OPINION
Qantas board makes a martyr of Joyce, but no one buys it
Business columnistSeptember 5, 2023 — 12.04pm
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A Crisis-ridden Qantas Airways has been in desperate need of a circuit breaker, and Alan Joyce’s scalp should have been it.
Instead, Joyce offered himself up, rather than being forced by the board to leave the company.
As sacrifices go – this isn’t much of one. Joyce was already set to leave in two months’ time anyway.
As sacrifices go - this isn’t a big one. Joyce was already set to leave in two months.CREDIT: NINE The optics might go in Qantas’ favour, but the difference in a practical sense is minor.
Instead of acknowledging and taking accountability for being the most complained-about company in Australia, and one that allegedly misled and deceived its customers, the Qantas board has offered hearty praise for Joyce.
The board said Joyce’s willingness to fall on this cash-blunted sword is evidence of him putting the company first and doing what is in the company’s best interests.
The fact that it was Joyce who told Qantas chairman Richard Goyder that he would retire early rather than the board forcing his hand is itself instructive. It recasts Joyce from commercial hard man to being a martyr.
But most people including his staff will never see him in that light.Goyder said on Tuesday that Joyce’s departure was “against his [Joyce’s] every instinct” because “Alan operates at 100 per cent all the time and would see the challenges [which Qantas now has] were his to deal with”.
‘Regretful, but appropriate in the circumstances’
At a hastily convened board meeting on Monday night, Goyder sought feedback from each director on Joyce’s offer to go. He said that the “overwhelming response was that [Joyce’s departure] was regretful, but appropriate in the circumstances”.
The board understood the incoming chief executive Vanessa Hudson needed clean air to move ahead, but directors were not prepared to push Joyce. This is despite the fact that the company’s share price has been falling since the ACCC announced its legal action against Qantas at the end of last week.
The jump in the value of Qantas stock on the news of Joyce’s departure suggests that even his rusted-on shareholder supporters understood that he had now become toxic.
Asking Joyce to leave would have been an impossible difficult backflip for Goyder, who has regularly described him as the most talented chief executive in the country.
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Qantas chief executive Alan Joyce will walk away from the airline's top job two months earlier than expected.
Thus right to the end, it was Joyce calling the shots.
Now two questions remain that will really test the board.
The first is its willingness to claw back any of Joyce’s long-term incentive bonuses that remain in escrow.
It is a matter that Goyder says has yet to be decided. It will doubtless depend on how the case made by the Australian Competition and Consumer Commission plays out. The competition regulator has accused the airline of selling seats on flights it had already cancelled – the so-called ghost flights.
There is $24 million potentially on offer for Joyce, some of which will be at the board’s discretion.
The regulator has also come down hard on Qantas for its poor record of cancelling flights – and disputes the airline’s explanation that the cancellations are due to forces outside its control, like air traffic control or weather. Cancellations are often Qantas’ attempt to optimise its network or manage landing slots, the competition watchdog claims.
The next test for the Qantas board will be its willingness to reframe how it prioritises its stakeholders.
Hudson has the opportunity to repair the airline’s damaged brand by listening to its customers’ frustrations, including their inability to redeem their classic rewards points or use their COVID-era flight credits on later flights without having to pay up to double the price.
This is not the legacy Joyce would have wished for himself. He would rather be remembered as the person who managed a Herculean turnaround in performance of the airline to produce a record profit nudging $2.5 billion.
Seems his last major decision didn’t go to plan. Rather than going down in history as an aviation martyr, it’s clear this is a CEO heading for the departure lounge with a blemished record.