Pressuring Qantas to repay government subsidies received during the COVID-19 pandemic is an interesting issue and I've seen valid arguments for & against. However IMO Qantas simply used subsidies to keep its operations afloat and preserve jobs in an industry that was on the brink of collapse (although many jobs were lost, it could have been alot worse).
i think it's worth noting that many of the subsidies and financial support programs provided to businesses during the pandemic were not explicitly structured as loans but rather as emergency aid aimed at securing the broader economy during CoVid. Millions of Australians and other businesses received government subsidies, should they be expected to reimburse the government (over and above tax obligations) if they succeed 'too much' in their next tax return?
Qantas, like numerous other companies, operated with the understanding that these subsidies were intended to ensure survival, not as loans with repayment obligations. If the government intended to seek repayment, it should have clearly stipulated this in the agreement (I don't think they did, but correct me if I'm wrong).
If Qantas were to be pressured into repaying subsidies, it could set a precedent for other airlines/industries that received similar government support.
Additionally, plenty other (international) airlines also received government support during the pandemic. Forcing Qantas to repay subsidies would put it at a competitive disadvantage compared to foreign carriers that haven't been pressured (AFAIK) to repay their bailouts.
Here are a couple of articles showing the extent of bailouts offered to airlines around the world during CoViD.
https://www.nytimes.com/2020/04/14/business/coronavirus-airlines-bailout-treasury-department.html (Article describes a USD $25bn package for US based airlines - and I think a further $25bn was comitted later on after this article?)
https://www.businesstraveller.com/features/these-airlines-have-received-a-bailout/ (Article outlines the multitude of global airlines that received a bailout during CoViD)
Vilifying success and resenting large corporations for their substantial profits is a pretty common sentiment, particularly in times of rising living costs and inflation. It's understandable that people question the fairness of Qantas' record profits and Alan's pay packet, especially when they might be struggling to make ends meet. However, IMO it's worthwhile to acknowledge that these companies play a significant role in local economies by creating job opportunities and contributing to economic growth; Ability to generate substantial profits is often the result of efficient business practices, innovation, and economies of scale - and usually not the result of unfair services or malpractice (although we'll see the outcome of ACC's investigation). It's not the company's responsibility to reign in their profit just to make the population feel better.
Qantas is basically Australia's only airline (Virgin was bought by Bain Capital in 2020 (US based). and Rex, with a market cap of ~$100m, has strong international ties (i.e. the Lim family still appear to be the biggest shareholders of Rex since they took over 2010, although correct me if I'm wrong, source:
https://www.forbes.com/global/2010/0719/best-under-billion-10-rex-airlines-australia-singapore-savior.html?sh=53237a835269) I believe there is legislation that prevents qantas from being majority-owned by foreign entities, as part of the conditions of when it was privatised in the 90's (again, correct me if I'm wrong).
If Qantas doesn't survive, I think it will be a shame and leave a massive gap in the Australian airline industry.
That's not to say we shouldn't criticise companies, in this case, Qantas, when they deserve criticism (ACC investigation/cancelled flights/Qatar flights etc) ; but I quite liked Steve Price's perspective given during a recent interview:
"it remains a safe airline with a great international brand."I just think we need to be a little cautious about slamming it," Mr Price told Sky News host Caleb Bond."We shouldn't be ashamed of profits, but we should let competition rule as it should."
https://www.skynews.com.au/opinion/steve-price-warns-against-slamming-qantas-despite-its-effective-lobbying/video/f4f0738e1ddb13710420dd519a135188"Be greedy when others are fearful" - I think when this news cycle dies down, and the outlets focus attention on vilifying the next corporate success story - it will represent a good buying opportunity for the QAN stock, which seems to have been slammed despite 'record' profits and good business fundamentals. I'm personally hoping that in a few months time, when the $500m Share Buy Back is taking place, the share price will have bounced back and the price action on the stock we see today was all due to the press cycle, and not due to any shift in fundamentals with regard to the business/operations.
(20min delay)
