In his 15-year tenure as Qantas chief executive, Alan Joyce had a habit of simultaneously delighting shareholders and angering passengers through his sometimes brutal pursuit of profits.
He likely never imagined he would eventually be seen as a liability, requiring an earlier than scheduled retirement.
For most of his Qantas career, Joyce distinguished himself among Australia’s corporate ranks for his strong-arm approach to doing business.
There was the time Qantas grounded its entire fleet amid an industrial dispute.
There were the surging profits generated during a period marked by a record number of passenger complaints, and a controversial travel credits refund policy.
But now there are also allegations by the competition regulator the airline sold tickets for thousands of flights that were already cancelled. This comes amid wider suggestions Qantas engages in “slot hoarding” to frustrate competitors – an allegation it denies.
Veteran governance expert Vas Kolesnikoff said Joyce’s immediate exit shows what happens when a CEO, and the company he leads, loses public support.
“It’s somewhat of a shame that such a strong period of leadership is ending in such disgrace,” said Kolesnikoff, the head of Australia and New Zealand research at Institutional Shareholder Services.
“It seems unequivocal that the customer brand has taken a big hit under Joyce, certainly in the last couple of years. He’s paying the price.”
Joyce’s usually delighted shareholders are suddenly not so happy, which partly explains why his retirement needed to be brought forward by two months.
The airline’s deteriorating reputation and looming threat of hundreds of millions of dollars in penalties has helped push the airline’s share price down more than 12% in the past month, even after Qantas announced a $2.47bn full-year record profit, and robust outlook.
Governance groups have urged the Qantas board to withhold millions of dollars in bonuses to Joyce and the wider executive team.
In a statement announcing his immediate exit from the airline on Tuesday, Joyce acknowledged there was “work to be done” to deliver for customers before highlighting the robust financial position of the company he is leaving behind.
“I leave knowing that the company is fundamentally strong and has a bright future,” Joyce said.
Breaking the ‘spirit of Australia’
The Irish-Australian businessman is known to have a relentless work ethic, and intense focus on costs, forged during his time running Qantas’ low-cost airline, Jetstar.
Low-cost carriers tend to operate on thin margins, which means costs need to be tightly controlled for an airline to be profitable.
“To run a budget airline you need to be tough and somewhat uncompromising,” Kolesnikoff said. “When you watch Joyce, nothing sticks. He’s so strong in his convictions that he’s right – even when he’s wrong.”
His uncompromising stance was evident when he flatly refused to repay $2bn in jobkeeper and other government subsidies even after the airline surged back to above pre-pandemic levels of profitability.
“Should we refund that? No, we provided a service,” he said in February.
There was also the airline’s unlawful outsourcing of hundreds of ground handler jobs during the pandemic. Qantas is appealing in the high court.
But Joyce was equally strong in his convictions when he supported Rugby Australia in its decision to rip up the contract of Israel Folau after the player’s anti-gay comments. Qantas was the Wallabies’ sponsor at the time.
Joyce leaves the airline in the hands of new CEO Vanessa Hudson who faces angry passengers as well as dismayed shareholders.
Among her many challenges, Hudson will need to grapple with the potentially damaging federal court action pursued by the competition regulator.
The ACTU president, Michele O’Neil, said on Tuesday that Joyce had broken the “spirit of Australia”, referencing the airline’s slogan.
“Whilst we welcome Alan Joyce’s exit, what really needs to go is the culture of profit over people,” O’Neil said.
