COVID-19 in 2020 put the aviation industry under a severe financial strain, having a shortage

of human resources owing to reduced flying (Anh 2022). In that challenging environment,
Qantas Airways (Qantas), one of the few businesses, was not severely affected and swiftly
retained earnings due to utilising appropriate cash flow (Supportah TV 2022). This airline,
known as ‘The Flying Kangaroo’, is Australia's largest domestic and international carrier,
developing with core values, such as togetherness, genuineness, inventiveness, optimism, and
experience, in pursuit of promoting the Spirit of Australia (Hogan 2022). Qantas announced a
recovery plan with a concentration on human factors to uphold the reputation and stability post-
COVID-19 (Qantas Group n.d.). However, this plan faced accusations of violating Qantas's
business principles through unlawful layoffs and substandard services (Thorpe 2022). This
report examines the moves made by Qantas to update their fleet in 2022, the ethical
considerations that influenced their decision-making process, controversial judgments
regarding their services and eventually provide recommendations for improving the airline's
operations based on insights gained from their strategic initiatives.
In 2020, the pandemic wiped out 168 billion USD in economic losses from the global airline
industry (Bouwer, Krishnan, Saxon, and Tufft 2022). Qantas's revenue loss from COVID-19
topped 16 billion USD due to low overseas travel and local border restrictions (Qantas 2021).
Despite these challenges, Qantas adopted a three-year strategy to rebuild a robust foundation
for future growth and shareholder value (Qantas Group n.d.). This strategy involved rightsizing
the airline's workforce, fleet, and other expenditures based on demand estimates, implementing
cost-saving measures, and strengthening financial stability (Qantas 2021). However, Qantas
faced criticism for deviating from its commitments when it sacked employees in several
departments and employed inexperienced third-party counterparts in the cost-cutting effort
(Visontay 2022). This move caused staff shortages and unprofessional services when the border
reopened, resulting in airport chaos, including issues like lost luggage, extensive delays, and
flight cancellations (Supportah 2022). These incidents have shown that Qantas places
importance on making profits to secure its survival, even if it means compromising the stability
of its stakeholders.
Qantas disclosed a 3-year strategic arrangement for the reinstatement coping with the aftermath
of COVID-19 (Qantas 2020), where the airline recorded an astounding loss of roughly 4.82
billion USD (Doran 2022). The plan primarily aimed to restructure the operations to economise
up to 1 billion USD annually, with a high aspiration of achieving 15 billion USD in profitability
(Qantas 2020). Core components encompassed the abandonment of about 15.000 employees
in business domains, mainly the international sections until travel resumed, the retirement of
six Boeing 747s, and the landing of 100 aircraft within 12 months (Qantas 2020). Furthermore,
Qantas, being an airline, faced limitations on cost-cutting options. Reducing expenses by
eliminating routes or purchasing fuel-effective aircraft was unviable in light of the airline's
plans to offer non-stop long-haul flights. Consequently, the reduction of staff costs emerged as
the preferred alternative (Galvin 2022).
Qantas, in pursuit of profitability for survival during the pandemic, made strategic decisions
that drew criticism. The airline implemented workforce reductions, starting with retrenching
1,700 ground handlers (Visontay 2022). Qantas subsequently terminated 2,000 workers and
subcontracted the ground staff jobs with the third-party Swissport, an outsourced ground
handling agency now responsible for most of Qantas's ground-related operations (Seet 2022).
The completion of the recovery program effectively facilitated the notable turnaround in the
profitability of Qantas (Nair, Iyer, and Menon 2023). The airline expounded on the
appropriateness of this outsourcing process owing to its annual commercial savings of labour
expenses, adapting to the post-COVID-19 fluctuating market (Baird and Marin-Guzman 2022).
Nevertheless, this strategic bounce back appeared to be a vicious and unethical settlement for
survival in the wake of the COVID-19 outbreak (Bartholomeusz 2020). The axe of 2,000
employees was driven by the fact that most of the sacked workers were members of the
Transport Workers' Union (TWU), indicating that they had high bargaining power. Therefore,
the airline attempted to disassociate itself from the impact of the TWU to avert potential wage
negotiations (Visontay 2021). The related workers got the capabilities of maintaining
employment by presenting persuasive arguments that the cost of their work was less costly than
that of the third parties. Qantas, however, promptly declined this bid set by TWU (Hatch 2020).
Furthermore, the airline declined arguments saying that its actions were unlawful, asserting
that the axed workers lacked the right to take protected industrial actions at the time of
publishing the outsourcing strategy (Knaus 2023). Qantas's excuses proved the disrespect for
dedicated employees, one of the key stakeholders, and suggested that the airline interpreted
them as expendable trade-offs for its priority of financial recovery post-COVID-19.
Consequently, a considerable proportion of employees encountered severe job-related
hardships as implications of Qantas's strategy. About 47% of terminated Qantas workers faced
difficulties in long-term job opportunities, with some relying on precarious employment (TWU
2022). With the driving ambition of reaching massive profitability after COVID-19
(Bartholomeusz 2020), Qantas made the decision to dismiss thousands of its skilled workers,
who were extensively trained to meet the high-quality standards in years. A TWU survey
revealed that over half of those employees have around ten years of work experience, with 71%
engaged in the baggage-handling process within the on-ground room or on aircraft (TWU
2022). However, the airline substituted them with inexperienced counterparts from third parties
for the sake of low staff-related costs (Hatch 2020). This course of action brought disgrace on
the airline since it engendered disillusion and outrage among the crew members and staff, who
perceived their loyalty as being exploited (McPhee 2022). The sacked workers, moreover, have
been classified on the blacklist of the aviation industry with the background of experiencing
inexplicable rejections from the third-party organisation, Swissport (TWU 2022). Qantas was
later confronted with a range of desperate shortages, compelling the airline to call for the fill-
in by requesting senior executives to sacrifice high-costed positions and assume work as
ground-handling workers to alleviate the scarcity (AAP 2022). The whole series of Qantas's
actions have negatively defining characteristics of acting Utilitarianism, a family of normative
ethical theories that illustrates the high priority of outcomes irrespective of in-process choices
not being rule-based business moralities (Duignan and West 2023).
Qantas, with over 60% of Australia's market share (Butler 2022), faced a crisis of complaints
from passengers due to a perceived lack of emphasis on human-centric practices. According to
the Australian Competition and Consumer Commission, Qantas witnessed a substantial surge
of 68% in public grievances in March 2022 compared to the corresponding period of the
previous year (Thorpe 2022). Qantas experienced a high volume of passenger traffic upon the
reopening, where utilisation of the airline serviced at a heightened degree of frequency. These
inconveniences caused a complication and dissatisfaction for passengers as they were
frequently stuck in crowded places, resulting in a shortage of personnel (Anh 2022). These
underlying factors, accompanied by the implications of the staff-cutting process, contributed
to the high rate of Qantas flight cancellations, reaching approximately 7,1 percent on 22 June,
as shown in Figure 1 (Baird 2023). In May 2022, a single Qantas flight out of a total of thirteen
was cancelled, with approximately 600 domestic flights and a significant portion of 148 flights
on the Sydney-Melbourne route (Thorpe 2022). These indicators prove that Qantas has ranked
first in the comparison of flight cancellation rates, as shown in Figure 2. The inconsistency of
the airline's flight schedule forced extensive queues of passengers for a duration of about ninety
minutes, frustrating interactions with customer service (Thorpe 2022). Following the
notification of flight cancellation, some customers attempted to contact Qantas. However, it
took them almost ten hours to receive responses from the airline (Han 2022). Therefore,
customers experienced mental and emotional distress due to the postponements, contributing
to bad sentiments toward Qantas (Kelly 2022). They simultaneously were forced into a passive
position and experienced annoyance as they had to rearrange their plans to match Qantas's
adjustments (Kelly 2022), which violated Consumer Rights to be Informed, empowering the
freedom of customers (European Commission n.d.).
The rise in customer complaints was attributed to the airline's choice to substitute experienced
staff with externally contracted employees who exhibited shortcomings in the understanding
of the complexities inherent in Qantas operations (Supportah 2022; Yun 2022). Therefore, a
significant number of customers' belongings were lost and severely damaged (Saunokonoko
2022). After receiving customer complaints about shortcomings in ensuring customer rights,
the airline swiftly and categorically refuted a claim stating that only six people out of a total of
1,000 customers fell victim for improperly handling bags (Hyde 2022). However, the rate of
lost luggage was estimated to be one out of every ten items, according to the information
provided by a baggage handler (Visontay 2022). The airline had not been successful in making
judgments that prioritised the needs of its passengers, and it had not yet taken measures to
protect the legal rights of its clients when they made use of the service.
When customers' patience regarding limitations and service reached its peak, they conveyed
their dissatisfaction and characterised the wait as an unfavourable ordeal on the online platform
(Soper n.d.), asserting that the airline had departed from its traditionally renowned high
standards. A female client composed a publicly scathing correspondence, perceiving Qantas's
actions as unpleasant behaviours (Taylor 2022). Qantas' initial approach was to maintain the
state of silence to the point where this post became viral, the airline later gave an explanation
about their shortfalls (Taylor 2022). The Chief Executive Officer of Qantas, Alan Joyce,
expressed regret to customers in response to the occurrence of flight cancellations, incidents of
misplaced baggage, and significant delays in their call centre operations (Han 2022). But it
continued to arouse a wave of criticism because people believed that this was essentially dirty
media behaviour and manipulation of public opinions. Furthermore, many people argued that
Qantas would only address complaints from Twitter users who possessed a significant
recognition or notoriety (Hirst 2022). The airline only prioritised serving a particular group of
consumers who, according to the company, posed a greater risk to their reputation; this
indicated that the Managerial Stakeholder theory, a narrow view of the Stakeholder Theory
referring to the focus on groups or individuals being vital to the success of the business (RMIT
University 2023), was being applied and exacerbated customers’ displeasure.
Qantas suffered a significant blow to its reputation due to a staff-related lawsuit with TWU, a
union representing thousands of employees in the airline industry, in the effort of recovery
(Khadem 2022). A recommendation for Qantas is to collaborate with TWU and altogether
strive for suitable resolutions rather than confront this union. Through cooperation, they can
provide assistance packages to workers who experienced harsh conditions due to the staff-
cutting process. Outplacement services should be provided to axed employees as compensation
since the airline’s survival strategies directly worsened their living conditions. Most of these
people are in the working class with low incomes, highlighting the significant impact of jobs
in Qantas on their livelihoods (Khadem 2020). Henceforth, these remuneration packages can
function as a priceless aid in unearthing novel job prospects and reclaiming fiscal equilibrium.
Furthermore, severance pay could alleviate the burdens that employees suffer during the period
of finding alternative jobs for a living. Working with TWU will ease the financial compensation
packages, allowing Qantas to balance its recovery efforts. By applying this recommendation,
Qantas could build a positive relationship with key stakeholders and demonstrate corporate
social responsibility on the basis of business ethics standards, emphasising the importance of
fairness, justice, and respect for individuals and the community (TWIN 2023).

Furthermore, to prevent future legal wrangling and pacify accusations of nepotism, Qantas
should scrutinise their decision-making protocols under the fairness and transparency.
Balancing these scales will serve them best by extinguishing suspicions that they preferentially
target unionised workers (Qantas n.d.). It should involve consulting with employees before
making decisions, sharing information about the process of determining actions, and providing
regular updates on the progress and outcomes. Qantas should base decisions on all aspects, like
performances or ethical considerations (Qantas 2023), discouraging any perception of
favouritism or bias in the decision-making process. Additionally, it would be beneficial for
Qantas to build communication channels and feedback systems (Healey 2016). These
mechanisms would enable employees to share their thoughts and express any concerns
regarding decisions that might impact them. These thorough steps establish loyalty and
engagement among workers, key stakeholders, ultimately bolstering productivity for high-
quality performances and benefiting the prosperity of Qantas in the long run.
A valuable lesson from Qantas for other companies is the importance of avoiding litigation and
seeking harmonious resolutions during unforeseen disruptions in business. Qantas has
demonstrated the negative consequences of engaging in battles with governmental entities,
which include high costs, significant time consumption, and harm to a company's reputation
and stakeholder relationships (Visontay 2022). Hence, it is of utmost importance for companies
to grasp that governmental organisations can have profound influences as all companies
function within national jurisdictions. In the case of Qantas, a national airline, confrontations
with governmental entities tarnished not only its reputation but also the country's image.
Besides that, huge and powerful organisations like TWU, representing employees across
various industries, further have a direct impact on the operations of the company (TWU n.d.).
Any friction or disputes with such organisations can make it challenging to run effectively and
achieve business objectives in the future. Therefore, it is crucial for companies to concentrate
on collaboration, dialogue, and mutually beneficial resolutions to maintain positive
relationships, ensure smooth operations, and uphold their reputation.

Another key lesson learned from Qantas during COVID-19 is the need to treat employees as
partners in the company's recovery plan rather than interpreting them as a trade-off for survival.
In its relentless quest to surmount the formidable challenges, Qantas executed harsh decisions
regarding employee management (Bartholomeusz 2020). This caused unforeseen
consequences, negatively affecting the reputation of the company. Since Qantas focused on
making a profit, its cost-cutting method neglected the importance of employees, who represent
the face of the company, as the airline replaced them with inexperienced ones. The low
productivity of replaced workers had a significant impact on the overall performance of the
firm, impacting low-quality services, customer dissatisfaction, and ultimately affecting
profitability (Thorpe 2022). It unintentionally backtracked on the airline's initial economic
recovery efforts. Thus, it is of utmost importance for companies to exalt the alliance with
employees, deliberate upon their enduring worth, and dedicate resources to their growth, even
in the face of hardship, to cultivate fortitude and guarantee sustainable success.
Qantas strategically had a recovery plan to alleviate the repercussions of COVID-19, regaining
the top-tier position in the Australian airline market. Nevertheless, Qantas’s strategy pursued
profit-making and cost-cutting methods that failed to be aligned with business ethics,
displaying an unethical corporate vision and a lack of human-centred approaches. With the
processes of cutting and substituting staff, the airline disregarded loyal and skilled employees,
which caused a significant deterioration in in-flight service quality. It ended up with multiple
operations troubles, such as labour shortages, the loss of luggage, significant delays, and a high
frequency of cancellations. Qantas should consider propositions for further proper
enhancement, including the positive collaboration with TWU about assistance packages and
the emphasis on fairness and transparency to avoid legal issues. Additionally, by observing the
experiences of Qantas, other companies can acquire some valuable lessons, avoiding
unfavourable lawsuits against influential organisations and acknowledging the considerable
influence of employees on the success of businesses.