‘Aviation’s hard man’: Qantas boss tied for the long haul

Geoff Dixon, who was Qantas chief executive for seven years, always joked that he was never out on the street with any of his three potential successors behind him unless they push him in front of a bus. By contrast, Alan Joyce, the little Irish mathematician with a thick brogue who succeeded Dixon and built a reputation as the hard man of aviation, never paid attention to him.

Joyce has been the chief executive of Qantas for nearly 14 years. He is one of the longest-serving CEOs of an ASX company and one of Australia’s most influential leaders. Half a dozen potential successors have left during his tenure at Qantas, with more to follow, as the Qantas board has indicated Joyce could be there for several more years.

In March, Qantas chairman Richard Goyder told staff, senior management and shareholders that his star CEO’s contract was indefinite. “Alan will remain as CEO until at least the end of 2023, and possibly beyond. He’s done an incredible job during the pandemic and now in rebuilding, and he’s about as energetic in the role as I’ve ever seen him, given what’s on the horizon. †

While the news was welcomed by shareholders, it was not received as positively by unions, some employees and customers.

Joyce, 55, may stay on as CEO to oversee the delivery of Project Sunrise, which promises to provide the first nonstop flights from Australia’s east coast to New York and London by the end of 2025. a passion of Joyce, and if he stays until those first non-stop flights, he will have been at the helm of Qantas for 17 years.

While Joyce has received critical acclaim from Qantas’ board and shareholders for his streamlined management of the airline, characterized by a focus on cost savings and profit growth, and breathtaking relentlessness, there are also critics whose voices have grown louder around declining customer service levels. and low employee morale.

Before the pandemic, the gap between senior management, employees and customers has only widened. It didn’t help in April when Joyce blamed customers for contributing to the travel chaos at airports during the Easter holidays, when there were long queues, delays and passengers missed flights. “Our customers are not match fit,” he said.

Those comments provoked a hostile response from customers, which was further compounded by a response on social media about the airline’s poor customer service. Customers expressed frustration at not being able to reach Qantas’ call centers, with some saying they were on hold for up to seven hours, and others complaining about canceled flights, long delays and missing luggage.

Qantas, which last month announced two acquisitions, a 51 percent investment in TripADeal, for an undisclosed sum, and also its $610.8 million acquisition of Alliance Aviation Services, attributed customer service issues to labor shortages. .

Labor shortages have hit airlines worldwide as a strong uptick in travel stretches an industry still vulnerable to the pandemic, which saw many workers laid off.

“They take their customers for granted.”

Peter Morgan, Experienced Fund Manager

Qantas has not announced what it will spend to recruit additional staff, although an airline spokesperson said the company plans to have 1,500 employees in its call centers in the coming months, which is double the pre-COVID figure. had. The move it hopes will dramatically reduce wait times at its call centers, which are spread across Hobart, Auckland, Cape Town, Fiji and the Philippines.

Since 2010, the number of Qantas employees has fallen from 37,500 to 22,000, with 9,400 of them in the past two years.

“During COVID-19, Qantas got massive help from the government with packages and grants to get them through, and to be unprepared when they come out the other side just isn’t right,” said veteran fund manager Peter Morgan, who is now his own money. “It’s arrogance. They take their customers for granted.”

Over the past two years, Qantas is estimated to have received nearly $2 billion in government support through JobKeeper and other aviation-specific programs. The entire industry, including airports, is estimated to have received $5 billion in government support during that period.

“It’s a $10 billion company that was bailed out by the government, and why the government didn’t get equity in the company after pumping so much taxpayer money into it is beyond me,” Morgan says. “Every time you bail something like that, a company gets more arrogant.”

Qantas, which says it lost between $15 billion and $20 billion in revenue during the pandemic, has seen its dominance in the domestic market grow over the past two years. It now controls 70 percent of the domestic market, while before COVID-19 it hovered between 60 and 65 percent.

Queues at Sydney Airport during the Easter holiday chaos. Credit:Oscar Colman

Qantas’ domestic fleet, which also includes Jetstar, is operating at 100 percent capacity, although the number of flights has been reduced due to higher fuel costs, boosted by the war in Ukraine. The airline’s international operations operate at less than 50 percent of its capacity as some overseas markets such as Hong Kong, China and Japan have not yet fully opened up.

Investment bank Credit Suisse has underperformed the airline’s rating, citing concerns about higher fuel costs and increased competition from Virgin and Rex, with a price target for the company next year of $5.05. UBS has forecast Qantas to return to profitability in 2023, based on earnings before interest and taxes, and instead has a bullish price target of $6.75. The positive outlook is based on the recovery of the domestic aviation market, a reset of international business and cost savings. Qantas shares recently traded at $5.21.

Joyce is admired in business circles for how he has tamed unions through powerful tactics over the past year and a half. Many still talk about his stunning decision to ground the entire Qantas fleet in a battle with unions in 2011. The grounding of the fleet left 100,000 passengers stranded worldwide. Joyce was recovering from his own battle with prostate cancer at the time.

Joyce has mostly taken over the unions and won. But in his latest clash with the Transport Workers Union — over outsourcing 2,000 baggage handlers the airline says would save $100 million — he has wiped out his writing. Qantas lost its case in federal court and was ordered to compensate employees for the way it handled that decision. Qantas has sought permission to appeal the ruling to the Supreme Court.

Alan Joyce is not always popular, but he is probably the best airline in the world.

Peter Harbison, Chairman Center for Aviation

Michael Kaine, the national secretary of the Transport Workers Union, believes staff reductions at Qantas over the past five to six years have led to a decline in customer service and damaged the company culture.

“It is the workforce that is and has built the Spirit of Australia. It’s not a look. It’s not announcements being made about buying planes worth $38 billion in the future so you can have a stock price increase,” Kaine said. “These are all short-term tactics by a management team that have resulted in a long-term degradation of the culture and treatment of employees. And this has now spilled over into reputation and this is what we’re most concerned about. We’re actually looking forward to a post-Alan Joyce Qantas, so we have a chance to rebuild the Spirit of Australia.”

Joyce and chairman Richard Goyder were invited to comment, but Qantas referred this masthead to his public statements.


While it is unlikely Joyce will ever gain the admiration of unions, he is admired by his peers not only for his financial management and crackdown on labor relations, but also for his foresight. The non-stop flights to New York and London are ambitious. They would be the world’s longest non-stop commercial flights, but they also require a significant capital investment in new aircraft, an amount Qantas has not disclosed.

“His vision is simply outstanding,” said Peter Harbison, president of the Center for Aviation. Joyce may not always be popular, but he is probably the best airline in the world. He’s been pretty rude all the way. He never hesitates to take the difficult position that he believes is best for the airline.”

Joyce is also known for his political knowledge. Few chief executives have wielded so much influence in Canberra’s corridors of power, or received so much taxpayer support from successive governments.

“I think Alan has done a very good job during his tenure in the very difficult and challenging years, especially the last two,” said Anton Tagliaferro, founder of Investors Mutual. “Qantas needs to be managed quite aggressively as it is in a very difficult industry. There may be some complaints about customer service, but I don’t think there’s any doubt that Alan Joyce should be the man who runs Qantas now.”

During Joyce’s time at the top, more than half a dozen executives have left Qantas, some of whom were considered candidates to replace him. They include former finance director Simon Hickey, Jetstar boss Bruce Buchanan and Jayne Hrdlicka, who is now CEO of Virgin Australia. “There is little doubt that Jayne Hrdlicka would become the successor four years ago,” Harbison says. ‘And when it became clear that Alan was staying on board, she jumped aboard. Since she has disappeared from view, the field has been wide open.”

Joyce’s potential internal successors include Chief Financial Officer Vanessa Hudson, Head of Loyalty Olivia Wirth and Gareth Evans, Jetstar’s Chief Executive. Hudson publicly expressed her wish to succeed Joyce earlier this year. Andrew David, head of Qantas at home and abroad, is highly regarded and is the most qualified candidate to succeed Joyce, some industry insiders say they don’t want the top job.

In the past, Qantas has hired from within, and the board is likely to continue down that path, says Tagliaferro of Investors Mutual. That is, if the seniors are willing to wait quite a few more years.

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