QANTAS: Alan Joyce, CEO to leave tomorrow. WOW!
In an announcement just released, Qantas reveals that the Board will bring forward the retirement of Alan Joyce as Managing Director and Group CEO effective tomorrow, Wednesday, 6 September to be exact.
He was scheduled to leave in November, bringing his retirement date forward by two months.
CEO Designate Vanessa Hudson will assume the role of Managing Director and Group CEO from the same date 6 September 2023.
“In the last few weeks, the focus on Qantas and events of the past make it clear to me that the company needs to move ahead with its renewal as a priority.
The best thing I can do under these circumstances is to bring forward my retirement and hand over to Vanessa and the new management team now, knowing they will do an excellent job.
There is a lot I am proud of over my 22 years at Qantas, including the past 15 years as CEO. There have been many ups and downs, and there is clearly much work still to be done, especially to make sure we always deliver for our customers. But I leave knowing that the company is fundamentally strong and has a bright future.”Alan Joyce, Qantas Managing Director and Group CEO
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Background to the demise of Alan Joyce
Precluding the calls for Alan Joyces resignation back when he grounded the entire airline in 2011, pressure has been mounting for the scalp of the CEO Alan Joyce over the last few weeks. It started with the announcement of a bumper profit, that should have been cause for a celebration. Instead, things started going downhill.
Travel credits held by Qantas close to half a billion
At a senate inquiry hearing, Joyce couldn’t answer how much the company was holding in total travel credits from customers. It also emerged that the publicly released figures did not include money owed to overseas passengers and Jetstar customers. The AU$350 million publicly admitted to started to look more like AU$470 million or more.
Qatar Airlines – rejection of additional flights
Almost at the start of all these issues was the rejection by the Transport Minister, Katherine King of an application to expand Qatar flights to Australia by 28 per week. The government provided a range of inadequate explanations. Suspicion that Qantas lobbying had been a determinant also emerged. The Qantas/Emirates alliance stood to benefit from the denial of the application, whereas, as a partner to Qatar Airways, Virgin Australia stood to benefit if the landing rights were granted. Tourism, Airport, and even labour state premiers called for the decision to be reviewed
Credit deadline withdrawn
To salve that wound, Qantas announced that it was dropping the December 2023 deadline for use of credits or refunds. But that seemed only to provoke more stories of how badly Qantas had treated some of its customers, with tales of higher fares being quoted when credits were being used, than when fares were bought with cash.
Delayed bonuses for Alan Joyce got bigger
Joyce was also roundly criticised for the way he had deferred some of his bonus share grants, from the pandemic, until the present day when they were worth much more.
Selling already cancelled flights
Then the bombshell of the legal action by the ACCC – the Australian Corporation and Consumer Commission. It has accused Qantas of continuing to sell flights after they have been cancelled. Sometimes 48 days after they have been cancelled. The Chair of the ACCC called for a fine in the range of AU$250 million, which will be the highest fine the ACCC has ever won for a corporation doing bad things.
There has also been a lot of criticism of the Qantas Board, and its Chair, Richard Goyder for their defence of, and inability to curb Joyce’s bad decisions. The outward and visible sign was that the Qantas share price tumbled by 7% over the last week or so. Nothing like a drop in share price to provoke some decisive action.
Will this cauterise the wound? I don’t think so. The damage is done, and repairing it will take far more, and far longer than bringing a resignation forward by two months.
Vanessa Hudson the new CEO has a much harder job to do than when her appointment was announced a few months ago.