Alan Joyce’s lines aren’t landing any more

Quote:

Joe Aston
Columnist
Aug 27, 2023
Rear Window
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In 126 days, Qantas is set to legally steal approximately half a billion dollars from its customers.After 15 years at the controls of Qantas, having mastered the performance art of gaslighting the nation, Thursday was the final outing of Alan Joyce’s full-court press.

All of his delusions were on display as the airline revealed – and Joyce feverishly image-managed – its record $2.47 billion pre-tax profit for 2023.

He persisted with the utter fallacy that “My intent was to [retire] before COVID but extended to get the company through”. It is a matter of public record that nine months before COVID-19 struck, the Qantas board extended Joyce’s tenure by “at least” three years. Sticking around made him another $30 million.

“We were 11 weeks from bankruptcy,” he claimed anew. This is another raging falsehood. When COVID-19 hit in March 2020, Qantas had almost $2 billion in cash and $5 billion in unencumbered assets it could borrow against. The capital markets were open, so Joyce could issue equity or raise debt (he did both, as well as begging money off the government). The idea that Qantas was ever facing liquidation is sheer make-believe.

This fabrication is a key pillar of Joyce’s hero myth. It is absolutely central to the fable in which he saved Qantas. Joyce is a trained mathematician – he understands the weight of numbers. He knows that if he repeats this line sufficiently often, people will adopt it as fact – as they surely have.

Saying “11 weeks” also gilds it with the hint of precision, which makes the lie sound credible. If Qantas was truly 77 days from extinction, where was that warning in its market announcements of the day? Actually, Joyce told the ASX on March 10, 2020, “We’re in a good position to ride this out.”

Joyce also claimed on Thursday that allowing his arch rival Qatar Airways to launch 28 new flights a week to Australia “could actually distort the market”. Which market is that? The market in which the Australian dollar is weak, global travel demand is roaring but Qantas International charges passengers 52 per cent more by flying 28 per cent less than it did before COVID-19? Qatar’s flights could distort the market that’s rigged in Alan’s favour and we can’t have that.

Qantas even asserted that “in inflation adjusted terms … international fares are [now] 10 per cent higher [than pre-COVID].” Inflation adjusted! Do Qantas customers get to pay the inflation-adjusted price in Alan’s magical world?

Unverifiable figures

Qantas international fares (or revenue per kilometre flown) over the past six months are up 52 per cent versus 2019, yet in the same period, Australia’s cumulative inflation was 16 per cent. That’s a 36 per cent increase in inflation-adjusted terms, so how does Qantas get 10 per cent? By using unreleased, unverifiable figures limited to the fourth quarter, it turns out.

We’re surprised Joyce didn’t use Argentinian inflation for his calculation. That would square with his historical patterns of reasoning. “When you consider this in Zimbabwean dollar terms, I’m really not shafting you that badly.”

I’m still a very large shareholder in Qantas and I more than meet the minimum … level that the CEO is expected to hold,” Joyce said next. Literally any day now, he will receive 3.1 million Qantas shares for which he paid nothing – his glorious golden handshake.

But on June 1, Joyce sold 92 per cent of the Qantas shares he owned, raising $17 million (to buy an apartment that only cost $9 million) and taking him well below his minimum shareholding requirement. Qantas chairman Richard Goyder allowed this like he’s allowed everything else.

Joyce dumping his Qantas stake before he’s even left – more than anything else – lights up the discrepancy between what he says and what he does. Joyce has more than enough other wealth with which to fund an apartment. Why would he sell his Qantas shares if he genuinely believed that “the future for Qantas has never looked better”?

The sneakiness continues

But Joyce reserved his biggest deception for his portrayal of the great Qantas flight credit racket. “What we’ve now done is we’ve put a dedicated concierge line in. The call centre now, yesterday, was three minutes to get through and there’s a dedicated set of experts that can help you get your credits. We recognise that … we didn’t get it right and we needed to fix it and the important thing is, we did fix it … we’ve only got $370 million of credits left … and we’d rather have those credits at zero by the end of the year.”

Let’s just back up a second. The Qantas Group disclosed “total COVID travel credits of $800 million” at December 31 last year. All remaining unused credits will expire on December 31 this year.

On June 26, the company announced “around $400 million in COVID credits now remaining for Qantas customers in Australia”. That is, their updated balance, which appeared to have fallen, actually excluded Qantas customers outside Australia and excluded all Jetstar customers. The sneakiness – the bad faith – of this company never ceases to astonish.

The remaining $370 million Joyce cited on Thursday still excludes Jetstar customers and Qantas customers outside Australia (we asked Qantas for the full number, but the company refused to provide it). This means two things: first, that the total balance of credits is probably greater than $500 million; and second, that only about $30 million of credits have been redeemed in the two months since Qantas declared they’re now so easy to claim back.

What a performance by Joyce. “Ring us and in three minutes flat, you’ll have your money.” If that were really true, why isn’t the balance budging? Joyce must be issuing the refunds in Argentinian pesos.

Class action

Why hasn’t Qantas automatically refunded the balance owing to any customer’s credit card that is yet to expire? Or why can’t Qantas post a bank cheque to every customer it has a mailing address for (given most are members of its Frequent Flyer program)? If the cheque is returned, so be it. Why can’t Qantas transfer the money into the lost super system administered by the Australian Taxation Office? The answer: because any of that might actually work.

These credits are now the subject of a class action, as they should be.

Whenever there’s a civil disturbance, people go out and start looting. Corporations do it too and that’s clearly what Qantas did during COVID-19. They backed up their truck, drove it through the plate glass window of the Australian public and loaded up on our money. These are not trivial amounts for people. Thirty-eight per cent of the credits are over $500.

Joyce and Vanessa Hudson understand behavioural psychology – they understand that customers give up if Qantas makes it hard enough and they can dehumanise their theft by calling it “breakage”. They’ve charged their customers without providing a service and are now on the brink of confiscating their money. How is this any different to the fees for no service scandal over which AMP and National Australia Bank paid tens of millions in fines only after being excoriated by a royal commission?

In 126 days, Qantas is going to legally steal approximately half a billion dollars from its customers. It is staggering. Joyce will be retired in Antarctica, but that massive haul will drop straight into Hudson’s first half-year result as pure profit. That’s what Joyce really meant when he said the future has never looked better! What a ball-tearing result for him to sell the rest of his shares into.

Will the ACCC do nothing? Will Minister for Qantas Catherine King and Prime Minister Anthony Albanese do nothing? You bet they will.

Joyce ended his press conference on Thursday more than 20 minutes early with a queue of reporters still waiting to ask their questions. He is clearly rattled. He’s endured intense scrutiny before but always sailed through and won the argument of the day. His lines aren’t landing any more, he’s lost the mob, and that’s because nowadays, he punches down at Qantas customers and he punches down at Australian taxpayers.

That’s why the facade is cracking. Alan still sings Hero in the shower. He still pulls his made-to-measure suit over his Superman costume each morning. But deep down he knows the Australian public no longer believes him.

Herein lies the danger of letting power intoxicate you, of spending years unchallenged by views that don’t reinforce your own. When you inevitably emerge from your fever dream, reality’s no picnic.