Qantas Airways Ltd. came within 11 weeks of financial collapse at the height of the pandemic when travel came to a standstill and the airline continued to hemorrhage cash, Chief Executive Officer Alan Joyce said.
At a lunchtime speech in Sydney on Monday, Joyce said that in early 2020 he was receiving weekly reports from his finance team that made clear how long the airline’s reserves would last. Qantas’ minimum life expectancy gradually lengthened to two years after it raised capital, sold land and cracked down on expenses, he said. Rival Virgin Australia collapsed at the same time.
Joyce’s disclosure in some ways counters criticism that he cut costs — including more than 8,000 workers — too aggressively during Covid-19, leaving the airline struggling to cope when demand eventually rebounded. With a shrunken workforce, Qantas has this year been plagued by flight cancellations, lost bags and delays.
“People forget how low everything was back in March, April, May, June 2020,” Joyce said. “There was no vaccine. There was no hope that it could be as effective as it was. We had to stare into this 11 weeks of survival.”
Qantas has now built in buffers to help service levels get back to normal. There are 20 aircraft set aside and ready to be deployed at any time should operational problems arise, he said.
Still, supply-chain snarls are troublesome and may not be fully resolved for 18 months, he said. It’s hard to obtain spare parts, sometimes putting jets out of action for days compared with a matter of hours before the pandemic, he said.
Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.
