Alan Joyce’s rush for the emergency exit
Sam Hawley: Hi, I’m Sam Hawley, coming to you from Gadigal Land. This is ABC News Daily. He took over the flying kangaroo back in 2008. Now, Alan Joyce has departed Qantas early after a string of deeply damaging controversies, but he recently delivered a big profit for shareholders and he walks away with millions in his pocket. Today, senior business correspondent Peter Ryan on the Irishman’s track record, how he lost the public’s trust, and whether the iconic Australian brand can be repaired.
Peter Ryan, Alan Joyce: He’s finished up two months earlier than he first planned to, but he’s not leaving empty-handed, is he?
Peter Ryan: Well, that’s right, Sam. Look, over 15 years as chief executive of Qantas, he’s raked in about $125 million for himself. And that is also free of bonuses that he’s been receiving. He received a $10 million bonus in the form of 1.7 million shares that was announced late last Friday. And there are also other potential bonuses waiting for him. But that’s going to be one of the big questions for the Qantas board as to whether or not they award these additional bonuses to Alan Joyce.
Sam Hawley: Yeah. Alright. So it’s been a lucrative time for Alan Joyce at Qantas, that’s for sure. And he’s jumped ship early, Peter Because it was all getting rather messy, wasn’t it?
Peter Ryan: Yeah, Sam. The reputational damage and the reputational crisis that’s been underway at Qantas was just clearly too much for the Qantas board and the chairman, Richard Goyder, who, like Alan Joyce, has also been under siege. So rather than Alan Joyce seeing the end of the line in November as planned, he’s been pretty much pushed towards the emergency exit. And so the big reason for this is the ACCC’s action alleging that Qantas sold flights for fares that had already been canceled and that’s a potential fine of $250 million, which will be sending alarm bells in any board.
Sam Hawley: Yeah. Okay. Just remind me, Peter, about that allegation that Qantas was selling tickets to flights that had already been canceled. You can’t write that stuff.
Peter Ryan: Well, it’s one of those things that makes you wonder was anyone at Qantas aware of this or was it a system that was out of control? The ACCC is saying that Qantas had at least 8,000 flights that didn’t exist, where the tickets had been allegedly sold to customers.
Basically, customers had in good faith bought tickets, but in the background, Qantas had already canceled these flights, allegedly, and some of these customers didn’t even receive notice until the day before they flew, sometimes via the Qantas app. So clearly alarm bells ringing there for Qantas with the potential of these fines wrecking the reputation of the airline.
Sam Hawley: Oh my gosh. Yeah. Okay. Also, of course, Alan Joyce faced a real grilling in a Senate inquiry over Covid credits, didn’t he? That’s been a big issue at the moment.
Peter Ryan: These Covid credits were so reputationally damaging, and eroded the trust that anyone had in Qantas. People who booked flights before the pandemic in good faith weren’t able to fly for very good reasons because of the pandemic. But these credits were there. And even more alarming, even last week we were learning that some of these covid credits were going to be expiring on the 31st of December, so Qantas had to act. They remove the deadline on the expiry of those credits to let people know that they could use those credits further down the track or even cash them in.
Alan Joyce, Qantas CEO: We know the credit system was not as smooth as it should have been. People lost faith in the process.
Sam Hawley: Yeah. Extraordinary. And there’s more, Peter. It doesn’t even end there, because there was a scandal, of course, around Qatar Airways and the government stepping in to block Qatar flying here more.
Peter Ryan: The whole issue over Qatar Airways is being seen by many observers here as potentially one of the first big errors of the Albanese government.
News audio: Qatar wanted to add 21 flights a week to the 28 it runs now. However, the Australian Government knocked back Qatar’s request. The Government has determined that agreeing to the Qatar Civil Aviation Authority’s request for additional services is not in our national interest.
Peter Ryan: It went to the lobbying power, the extreme lobbying power, of Qantas in Canberra. And, you know, one of the things that did come up at the committee was the Chairman’s Lounge.
Sam Hawley: I haven’t been into the chairman’s lounge, obviously, Peter, but I have read that the champagne, the canapés, they flow freely.
Senate Committee: Senators, I might remind all senators at the table that if they do have questions about the Chairman’s Club membership, it is probably appropriate for them to declare. I declare.
Peter Ryan: The influence of that Chairman’s Lounge. And actually, some of those MPs who were quizzing Alan Joyce had to declare their membership.
Senate Committee: I would declare my membership in the lounge. Thank you very much to Qantas for bestowing that upon senators when they are elected to Parliament.
Peter Ryan: Alan Joyce had denied that the Chairman’s Lounge had any influence whatsoever over government policy, but it does. One has to ask the big question about the eligibility of MPs, particularly those in a sitting government, and whether or not that represents a major conflict of interest when it comes to formulating very important policy.
Sam Hawley: Let’s have a look now at Alan Joyce’s time as CEO. He’s been there for 15 years, Peter. That’s such a long time, isn’t it, for a CEO?
Peter Ryan: Yeah. And Alan Joyce I put you in the category of being one of those street-fighting CEOs. He’s one of the toughest chief executives, one of the toughest people you would ever meet. So why was he there for so long? Well, simply because the board at Qantas and shareholders just simply loved him because he guided the airline through the global financial crisis where airlines around the world were falling over and also the pandemic when planes weren’t flying and Qantas. Alan Joyce has said that Qantas went within weeks of becoming insolvent, in other words, not being able to pay its bills.
Alan Joyce, Qantas CEO: We finally drew a line under the Covid crisis by posting our first full-year profit since 2019. And it’s welcome news for our people in particular, that we’re back on solid ground.
Peter Ryan: On the one hand, he did his job, he guided the airline, but on the other hand, he did this by taking on the unions. And you don’t just have to listen to the Transport Workers Union – one of the key enemies of Alan Joyce – to see this. You’ve seen this over the years with flight catering, ground handling the way that Qantas staff were split, outsourced, you know, to foreign owners and, you know, using the pandemic as an opportunity to outsource big parts of the airline.
News audio: It means nearly 1 in 3 workers will lose their jobs at the airline. All ground crew, including baggage handlers and cleaners, will be outsourced across ten airports, including state capitals.
Sam Hawley: You mentioned the Transport Workers Union. The national secretary, Michael Kaine. He’s pretty happy to see the back of Alan Joyce.
Michael Kaine, TWU National Secretary: It’s welcome news. It provides an opportunity now for us to turn over a new leaf at Qantas. The Australian people have caught up with the type of Qantas that Alan Joyce was running.
Sam Hawley: You know, that’s not the only controversy, is it, during the 15 years that Alan Joyce has been there.
Alan Joyce, Qantas CEO: Good evening, everybody. Thanks for being here. We’re just handing out some press releases.
Sam Hawley: I mean, it’s hard to forget that moment when he grounded the whole airline in 2011.
Alan Joyce, Qantas CEO: In response to the union’s industrial action, I announced that under the provisions of the Fair Work Act, Qantas will lock out all those employees who are covered by the agreements. We have decided to ground the Qantas international and domestic fleets immediately. I repeat we are grounding the Qantas fleet now.
Peter Ryan: I remember I was at home in November 2011 mowing the lawn and my phone rang and it was my boss at the time saying ‘Alan Joyce is shutting down the entire airline’ and I said ‘What’? It was globally and domestically, and this was the peak of the fight with the trade unions, in particular the TWU, but also air pilots and flight attendants. And these were high stakes.
Shutting down an entire airline is one thing, but also risking the anger of all those travelers around the country to make the point that you weren’t going to put up the white flag against unions. And of course, this cost Qantas a lot of money, estimated at around $200 million at the time. And the relationship with the unions was burned and the war’s been going on for more than a decade since then.
Sam Hawley: My gosh. Okay. So Peter, let’s now have a look at what Alan Joyce is leaving behind. He’s passing over to his successor, Vanessa Hudson. She’s going to face just a few challenges, I would have thought.
Peter Ryan: She’s been training beside Alan Joyce since April when he announced his retirement. And also she’s been chief financial officer at Qantas, so she’s been there with Alan Joyce when these tough decisions were being made. She knows what the big challenges are. She knows the biggest one at the moment is damage control and rebuilding trust, but also dealing with some of the other issues that Alan Joyce has left, such as the renewal of the fleet, which is a massive capital expenditure program.
She has to raise the money, she has to make the hard decisions to do that. But no doubt, Alan Joyce has given her a pretty strong handover note. It might be interesting after today, he may well have updated that handover note to include a few other things about what happens when you’re a chief executive and you lose the trust of the public.
Sam Hawley: So, Peter, what’s your verdict? What sort of Qantas has Alan Joyce left behind, and does he deserve that big bonus on the way out?
Peter Ryan: Well, on the one hand, if you look at Qantas a couple of weeks ago they posted a full year after-tax profit of $1.7 billion and that was the first profit they turned since 2019. So that’s seen as a big turnaround for an airline. And Alan Joyce’s ability to do that would be the envy of other airlines around the world. But on the other hand, you know, the erosion of trust and reputation in Qantas is something that takes years to build up.
It can be lost in a very short period. This is not the way that Alan Joyce wanted to go because he made the point that he wanted to be there right to the end. And his farewell parties have been well planned, but they’re going to be slightly a bit more somber and Qantas isn’t going to be wanting to be splashing any excess or throwing rose petals as Alan Joyce finally heads for the exit.
Sam Hawley: Peter Ryan is the ABC’s senior business correspondent. If you want to know more about how Qantas turned taxpayer dollars into profits, we covered that last Wednesday and that’s in your feed. This episode was produced by Bridget Fitzgerald, Lara Corrigan, Nell Whitehead, and Anna John, who also did the mix. Our supervising producer is David Coady. I’m Sam Hawley. ABC News Daily will be back again tomorrow. You can find all our episodes of the podcast on the ABC Listen app. Thanks for listening.
