Around 19,000 EBA-covered Qantas Group employees will be offered a one-off boost of $5,000 as the national carrier shares the benefits of its recovery.
The Group today released a market update showing its net debt – which rose to more than $6.4 billion as the company borrowed heavily to survive the pandemic – had fallen well below pre-COVID levels to around $4.0 billion. Travel demand remains strong and the Group is on track to return to profit in FY23.
The one-off recovery boost is in addition to permanent wage increases of two per cent[1] currently being negotiated across the Group, which follow a two-year wage freeze for all personnel.
This payment also comes on top of 1,000 share rights awarded to non-executive employees – worth around $4,500 per person at today’s share price – as part of a Recovery and Retention program announced earlier this year. These shares will vest in August 2023 if key conditions are met.
The recovery boost will be made to employees after a new enterprise agreement is finalised; nine agreements covering around 4,000 employees have been finalised already and they will receive the recovery boost shortly. Consistent with previous discretionary payments, eligibility conditions will apply.
Management and senior executives are not eligible for this payment.
The cost of the payment to the Group is estimated at around $87 million in FY22.
CEO COMMENTS
Qantas Group CEO, Alan Joyce, said: “It’s been a tough few years for everyone in aviation but we promised to share the benefits of the recovery once it arrived. Today’s announcement is part of that.
“For our people, the recovery really started last December when we made the decision to bring everyone back to work ahead of schedule and well before all borders opened.
“In February, we announced a bonus scheme that gives employees at least 1000 shares in the national carrier if key conditions are met, which are on track.
“Today, we’re announcing a one-off payment that goes some of the way to acknowledging the sacrifices our people have made, including long periods of no work and no annual wage increases. It also recognises the great work they are doing as we restart the airline, which has been challenging for everyone.
“This comes at a time when travel demand is rebounding but our people are facing a unique set of cost of living pressures, which frankly they’d be in a better position to handle if aviation hadn’t been so badly hit over the past two years. That’s now changing.
“We can’t afford to permanently increase salaries beyond the two per cent threshold we’ve set, but we can afford to make this one-off payment on top of the Qantas share rights we’ve already given.
“Getting our permanent cost base right is how we’re able to reinvest, which ultimately means more opportunity for our people.
“The structure of our business means many of our people see their salary increase significantly as their careers progress. That progression often relies on the business growing, so the recent investments we’ve announced in new aircraft and new ventures will see employees share in the benefit as the national carrier enters a new phase,” added Mr Joyce.
The Qantas Group has announced cumulative losses of around $6 billion since the start of the pandemic and expects to post another significant annual loss for FY22 but has seen a material improvement in the second half of the year as travel demand rebounds.
[1] Most EBA-covered employees will also receive a company-funded 0.5 per cent increase as part of the Superannuation Guarantee from 1 July 2022.
