The Qantas Alan Joyce leaves behind

Samantha Hawley: Hi, I’m Sam Hawley, coming to you from Gadigal Land. This is ABC News Daily. We used to think of it as the spirit of Australia. But in recent years we’ve had much more of a love hate relationship with Qantas. Now the man at the helm is on his way out. Today, investigative reporter Stephen Long on how Alan Joyce changed our national carrier and whether our flying experience will improve now he’s going. Stephen, Alan Joyce, he’ll be gone by the end of the year from Qantas, but my gosh, he’s been there for a long time, hasn’t he?

Stephen Long: It almost seems like he’s been there forever. 15 years as CEO by the time he departs, Sam, which by the standards of corporate Australia is remarkable longevity. We usually see CEOs turnover about every 4 or 5 years.

Samantha Hawley: Yeah, he’s a stayer for sure. Okay, so when he was appointed, it was quite a moment, really, a gay Irishman taking over the Australian carrier.

Alan Joyce: And it’s a credit to this country that a gay Irish man was appointed 15 years ago to be CEO of the company. And now we have the first female and it’s a credit to the board.

Samantha Hawley: It was pretty progressive.

Stephen Long: Yes, I guess it was. And he was charming, he had that wonderful Irish lilt. And you had this charming man and little portent of quite the divisive figure he would become in Australian society over the years.

Samantha Hawley: There were sort of two sides to him, wasn’t there? Because there was the businessman and then there was the human. And I think we all remember he really campaigned heavily in favour of same sex marriage.

Stephen Long: Yes. You have a man who is Catholic, who is gay and fought very hard for the rights of gay, lesbian, trans people.

Alan Joyce: I fundamentally believe if you believe in a fair go for all Australians, you should vote yes. And if you believe in love and commitment, you should vote yes.

Samantha Hawley: Okay. And I think we’ll all remember the day he was attacked by a Perth man who shoved a lemon meringue pie into his face because of his stance on gay marriage. That was a memorable moment indeed.

Alan Joyce: Here to announce the…I might take a break for a second, guys, and just clean up a little bit.

Stephen Long: Some would say a supporter of human rights for people in terms of their sexuality or minority status, but not a great supporter of workers rights.

Samantha Hawley: Okay. So let’s now have a look at his running of the airline of Qantas because as you say, there was sort of two sides to this man and he was never really far away from controversy, was he?

Stephen Long: He was at the centre of one of the biggest controversies in Australian Labor relations history. Qantas has been in.

Reporter: Dispute with three unions over pay and job security for months. It’s complicated and protracted. It involves long haul.

Stephen Long: Qantas was in dispute with its pilots, with its maintenance workers and key ground staff are ongoing. Low level industrial action that was nonetheless causing a lot of inconvenience and costing a lot of money. In response to that, Joyce went nuclear. He took the nuclear option and in late October of 2011, in the lead up to the Melbourne Cup, when a lot of people are flying in Australia, he grounded the entire Qantas fleet domestically and internationally.

Alan Joyce: We have decided to ground the Qantas international and domestic fleets immediately. I repeat, we are grounding the Qantas fleet now.

Stephen Long: And essentially that was a tactic to force these disputes before the industrial tribunal where he and his advisers correctly anticipated that the union claims would not sustain and the unions lost the battle.

Captain Richard Woodward, from the Australian International Pilots Association: Negotiating with Qantas isn’t like negotiating with a bull elephant. They’re very intent on stomping on you, but not much else.

Stephen Long: And that paved a way for a lot of what was to come. But Qantas also suffered huge short term reputational damage. A lot of people thought this was not the Australian way and they also suffered big losses of money that contributed to a significant loss in the tune of $140 million and left passengers stranded around the world. It was big time stuff.

Passenger left stranded by Qantas: Well, we’re going to go and hire a car and rent a car and drive back and hope the roads aren’t full of other stranded Qantas passengers.

Passenger stranded by Qantas: I had no idea, I had no notification or anything.

Samantha Hawley: Yeah. Okay. And then let’s insert Virgin because of course, during that time many Australians saw another airline and of course they had to use another airline during that period. What did we see then?

Stephen Long: Basically Virgin tried to seize the opportunity and began cutting prices and that ultimately culminated in a massive price war between the airlines.

Reporter: Qantas counts the cost of its battle with the unions and political missiles continue to be fired around the fleet grounding. Virgin Australia is working overtime to capture a bigger chunk of the most lucrative part of the domestic market business customers.

Stephen Long: I mean, some people think it actually went close to sending Qantas to the wall. It slashed its fares so much that in the 2013/14 financial year it posted a $2.8 billion loss, which in the context of the time was huge. Virgin suffered as well, But ultimately, again, Joyce won that because they maintain, by and large, their market share.

Samantha Hawley: Okay, Now let’s fast forward, Stephen, to COVID because COVID hits and Qantas, just like every airline around the world, takes a really big hit.

Reporter: Grim day for Qantas with the airline posting a full year loss of $2 billion as COVID 19 continues.

Samantha Hawley: How does he respond?

Stephen Long: He responds in an interesting way, and one of the ways he responds is by seizing upon this to restructure the business and seize the day, to contract out some of its ground maintenance work to get rid of higher paid workers who were working as pilots, as as cabin crew. The losses were one side of it. The gains for Qantas in terms of enacting strategies that had been planning to do for years were the other.

Reporter: Qantas has stood down two thirds of its workforce. 20,000 workers now face an uncertain year. Boss Alan Joyce warned the future of the national carrier is at stake on what he called a terrible day.

Samantha Hawley: Yeah, right. Okay. And then, of course, we all start flying again when the restrictions are lifted and it all becomes rather problematic. It would be an understatement, actually. It’s hard to fly.

Stephen Long: Yes. Now, the Qantas version of events is that every airline suffered this here and around the world. There was chaos, bags lost, flights delayed and cancelled. And this was all part of the teething problems coming out of COVID.

Alan Joyce: I think we’re all a bit rusty when in travelling, I know I am. So what we’re trying to do is encouraging passengers to think about what’s in their luggage, making sure they’re prepared.

Stephen Long: My firm belief is that in Qantas case it was exacerbated by their decision to retrench 1700 ground staff who were experienced and outsource their work to third parties in the major airports. They had a lack of experience and things went haywire and people expected better from Qantas. The workers and their union went to court and it was found that Qantas had breached the law by retrenching the workers. And so Qantas suffered this multi-pronged reputational assault and Joyce was seen as the architect of all of this and was really in the firing line.

Samantha Hawley: And at one point you did try to chat with Mr. Joyce at a press conference about all of this, which he didn’t particularly like, if I remember correctly.

Qantas representative: Good morning everyone, and welcome to the Qantas Group Annual Results for FY 22.

Stephen Long: The question I asked was about their labour relations strategy and I said to him, Is it fair? Is it fair to have people working side by side doing the same job, employed by different companies on entirely different rates of pay or wearing the Qantas uniform?

Alan Joyce: Well, Stephen, that’s a thing that’s done around the industry.

Stephen Long: And I pressed him again. Is it fair? And eventually and he looked very uncomfortable. His response was, it’s a necessity.

Alan Joyce: It’s a it’s a necessity for for us to keep to keep our business going. Now, Stephen, I know Steve.

Stephen Long: That line of questioning was so unpopular, I was escorted out of the building by security.

Alan Joyce: This is not the environment to try a Four Corner. Can we go to the question of.

Samantha Hawley: You’re a menace. Now, just tell me, Stephen, how has Alan Joyce managed to ride through all of these controversies, come out the other end, still manage to earn $2.2 million a year, still have bumping profits for Qantas? I know you’ve mentioned the workforce changes which have helped with the profits of course, but what else was going on?

Stephen Long: A number of things were going on, I’d say, in terms of how he’s ridden it out. He’s had the steadfast support of the board of directors of Qantas over many years, but his fixation with costs came at a cost. Qantas has invested in new fleet, as all airlines do, but critics maintain it hasn’t invested nearly as much as it should have, and that under Joyce, investment in new aircraft that are more efficient, that use less fuel, that require less maintenance than the older fleet that Qantas carried, has basically left it in a position where it’s delayed a whole lot of necessary expenditures. And the cynics say that to boost his own bonuses and boost the share price short term, Qantas has delayed this investment under Alan Joyce. That is the key criticism of the company.

Samantha Hawley: So hang on a minute, We’re flying around in old planes by the sound of it.

Stephen Long: Oh yeah, yeah, and it’s going to fall to his successor.

Samantha Hawley: Okay, so let’s look at his successor now and what she will do. It’s Vanessa Hudson, she’s the current chief financial officer, she’s been with Qantas for a really long time, since 1994. So she’s had a lot of experience there. But what do you think she’ll change or is she just been past this rather big financial mess, having to buy all these new planes?

Stephen Long: On the face of it, this looks like a situation where the board is backing very little change, where they’re going for continuity. And so I would expect the Joyce culture to continue. The issue she’s going to face is that they’re going to have a big bill for new aircraft. So whether she’ll be able to garner the kind of salary bonuses and shareholder returns that Joyce was able to is an open question.

Samantha Hawley: And I think it’s pretty clear we’ve fallen out of love with Qantas in recent times. Do you think we can love it again as much as we used to?

Stephen Long: That’ll be the question. Will Australians continue to fly Qantas out of some sort of vestigial loyalty to the airline that’s been part of the Australian fabric, or will customers be as hard nosed as Alan Joyce and say we’re going to go where we get the value, we’re going to go where the fares are cheaper, and maybe the accoutrements on the aircraft are just a little nicer.

Samantha Hawley: Stephen Long is an investigative reporter. You can see his last Four Corners piece on Qantas from the 5th of September last year on iView. The chairman of Qantas says Alan Joyce did a superb job in challenging circumstances, delivering several record profits. This episode was produced by Flint, Duxfield, Veronica Apap, Sam Dunn and Chris Dengate, who also did the mix. Our supervising producer is Stephen Smiley. Over the weekend, Catch This Week with Madeleine Genner, where she’ll be looking at the King’s coronation and whether Charles can hold the monarchy together. I’m Sam Hawley. ABC News Daily will be back again on Monday. Thanks for listening.