that at a recent aviation industry event, Alan Joyce discussed last year’s diversion event to the audience, and in explaining how their 737 had been blocked by the airport operators car he said:
“Maybe the airport should be called ‘The Canberra Pirates’ because you wouldn’t have this in Somalia. You wouldn’t have this in other parts of the world. It is unbelievably appalling behaviour. They actually ransomed one of our aircraft”
Wow.
Bottom line
It’s not unusual for airline executives to speak out publicly about issues they are passionate about — we’ve seen the US3 vs. ME3 battle get very heated.
But for Alan Joyce to compare Canberra to Somalia certainly steps it up a gear. I would hate to be the Qantas Canberra Airport Manager going in to work today.
Which side do you support?
Perhaps it is rather bad business practice on QF's part not to have a diversion agreement in place with CBR Airport. A number of aircraft do get diverted to CBR.
Perhaps also CBR Airport should be smart enough to have remedy clauses if QF fails to act in good faith per the contract.
FWIW it's a pathetic tactic for a CEO to attempt to malign another business in the public arena - but a tactic...
Perhaps it is rather bad business practice on QF's part not to have a diversion agreement in place with CBR Airport. A number of aircraft do get diverted to CBR.
Perhaps also CBR Airport should be smart enough to have remedy clauses if QF fails to act in good faith per the contract.
FWIW it's a pathetic tactic for a CEO to attempt to malign another business in the public arena - but a tactic previously used to discredit other parties to undermine negotiations. A terrible beat up in the case where the airport operator appears to be claiming there was a 8 minute incident.
Any further meaningful comment would require direct knowledge of the contracts between QF and CBE Airport, QF's previous payment record, etc.
I hope that you have evidence that QF is indeed consolidating flights for commercial gain at the expense of its passengers - you wouldn't want a libel lawsuit?!
The solution is simple. The airport should charge Qantas based on the flight schedule 90 days prior. If Qantas cancels after that, Canberra airport still gets paid in full. This would have the additional benefit to the customer of having less cancelled flights. If flights are consistently cancelled, it must be extremely annoying for customers to have their lovely reserved seat changed to a miserable seat on a flight that they didn't want to begin with.
interesting about the cancelled flights situation to fill other planes I wonder does this same thing happen out of Auckland to Sydney because incredibly once when I flew from Chile to Auckland I was meant to go back to Perth via Sydney on a 737 then A330 but flight was canceled and they put me on Air NZ direct to Perth, I wonder why they didnt shove me on a Brisbane or Melbourne flight. Cant...
interesting about the cancelled flights situation to fill other planes I wonder does this same thing happen out of Auckland to Sydney because incredibly once when I flew from Chile to Auckland I was meant to go back to Perth via Sydney on a 737 then A330 but flight was canceled and they put me on Air NZ direct to Perth, I wonder why they didnt shove me on a Brisbane or Melbourne flight. Cant complain the direct journey in J with Air NZ was amazing I cant believe I had this luck.
Australian airport operators unscrupulously exploit their monopoly position as major airports. The airport fees for travelers and airlines are some of the highest in the world and airport operator profits are off the charts. If Australia's biggest airline has no leverage against them something went wrong...
I was just there (flew Virgin). A lovely little airport from a passenger pov.
Can Air France just ground the whole fleet for an unlimited time until those unions come to some sort of agreement?
Qantas can use their chase ink unlimited card and that’s 27k ultimate rewards points for them :p
@ chub - great idea for a follow-up post hahaha.
With all respect, this blog posts the same news - anything and everything related to AU - before AUSBT does, so please keep doing what you're doing as I enjoy the narrative on the news.
“because they then combine passengers onto fewer flights if they can’t fill every plane”
Borderline libellous perhaps?
What facts did you use to form these views? Do you know the reasons for the cancellations?
As someone who used to manage what was back then the only international airport in Somalia, I can confirm he is correct that something like that would never happen in Somalia.
Our diversion fees were only around $2600 including handling for a B737, but we never had a crew who wasn't willing to pay whatever we asked for in order to be allowed to leave as soon as possible. :)
Our biggest international operator...
As someone who used to manage what was back then the only international airport in Somalia, I can confirm he is correct that something like that would never happen in Somalia.
Our diversion fees were only around $2600 including handling for a B737, but we never had a crew who wasn't willing to pay whatever we asked for in order to be allowed to leave as soon as possible. :)
Our biggest international operator back then was Turkish Airlines and they had monthly credit for regular and diversion flights.
I flow QF from CBR - PER in January this year and QF lounge is nice and the airport is a nice little airport though surely Qantas and Canberra airport can make some sort of agreement
Good airline but now Qantas knows what it is like to be taken advantage of
I feel the same way some of the time as a member of their FF program
I wonder if the airport will charge a credit service fee for the 18k
What goes around comes around ;
There might be some merit in his views on this issue but sadly it's the case that Joyce is a creepy little toad and his number one priority is looking after himself. The recent success of Qantas is a consequence of things largely unrelated to Joyce: most significantly the "rivers of gold" routes up the east coast ( MEL-SYD-BNE are among the most heavily traveled domestic sectors in the world) , the success of which...
There might be some merit in his views on this issue but sadly it's the case that Joyce is a creepy little toad and his number one priority is looking after himself. The recent success of Qantas is a consequence of things largely unrelated to Joyce: most significantly the "rivers of gold" routes up the east coast ( MEL-SYD-BNE are among the most heavily traveled domestic sectors in the world) , the success of which is attributable to his predecessor ( and then largely flowing from the collapse of Ansett).
Qantas International is break even, at best, nothwithstanding the toad's gloating and posturing.
Australian airports are owned by banks, ie the most duplicitous, morally bankrupt corporations. Unsurprising that they engage in blackmail and 'piracy'.
This will be posted onto AUSBT like all your other posts (but never credited to you) in a few hours....
@ Mooch - I have a great professional relationship with David Flynn who is the editor of AusBT, and we regularly share ideas and news back and forth.
I’ll just fly Virgin