Letter from Qantas CEO, Alan Joyce
June 9, 2011 – 10:40 am, by
Ben Sandilands
The CEO of the Qantas group Alan Joyce has responded to a report published in the Crikey subscriber bulletin on June 7, and later that day, in a slightly different version, in
Plane Talking.
Dear Ben
It is clear that you do not agree with me about the nature of the challenges facing Qantas and the solutions to them (“Qantas to suffer as Virgin gets it on with Singapore Airlines”, 7 June 2011). While I am perfectly willing to accept and respond to criticism, I cannot agree with the premise of some of your arguments.
First, your claim that at IATA I was ‘surrounded’ by ‘much more successful airlines’ than Qantas is sensationalist. Qantas has been profitable every year since privatisation, including in each year of my time as CEO, and including at the height of the global financial crisis when airlines around the world were closing their doors, as well as winning many awards for product and service. You also overlook the fact that I took part in a very positive announcement at IATA, about Malaysia Airlines’ decision to join oneworld – a move that will strengthen the alliance’s position in Asia with considerable commercial benefits for Qantas.
Second, you say that Qantas has ‘failed to make a timely resolution of enterprise agreements that it has allowed to expire.’ You do not consider that the actions of the unions involved may be inimical to resolving these agreements, given that if accepted their claims would place an unsustainable cost burden on the airline and prevent us competing effectively with the carriers you name in your piece.
Third, you assert that Virgin Australia’s proposed alliance with Singapore Airlines would make it a “more Australian airline” than Qantas. I find this statement bizarre. Qantas employs 35,000 people, the vast majority of them in Australia, and its contribution to the national economy is far greater than that of Virgin Australia. In March 2011, Virgin Australia announced a profit downgrade, forecasting a financial year loss of $30 to $80 million. Its repositioning strategy, including alliances, remains unproven.
Fourth, you criticise Qantas’ new Dallas/Fort Worth service as ‘amateur hour’. Yet as recently as January this year you yourself listed the very good commercial and operational reasons for the launch of the route – not least an expanded partnership with American Airlines of the type you describe approvingly in your 7 June piece (as ‘globally branded airline rationalisation’). I have full confidence that our strategy in commencing Dallas/Fort Worth services was the correct one for Qantas.
These are just a few of the matters you have raised in your recent pieces, many of which you frame as personal criticisms of my leadership and that of the Qantas board and executive team. I would welcome the right of reply through publication of this letter in Crikey or Plane Talking.
Yours faithfully
ALAN JOYCE