Summary
- Qantas CEO Alan Joyce’s retirement was expected to be positive, however the airline is now facing increasing pressure and criticism, including legal allegations of deceptive conduct.
- Despite announcing a record profit, Qantas is under fire for its part in rejecting the Qatar Airways’ bid for more flights and for top airfares, resulting in calls to dam Joyce’s severance package.
- Qantas has apologized for falling in need of its service standards and acknowledges the necessity to repair its status, nevertheless it stays unclear why tickets were sold for canceled flights.
When Qantas Chairman Richard Goyder announced on May 2 that Group CEO Alan Joyce was leaving the post in November all of the signs were that the departing boss can be going out on a high. With two months still to go before retirement, the CEO and the airline are coming under increasing pressure, and it would not surprise if a sports betting app began laying odds on the CEO making it to the finish line.
It wasn’t speculated to end like this
When the announcement was made that one other long-time Qantas executive, Vanessa Hudson, can be the subsequent CEO, the airline was on the brink of announce its biggest profit ever, and it seemed that Joyce could waltz through his remaining time on the controls. His beloved ultra-long-haul Project Sunrise project was happening, the narrowbody fleet was starting its renewal, and the choices on latest widebody aircraft were of their final stages.
Photo: Qantas
It’s just a little bewildering that a CEO who announced an eye-watering underlying profit of AU$2.47 billion ($1.63b) lower than two weeks ago is now being hammered on multiple fronts, with certainly one of Australia’s largest employers being hauled before the courts for allegedly engaging in deceptive or misleading conduct.
Qantas can also be under fire for its role within the rejection of Qatar Airways’ bid for more flights to Australia and for the dimensions of its 2022/23 profit coming at a time when airfares are reaching unaffordable levels for a lot of Australians. Today, there are calls from politicians, union officials and the media for the Qantas shareholders to vote against the expected AU$24 million ($16m) severance package resulting from Joyce.
Photo: Ryan Fletcher / Shutterstock
Last Friday, Qantas issued Joyce with AU$10.8 million ($7m) in Qantas shares for meeting performance targets, and he’ll reportedly receive one other AU$12.3 million ($8.1m) in bonuses and shares. There may be nothing unknown in any of that, and it needs to be added that in COVID, Joyce and his senior team reduced their compensation because the airline struggled for survival.
If not for the Qatar Airways situation and now the costs from the Australian Competition and Consumer Commission (ACCC), then public opinion would have been glad for Joyce to ride off into the sunset with what he has earned. It’s alarming to see the mess the airline is now in, and the statement it issued today is not going to win it many friends nor sit well with shareholders.
Photo: Robin Guess / Shutterstock
In essence, the ACCC has accused Qantas of constant to sell tickets after flights had been canceled and never informing individuals who already had tickets in a timely manner. In a single example, the ACCC said that Qantas canceled a Melbourne to Los Angeles flight resulting from depart on May 6, 2002. The ACCC alleged that Qantas canceled the flight on April 28 but didn’t remove it from sale until May 2 and didn’t inform existing ticketholders until May 4, two days before the flight was resulting from leave.
The Qantas response
Today, Qantas released an announcement (available on its website) acknowledging that the allegations have caused significant concern amongst its customers, people and the final community. It also said that the problems relate to a time
There’s little or no within the statement that addresses why tickets were sold for flights that had already been canceled, but with it now a legal matter, there are more likely to be constraints on what the parties can say publicly. What is just not addressed is why did it take legal motion by a government body to bring this to light, and if Qantas is basically contrite then why didn’t it get on the front foot and address the difficulty before it was this mess?
What do you concentrate on the best way things are going for Qantas? Tell us within the comments.