QAN) chief executive Alan Joyce both loved and loathed

In 2013, Joyce struck a deal with the giant Middle East carrier Emirates, which is state-owned. The deal allows the airlines to co-ordinate pricing and schedules. It’s a deal that recently won an interim extension. Joyce has praised the partnership, saying: “No airline can fly everywhere, but combined we can fly to most of the places our joint customers want to travel to. We treat each other’s customers as our own.”

Virgin Australia initiated a price war with Qantas.

Virgin Australia initiated a price war with Qantas. Credit: Glenn Hunt

And yet in private discussions over the years Qantas’ management have reminded shareholders and the federal government of the constant competitive pressure the airline faces from foreign government-owned airlines and their deep taxpayer-funded pockets.


An illustration of that challenge, often cited by Qantas, was when Joyce and Qantas were battling Virgin Australia in a price war that saw the cost of domestic airfares fall. It was good news for customers and bad news for Qantas shareholders.

Qantas was unhappy because Virgin had the backing of its shareholders, several of which were foreign government-owned airlines such as Etihad and Singapore Airlines, which supposedly had cash to burn. And yet when the pandemic hit, Virgin Australia went into administration, and none of those state-owned airlines with their big chequebooks bailed it out.

But Australian taxpayers supported Qantas to the tune of more than $2 billion, as Joyce piloted Qantas through the pandemic so that it emerged healthier than most other publicly listed airlines around the world. In addition to government support, Qantas gutted its staff base and mothballed its planes, to secure its survival, as its revenues dried up with customers stuck at home and the national borders shut.

Some Qantas passengers unhappy with falling customer service levels had called for Alan Joyce to be replaced last year.

Some Qantas passengers unhappy with falling customer service levels had called for Alan Joyce to be replaced last year. Credit: Peter Rae

Joyce’s remarkable adeptness at handling himself in Canberra, and being able to have the ear of politicians of all stripes, is often admired by his business peers.

As the airline industry has recovered, all carriers have come under criticism for poor service, but none in Australia more so than Qantas, with missing bags, cancelled flights, hours on the phone to customer service centres, and delayed customer refunds.

This is where Joyce flew into turbulence. He seemed to have a tin ear to customer complaints and improving service. Qantas dominated the Australian market more than it did before the pandemic. Customers could complain and swear they were never going to fly Qantas again, but they did.


Joyce was slow to respond, and his half-baked apologies were not sufficient, and customer cries for him to go became louder. While Joyce promised he was improving the customer experience after the pandemic, there was also a $500 million share buyback for shareholders. It left an impression again that Joyce cared more about shareholder value than customer satisfaction.

On Tuesday, Joyce said it’s now a logical time to go. He said he only stayed on at the board’s request in 2020 to see through the airline’s COVID-19 recovery plan. In 2019, Joyce was quoted as saying: “I’ll stay for as long as the board and shareholders want me, and as long as I’m enjoying the job and feel I have more I can give to it.” He forgot to mention the customers.

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.

Source link