Qantas should not have to pay back billions in COVID-19 aid, Treasurer says

After Qantas posted record profits, Treasurer Jim Chalmers says the airline should not have to pay back the money it received during the height of the pandemic.

Qantas reported a $2.47 billion underlying profit on Wednesday. Source: AAP, AP / Mark Baker

Key Points

• Australia's biggest airline announced a "remarkable turnaround" in 2022/23, earning billions of dollars in profits.
• CEO Alan Joyce celebrated the fact consumers were willing to spend more on travel "despite cost-of-living pressures".
• The federal treasurer says Qantas shouldn't have to pay back the taxpayer money it received during the pandemic.

Treasurer Jim Chalmers has rejected suggestions Qantas should pay back the money it received from the government after the airline posted record profits.

On Thursday, Qantas reported an underlying profit of $2.47 billion for the past financial year, compared with an almost $2 billion loss the year before.

But the Flying Kangaroo is under pressure in the wake of the results to pay back money it received from the federal government at the height of the COVID-19 pandemic.

It received $2.7 billion from taxpayers during the pandemic, including $900 million from the JobKeeper program.

The profit report came as Qantas and its chief executive Alan Joyce (pictured) face fierce criticism over alleged price-gouging, customer refunds and government bailouts. Source: AAP

The airline's chief executive Alan Joyce said it was just 11 weeks away from bankruptcy at the time.

But Chalmers said the profits from Qantas showed the tourism industry was making a strong recovery post-COVID.

"When those funds were provided by the previous government, there wasn't an understanding or an agreement that they would be repaid in some form," he told ABC Radio on Friday.

"What (the profits) reflect is the fact the Australian tourism industry is making a big contribution to our economy and that's a good thing.

"It's a big employer in our economy."

Joyce said the JobKeeper funds from the government went to its employees.

"As we're making money, we'll pay corporation tax and getting there faster," he told the ABC's 7.30 program.

"Should our people who got the money for JobKeeper pay that back?

"I'd say no because that's asking them to pay it back in a difficult period of time, so what money do we pay back exactly?"

Joyce, who has been summoned to appear before the Australian Senate's cost-of-living inquiry next week, said economy fares had dropped 12 per cent since peaking last December.

Opposition leader Peter Dutton said Joyce had led the airline well during a difficult period, which included the pandemic.

"It was a tough period for those airlines, to be able to keep the company afloat during that period with the support of a lot of taxpayers money, I think that will be one thing that (Mr Joyce) chalks up," he told Nine's Today program.

What fuelled Qantas' record profits?

The profits for the 2022-23 financial year were fuelled by falling jet fuel prices, high travel demand and high airfares. They also contrast with the airline’s $1.86 billion loss the previous year, following a COVID-induced slowdown of travel.

Joyce described the result as a "remarkable turnaround".

“Fundamentally, travel demand is extremely robust … Despite cost-of-living pressures, survey data shows people are planning to spend more on travel over the next six months and less on homewares, renovations and even alcohol.”

Off the back of such positive results, Qantas said it would return another $500 million to shareholders and issue all staff $500 worth of travel credit.

The profits came in a year in which airfares soared.

A June report from the Australian Competition and Consumer Commission (ACCC) revealed the average return price for economy-class international airfares from Australia had increased by more than 50 per cent compared to pre-COVID levels - soaring to $1,827 from a 2019 average of $1,213 - despite the price of jet fuel almost halving over the previous 12 months.

It also noted the ways in which the duopoly between Qantas (which also owns Jetstar) and Virgin Australia was contributing to high prices.

An ACCC report said Qantas and Virgin had benefited from a lack of competition in the domestic aviation sector. Source: AAP / Con Chronis

In May, upon learning of forecasts that Qantas would record underlying profits around the $2.5 billion mark, the Transport Workers Union (TWU) called on the airline to pay back the government support it received during the pandemic – a period during which it also laid off thousands of staff.

"This obscene profit forecast is the result of Qantas management bleeding dry workers, passengers and the tax-paying public,” TWU national secretary Michael Kaine said at the time.

Qantas is also facing a class action lawsuit over its refund policy for flights cancelled due to the pandemic, which resulted in customers being allocated travel credits instead of cash refunds.

Lawyers in the class action allege that this allowed the airline to treat its customers’ money as more than “$1bn in interest-free loans,” and accuse the company of being “unjustly enriched by holding a very significant quantum of customer funds that it ought to have refunded”.

SBS News contacted Qantas for comment.