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We are “builders, not wreckers” – Joyce

written by australianaviation.com.au | November 28, 2012

Alan Joyce

Proving where there is smoke there is fire, Qantas CEO Alan Joyce today announced his airline was withdrawing its sponsorship of Tourism Australia, citing a conflict of interest where Tourism Australia chairman – and former Qantas CEO – Geoff Dixon is involved in a new takeover bid for the airline.

“Many of you have been reporting on a club of investors taking a stake in Qantas, a club that includes some key players from the rejected APA private equity bid in 2007,” Joyce, speaking to the National Aviation Press Club in Sydney, said, referring to the consortium reported to include Geoff Dixon, former Qantas CFO Peter Gregg, retailer Gerry Harvey, advertising executive John Singleton and venture capitalist Mark Carnegie.

“Given that the Tourism Australia chairman is a member of that APA Mark 2 club we deemed it prudent to suspend our partnership with Tourism Australia,” Joyce said. That partnership is valued at $50 million over three years. Instead Qantas says it will work directly with state-based tourism bodies.

A key point of contention between Dixon and his backers and current Qantas management is the forthcoming Emirates alliance. Dixon has been a vocal critic of Middle East carriers such as Emirates, and is known to have, as Qantas CEO, rebuffed an approach from Emirates president Tim Clark mid last decade to form an alliance between the two.

Joyce noted that 98 per cent of Qantas shareholders supported the Emirates alliance plan. “We have undertaken research into how this partnership is viewed among customers and our staff. The numbers are overwhelmingly positive,” he said, calling Emirates a “killer partner”.

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“Those of us who are custodians of Qantas today see ourselves as builders,” Joyce said. “We will never be wreckers of this amazing company that belongs to Australia,” he said in pointed reference to his former friend and mentor in Dixon, whose plans for Qantas are reported to include selling off the Qantas Frequent Flyer program and parts of Jetstar.

Other highlights of Joyce’s speech and subsequent question and answer session included:

– Conceding that the timetable to put in place the Emirates alliance in time for its April 2013 “is frankly a stretch”, as staff work over the Christmas break “negotiating airport slots, getting our IT infrastructure connected, developing joint systems and protocols for customer handling and experience, finalising codeshare, interline and frequent flyer arrangements.”

– Labelling Virgin Australia’s creation of a separate legal entity for its international operations as “a legal manoeuvre” where “Virgin’s international operations [are able] to be parked in a separate company to all intents and purposes owned by the listed Virgin Australia,” which, Joyce noted, was currently 65 per cent foreign owned. “So we’ll be talking to the relevant authorities about that.”

– Noting that the near doubling in the price of fuel from $65 to $112 a barrel since the Global Financial Crisis costs the Qantas Group “a billion dollars a year”. “Our profits would be at record levels if the fuel price had not doubled.”

 

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Comments (21)

  • David

    says:

    Paranoid much?! Sounding very much like another petulant short foreign airline chief of the region.

    DR

  • Cal

    says:

    Give up Joyce- what you should be battling for is increased investment from overseas into QANTAS.

  • George

    says:

    Joyce or Dixon. Both have terrible management styles. Neither know how to approach staff or make positive decisions. Qantas needs to rid themselves of people like them

  • Steve

    says:

    With our Ozzie dollar > USD, staff paid much more than most overseas airlines, a high cost service model that has failed in US and Europe (Air France, SWissair, American Airlines etc) something drastic had to be done.

    Joyce had the guts to do it and the sooner QANTAS international staff relise they compete against all other overseas airline staff the better.

  • James from Sydney

    says:

    For all you cynics who believe Alan Joyce should not have taken the steps he has over the last 2 years including grounding, just remember one thing….ANSETT.

    Ansett’s board failed to act. Yes others were to blame but they had problems they should have addressed and didn’t.

  • Brendan

    says:

    Yes, Joyce was at ansett when air newzealand was transferring its costs onto ansett, and yes, Joyce is at qantas while all the start up costs of the jetstar franchises are being funneled onto qantas international, which in turn gives Joyce an excuse to restructure qantas.
    Joyce is always whining about high labour cost and high fuel costs, but imagine how much the fuel bill would be if the Aussie dollar was half what it is now cos I know what the labour cost would be.

  • Ron

    says:

    No one’s arguing that Joyce is not trying to be pro-active, & it’s the first thing he will always say in his self defense too – “we had to do this, we had to do that, we had to ground the fleet, etc.

    But if we’re going to invoke Ansett, lets remember who Joyce’s former employer was. You guess it, the big A. Maybe he’s out to try & prove something in the wake of Ansett.

    And before Ansett, there was Ryannair, the nastiest airline in the world that couldn’t give a flying toss about its customers, as recent press conferences with its CEO still clearly demonstrate.

    If you don’t like Joyce or his decisions, then don’t fly Qantas. The board will soon get the message. The fuel price & the absence of 787’s aren’t his fault, whilst the absence of 777’s & more A330’s to cover for the 787’s could be.

    My biggest issue with Joyce is that he just doesn’t inspire. He doesn’t lead. He’s constantly defending himself like a paranoid sook but never actually inspiring either the customers or the staff to come with him, never giving them anything to believe in. Until he can do that, QF’s customer base, share price, & Joyce’s tennure, will continue to go backwards.

  • Brendan

    says:

    Ron, well said

  • Mike.

    says:

    Oh spare me. Get some facts straight Ron. Joyce didn’t work at Ryanair. He worked at Air Lingus. And if he somehow had something to do with Ansett’s downfall working from his lofty Spot of Network and Schedules Planning then he really is an impressive man!
    I’m not a fan of his management ability/history, but if you are going to attack him get your facts straight!

  • Ron

    says:

    Mike, you’re probably correct & I stand corrected. My apologies. Obviously my connection between Ryanair’s culture & Alan Joyce are incorrect & I withdraw that comment. The moderator of this blog page may remove that entire post from me if they wish. Regarding Ansett, I never said that he was to blame, directly or indirectly, for Ansett’s demise, but rather the shadow of what can happen as a result of corporate inaction probably hangs over him & drives him to take the action that he does. Whether we agree with that action is another matter. Hope to share a drink with you in the Virgin lounge one day Mike.

  • Dan

    says:

    What timing! Ron I am reading your post whilst sitting here in the Qantas lounge at Townville which is currently near full with white collar works and retired older generation people. Yes I agree that Alan Joyce does not inspire but the loyalty and quality of product is still here. The AUS Government will never let a world wide brand like Qantas fold and all they need a new leader to inspire the team. Maybe the outgoing Air NZ CEO is the man for the job look what he has done with that brand. I am not a 100% Qantas passenger and have cashed in my frequent flyer points to get into here and a flights home to Brisbane in business class. Virgin has had it’s issues as well and I was one that was caught in Sydney on that Sunday Morning in September 2-3 yrs ago when the whole system went down. So getting to the point I am very happy with what I am seeing here right now in front of me and for what for now still is the true Australian airline. I for one won’t be seeing you in Richard Brandsons/ Etihad/Singapore airlines lounge.

  • Ron

    says:

    No worries, Dan. Godspeed. I don’t doubt that there are plenty of people in QF who believe in what they do & do their very best, & I’d be happy to fly with any of them, for that reason alone. I also agree that Rob Fyfe has done an excellent job with Air NZ. Although I think top job at Qantas would wear out even someone like him.

  • George

    says:

    Dan if your going to attack someone else’s comments then maybe you should get your facts straight. Virgins checkin system did go down. But u can’t blame them for that. You blame a company called Navitaire.

    The federal government won’t save qantas. There is no need to anymore. Plenty of other investors willing to come in and fill the void with a product twice as good as qantas.

    And how do you think this country survives. Foreign investment. How arrogant you are.

  • Peter

    says:

    Only beleive half what you read in the newspapers, all is going to plan Qantas will be broken up and sold off. Geoff Dixon and Co will get their share and Joyce will get his and retire back to Ireland.

  • Andrew

    says:

    Alan Joyce will not rest until all Qantas Group aircraft have an orange star on the tail.

  • Dan

    says:

    George, In no way was my post an attack on Ron and I beleive by Ron’s reply he did not see it that way either.

    And yes it was Navitaire that went down but my first hand experience on how the Virgin gave very limited and assistance on to all at the check in’s not to mention the 1 hr I had on the phone the next day trying to arrange a credit to my c/card as they wanted to only give a next flight credit. I ended returning home on another airline. That George is VIRGIN’s fault.

    This country does not need the type of Foreign investment that you beleive is needed. Look at the way we sell all our primary prodcuing land and businesses to foreign company’s whose Government do not allow foreigners to buy property in their own countries. Cubby Station in St George is a classic example, Do you honestly think that those profits will stay in Australia. Food prices will raise as these owners will want to export to their own countries.

    So No I don’t beleive Im arrogant at all and the Barnaby Joyce’s and Dick Smith’s of this country are trying to keep
    this Australian owned and produced. I for one with Children want to attempt to keep them a future. nothing makes more more proud to see the RED ROO at airports in Europe or Mumbai as I travel.

    Good luck with your foreign investment idea’s, I dont want to hear you complain about food prices or your childrens future and lack of jobs. A good read below if your interested……..

    http://www.dailytelegraph.com.au/news/sydney-news/australia-is-the-great-foreign-owned-land-as-more-nsw-farms-being-sold-overseas/story-e6freuzi-1226281573668

  • Ron

    says:

    Now now boys, play nicely. Dan, you’re right, no offence was taken. Don’t worry about the rest. But just to be facetious, I should point out that the RED ROO is technically white. It’s the rest of the tail that’s red. Go figure. Keep your chin up mate.

  • Dan

    says:

    I stand corrected 🙂 cheers Ron

  • Peter

    says:

    Amazing, for Alan Joyce to come out and say, quote, ” we will never be wreckers of this amazing company that belongs to Australia”, funny that, it appears to be exactly what he is doing……..

  • Bryan

    says:

    David (above), youre not taking about your namesake are you?!

    Bry

  • Red Barron

    says:

    George your a tosser

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