Grounded: How Alan Joyce brought Qantas and the nation to a standstill
January 24, 2015 - 12:30AM
Matt O'Sullivan
Business Reporter
Qantas check-in at Melbourne airport on October 30, 2011.
Photo: Joe Armao
Shortly before 5pm, Alan Joyce took a lift with one of his minders down six floors at Qantas headquarters near Sydney Airport. Once out of the lift, they began the short stroll to where journalists and cameras had been corralled for a hastily arranged media conference to hear an announcement they had only been told was big. Before the Qantas chief executive got to the waiting journalists, a text message was sent to Lyell Strambi's mobile. "We are go," it read. With those words, the die had been cast. There would be no turning back.
About 10 minutes earlier, in anticipation, Strambi, the Qantas head of operations, had set up a conference call with his direct reports. Some of Strambi's executives had written short scripts beforehand to read out to their own managers when the nod was given. With Strambi on one line, his confidants were about to dial into their own conference calls to feed the message down the line. "Alan is going in now. He's made the decision. You now need to go and put in place your plans," one told his direct reports. As the words ricocheted around the organisation, emails began appearing in the inboxes of senior staff outlining what was about to happen and what they needed to do. With the push of a "send" button on a mobile phone, the middle managers had been drawn into the vortex. The chief executive was holding a media conference and in 10 minutes all hell would break loose.
Earlier, on the last Saturday in October 2011, some staff not yet in the know had turned up at Qantas headquarters and at airport terminals in jeans and T-shirts. They had no idea why they had been dragged into the office on a Saturday. For all they knew, the Transport Workers Union was about to launch a strike.
Standing in front of TV cameras, Joyce started reading a prepared speech. "A crisis is unfolding in Qantas," he began. With the unions "trashing our strategy and our brand", Joyce insisted he had no option but to force the issue by locking out staff who were covered by three agreements under negotiation. "Killing Qantas slowly would be a tragedy for Qantas and our employees," he said. It would be 55 sentences into his carefully crafted speech before he uttered the crucial lines. "The lockout makes it necessary for us to ground the fleet," he declared. "We have decided to ground the Qantas international and domestic fleets immediately. I repeat, we are grounding the Qantas fleet now."
Within eight minutes of the start of Joyce's speech, the command to ground the fleet had worked its way to every part of the Qantas operations, from London and Los Angeles to Darwin, Sydney and Perth.
Joyce's decision would disrupt 98,000 passengers already sitting on Qantas planes or who were due to hop on its services over the next few days.
Sydney Airport during the grounding.
Photo: Lee Besford
Shocked staff went out into the airports and terminals and did what they had been told. Few read the list of prepared notes detailing what they should do. Time was precious. Staff ensured that passengers disembarked from planes and were sent home or put-up in hotels. In a worst-case scenario, Qantas had expected arguments and fights to start. Travel plans would be thrown into disarray. But mayhem did not break out. Instead staff and passengers appeared so stunned and disbelieving of what was occurring that an air of order was maintained in airport terminals around the country and overseas. People were simply dumbfounded.
At 5:15pm Qantas gave formal orders to couriers to deliver to staff lockout notices. Five minutes later, Qantas phoned a broker to book 2000 hotel rooms in Los Angeles and 800 in Singapore. Shortly afterwards the airline booked accommodation in Australia for stranded passengers. Qantas still had 66 planes in the air. The airline decided not to tell pilots who were flying about the unprecedented events underway on the ground. It deemed it a risk to safety because it believed pilots would be distracted while in the air. Word had a habit of spreading quickly, even at 40,000 feet. Pilots on long-haul flights often tuned into ABC Radio Australia or spoke to pilots of other aircraft ia air-to-air communications. The captain of a 747 flying from Dallas to Brisbane, one of the longest runs in the he world, was listening to the news on Radio Australia in the middle of the night when he heard that his airline had been grounded. Steve Anderson, the captain of the 747 who was also a secretary of the pilots' union, checked in with Qantas' operations control centre in Sydney but was told they had no information to relay to him. This was despite the fact that Qantas had prepared a statement to be read to any pilots who phoned in. The statement confirmed Qantas had been grounded but emphasised that it did not pose a safety risk to their flight. They were told to fly on to their destination where they would be met on arrival and all would be explained.
Earlier in the afternoon, Anthony Albanese has been playing tennis in a social competition at Marrickville in Sydney's inner west. In the middle of the game the federal transport minister got a call at 1:38pm from one of his advisers to say that the Qantas chief executive wanted to speak to him urgently, and to expect a call. The call didn't come. He rang Joyce's mobile at 1:51pm but couldn't get through. "What a time to ring!" Albanese said sternly in a message he left on Joyce's phone.
Four minutes later, Albanese tried again, without any luck. Finally, his mobile rang with Joyce on the other end of the line shortly after 2pm. The Qantas chief executive told him that he would be grounding Australia's largest airline in less than three hours and locking out staff on the following Monday. Albanese told him unequivocally that he thought it was a bad decision. "I reminded him that CHOGM was on in Perth and that if he's going to pick any time to ground the airline, ever, that it would do maximum damage. I said "Why would you do it tonight? People would be stranded. If you are going to do this, why wouldn't you at least give me some notice?" Albanese recalled later. "He was like, the decision has been made. We were being told, not asked."
Working to a prepared script, Joyce told Albanese he was doing it on the basis of safety. He informed the minister that if word leaked, he would ground the fleet immediately.
The government believed Qantas had dumped the problem in its lap to be fixed. Albanese phoned the Treasurer, Wayne Swan, who organised a telephone hook up of key cabinet ministers to determine a course of action. This was a crisis for the government, too.
Before the teleconference, Albanese spoke briefly to Prime Minister Julia Gillard about the government's course of action. As a former industrial relations minster and the architect of the Fair Work Act, Gillard knew the legislation back to front. It was quickly decided to send the dispute to an emergency hearing of the industrial umpire by using Section 424 of the Fair Work Act. To Qantas' dismay, the government had decided against invoking Section 431 of the industrial relations laws, which gave ministers the powers to terminate the dispute immediately. It would have allowed Qantas to keep flying. The government decided Albanese would lead its counterattack later that afternoon. After being given an ultimatum by Qantas, the government believed it needed to get on the front foot or the airline, the opposition and the unions would quickly fill the vacuum.
Later, while Joyce was still speaking at his press conference, Albanese's media minder alerted journalists to a media conference to be held with the transport minster in central Sydney, not far from Qantas' city offices.
Clearly angry, Albanese said he was "very concerned about Qantas' actions of which we were notified only mid-afternoon". In the 1989 pilots strike, the government was able to make contingency plans. It had called in the Royal Australian Air Force and allowed international airlines to fly on domestic routes. This time there was no warning. Australia depended on aviation like almost no other country. Albanese told journalists the government would be making an urgent application to Fair Work to terminate all industrial action at Qantas.
The government accused the Coalition of knowing about the planned grounding and acting in unison with Qantas. Their claims gained credibility when the shadow treasurer, Joe Hockey, told the ABC's
7.30 Report that Qantas had been saying "weeks ago" that it was considering a grounding or lockout as an option. A day later, Hockey changed his position.
Joyce had made the biggest gamble of his career. The fact that word of the grounding had not leaked testified to the loyalty of his inner circle. But neither he nor his inner sanctum knew whether the months of planning and strategising would pay off. With a single decision the man with the thick Irish brogue from Dublin's outer suburbs had almost stopped a nation.
After months of unions threatening stoppages, calling them off at the last minute, and in some cases seeing them through, it was Qantas that was taking action. Throughout, Joyce had not shown signs of anxiety or nervousness to his staff. He was cool under pressure.
The question now was whether his extraordinary act would bring the dispute to an abrupt end. More importantly, once the dust settled what would be the final toll?
This is an edited extract from the book Mayday: How warring egos forced Qantas off course by Matt O'Sullivan published by Viking, rrp $32.99. Also available as an ebook.