All Change

Not surprisingly Alan Joyce’s message to the sharemarket and employees on being appointed CEO of Qantas was one of “continuity” from the Dixon era. And that’s probably true in terms of the airline’s strategic objectives and the general shape of the business over the years to come. But evidently the methods Joyce will use to reach his goals will differ from his predecessor’s, if the broom being swept through the executive level of Qantas is any indication.

Since the affable Joyce’s appointment changes at Qantas include the departure of CFO Peter Gregg (replaced by his deputy Colin Storrie); the recruitment of Lyell Strambi to the new position of EGM operations (under who will sit engineering and flight operations); streamlined responsibilities for EGM John Borghetti (who has agreed to stay on with the airline and will focus on key commercial areas such as the product, branding, sales and network); the creation of another new position of EGM group safety (to be assumed by chief risk officer Rob Kella); the appointment of Bruce Buchanan to replace Joyce as the CEO of Jetstar (see our interview from page 30 of this issue); Grant Fenn has been elevated to the position of EGM strategy and investments; Jetstar CFO David Hall becomes GGM corporate services; and EGM people Kevin Brown (a key player in recent EBA negotiations) is now leaving the airline.

That’s an extensive list of changes, a quick scan of which evidently reveals some of Joyce’s (and new chairman Leigh Clifford’s) key priorities – a new and separate focus on safety, a strong focus on operational matters, plus a new face and focus on people/HR.

The appointments also show the (deserved) appointments of Joyce’s key lieutenants at Jetstar in Buchanan and Hall, and the bringing in of fresh blood in Strambi (a former colleague at Ansett who until now has worked for Virgin Atlantic).

Peter Gregg’s departure is meaningful too. Gregg was very definitely Dixon’s right hand man, the brains behind a lot of the airline’s strategic direction of the last few years. It’s not clear under what circumstances Gregg left the airline following being overlooked for the top job in favour of Joyce, but it’s fair to say that he and Joyce would have had different visions for the airline, so his departure is very significant.

But the decision for John Borghetti to stay on has lots of significance as well. A Qantas career man, Borghetti’s decision to stay with airline ensures continuity and the retention of key ‘corporate knowledge’ of the airline, and allows him to focus on areas of the business that are very close to him – the product, marketing and sales.

There’s absolutely no doubt Dixon with Gregg, and under the stewardship of chairman Margaret Jackson, built a great, consistently profitable business.

But November 28 marks the start of a new era.

An interesting angle to all this change is that it is occurring under the watchful eye of Qantas board member James Strong, who very successfully ran the airline as CEO through privatisation in the early 1990s to 2000. A quick reflection on James Strong’s time as CEO compared to what Qantas is today under Dixon certainly underscores that a change in leadership and personalities means changes in style and substance in the company.

Strong was cautious, measured and well liked by the troops; Dixon has been a big thinking, assertive seizer of opportunity. And Joyce is engaging, approachable, but a hard worker and a very smart strategic thinker.

Change is coming.