Prelude to the AGM??
Alan Joyce the wrong man for Qantas's top job, says John Singleton
ADVERTISING man John Singleton rained on Qantas chief executive Alan Joyce's parade yesterday, claiming there was a "crisis of management" at the national carrier on the day it unveiled a major alliance with Middle Eastern powerhouse Emirates Airlines.
Mr Singleton said the low share price, poor marketing and international ratings, and combative industrial relations were evidence of management failings. He added that Mr Joyce was the wrong man for the job.
"Qantas is one of only two companies it and Telstra where Australians see them as a reflection of themselves," Mr Singleton said in an interview on Sky Business last night.
"Qantas now is undergoing a crisis of management because a wrong decision was made about a CEO. There is nothing good about Qantas any more: the marketing is wrong, its advertising is wrong and the persona of the company is wrong."
Qantas yesterday ditched long-standing partner British Airways to form an alliance with Emirates on European routes as part of its efforts to restore the international division, which last year lost $454 million. The deal mirrors similar arrangements struck by Virgin Australia chief executive John Borghetti, who was overlooked for the top job at Qantas and has since rebuilt profits at the No 2 airline through alliances with Etihad and Air New Zealand and an improved domestic offering that has taken market share from Qantas.
Mr Singleton last night cited the collapse in the share price -- down from $5.44 in 2008 to $1.20 yesterday -- and a slide in customer ratings as evidence of management failings at the airline.
Mr Singleton said Qantas had two better candidates for the chief executive's job in Mr Borghetti and former Qantas chief financial officer Peter Gregg, now CFO at Leighton Holdings.
Asked whether it was too simplistic to blame the chief executive, considering other cost and competitive pressures, Mr Singleton pondered why Mr Borghetti had been able to get it right under many of the same cost challenges.
"If Borghetti and Joyce swapped airlines, the Qantas share price would go up and Virgin's would go down, no question," he said.
Mr Singleton, whose long-running "still call Australia home" advertisements for Qantas have only recently been replaced, is one of a group of wealthy investors including venture capitalist Mark Carnegie and former Qantas chief executive Geoff Dixon who have been repeatedly rumoured to be looking at a play for Qantas.
"We have always been interested in assets that are good value and given the share price, you'd have to say it looks like good value," Mr Singleton said.
As chief executive, Mr Dixon had endorsed a private equity bid in 2007 that valued Qantas at $11bn and would have delivered him $70m, but was thwarted by shareholders. He was subsequently paid an incentive to find a successor in Mr Joyce, who had run the Jetstar low cost airline started up by Qantas.
Mr Joyce grounded the airline over a confrontation with unions last year, cancelled an order for new Boeing Dreamliners and has presided over the airline's first loss since listing in 1995.
Mr Singleton said there was a leadership black hole at the airline after the company enjoyed years of strong executive and board leadership from Gary Pemberton, James Strong, Margaret Jackson and Mr Dixon.
"Nowadays there is an invisible chairman -- does he make himself available for interviews? -- and an invisible CEO in Alan Joyce, who is probably doing his best but every time he bobs up there's more bad news," Mr Singleton said. "He has no people skills and it's all bad, bad, bad."
Mr Singleton thinks the leadership has to be held responsible for the plight the company is in.
"When they start announcing record losses instead of record profits and the solution is no new planes, you know they haven't got a clue," he said.