Emergency Exit: The highs and lows of the Joyce years

While Joyce considered for a time an offer to return home to Ireland and take over as CEO of Aer Lingus, ultimately he stayed on at Jetstar, and was eventually rewarded with the prize of being named Dixon’s dark-horse successor – though this came at something of an inopportune time in the wake of the 2008 global financial crisis. “There’s a lot to be done. I am fortunate to have a fantastic team around me, and 37,000 passionate Qantas staff,” Joyce said at a speech in December 2008. “I am going to be calling on all that talent and dedication as we secure the present and build the future for Qantas.”

November 2010: QF32 – a tragedy averted

On November 4, 2010, Joyce faced one of his first real crises as Qantas CEO when, six minutes after take-off from Singapore, an engine on one of the airline’s six new A380s exploded in midair.

VH-OQA, ‘Nancy-Bird Walton’, was the first of the Flying Kangaroo’s superjumbo fleet, in many ways a symbol of the airline’s modernisation and transformation, and the new A380s had been relentlessly talked up since they came into service two years prior. The potential catastrophe over Indonesia, however, might have brought Qantas’ A380 ambitions to a screeching halt were it not for the exceptional competence, quick thinking, and calm under pressure displayed by the crew of QF32 under the command of Captain Richard de Crespigny, who landed the plane back at Singapore, saving all 466 souls on board. Nonetheless, the near disaster sent a shockwave through Qantas, and Joyce was forced to act, grounding the entire Qantas A380 fleet while the cause of the engine fire was investigated. “We will suspend those A380 services until we are fully confident that Qantas safety standards have been met,” he said in a media conference at the time. “We’re not going to take any risks with passenger safety.”

The incident was not without controversy: Joyce had to address accusations by the Australian Licensed Aircraft Engineers Association (ALAEA) that the explosion was linked to Qantas’ outsourcing of airline maintenance, telling the ABC that maintenance was not the problem. “It’s too early for us to identify what components could have been at issue. But given that these engines are new and have been maintained by Rolls-Royce [under a ‘TotalCare’ agreement] since and looking at what we’ve seen… it could have been a materials issue on the engine or a design issue on the engine,” he said. “[Lufthansa Technik in] Germany and Rolls-Royce are not low cost alternatives – they are high quality operators, world renowned, and they are experts at maintaining these aircraft and these engines.”

After an intensive inspection program, Qantas at last returned its A380s to service starting in late November 2010 – though VH-OQA itself did not resume operations until April 2012.

October 2011: Lockout – Joyce grounds the fleet

A year on from the QF32 incident, Qantas was in the middle of enterprise agreement negotiations with the ALAEA, the Transport Workers’ Union (TWU), and the Australian and International Pilots’ Association (AIPA) – negotiations which were punctuated by repeated industrial action on the part of the unions. The unions were further aggravated by Qantas’ plans to expand into Asia, with the AIPA taking strike action against Qantas in July 2011 for the first time in almost 50 years.

“The issue that pushed us towards taking protected industrial action is a fundamental one – keeping Qantas pilots operating Qantas flights,” said AIPA president Barry Jackson. “We now have a management team in charge who believe you can shift operations to Asia, outsource the jobs of Australian Qantas pilots and not do any damage to the Qantas brand in the process.” Frustrated by what he described as “impossible claims” and “unrealistic demands” at a 29 October press conference, Joyce upped the ante with an extraordinary statement lambasting the unions. “If this action continues as the unions have promised, we will have no choice but to close down Qantas part by part. It goes without saying that this would have very grave consequences for jobs,” he said. “Killing Qantas slowly would be a tragedy for Qantas and our employees. But it would also have a terrible domino effect right across Australia, affecting businesses large and small, tourism, freight and families. We have got to achieve a resolution to this crisis. We have got to bring this to an end. So I have no option but to force the issue.”

Joyce’s solution was dramatic: calling it “the only effective avenue at my disposal to bring about peace and certainty”, he initiated a lockout of all employees covered by the agreements under negotiation with the ALAEA, TWU and AIPA, grounding the entire Qantas domestic and international fleet, though Jetstar, QantasLink, and freight operations would continue. As was to be expected, the unions were outraged, with AIPA vide-president Richard Woodward saying Joyce had “a knife to the nation’s throat” and TWU national secretary Tony Sheldon saying Qantas had decided not to come to an agreement “right from the word go”.

“This is a pre-conceived, pre-planned attempt to hoodwink the shareholders, hoodwink the Australian community. Now it’s trying to hoodwink the company’s workforce,” said Sheldon. “Do not lose sight of what Qantas is up to here. This is about sending Qantas to Asia.”

The Gillard government took the matter to Fair Work Australia, which ordered all industrial action by both Qantas and the unions to be terminated immediately. Joyce’s actions earned him the lasting enmity of the unions – but while unprecedented, it would not be the most dramatic fleet grounding Qantas would see by the end of the decade.

2011–14: Qantas v Virgin – the capacity wars

In 2011, Virgin Blue, under the command of Joyce’s old Qantas rival John Borghetti, rebranded to Virgin Australia. With the rebranding came an acceleration of the “New World Carrier” strategy, moving away from Virgin’s historic positioning as a low-cost carrier and towards a two-pronged approach, targeting both business and leisure travellers.

Joyce had not been impressed by Virgin’s shift in tack, telling an aviation conference in 2010 that “the middle of the road strategy is not a great strategy” and “you could end up as roadkill”. Nonetheless, when Virgin launched the opening salvos in a three-year domestic capacity war by leasing wide-body A330s and opening up a route between Sydney and Perth, Qantas was forced to react if it wanted to keep its dominant position of 65 per cent of domestic seats.

Qantas increased capacity across both the mainline Qantas and Jetstar brands, with Qantas targeting business and Jetstar targeting leisure, particularly on lucrative east coast routes. Borghetti likened the conflict to a nuclear war, while Joyce disparaged Virgin and its wealthy overseas shareholders and sought aid from the federal government. As the capacity wars dragged on, they began to hit the finances of both Qantas and Virgin. Joyce sacked 5,000 employees and embarked on a new “accelerated transformation plan”, earning considerable ire from politicians and the public and facing strident calls for his resignation. Questions were raised about whether the 65 per cent market share target was even worth it.

Ultimately, the blood feud between Qantas and Virgin sputtered to a halt in early 2014, with both major airlines either freezing or cutting capacity and retreating to lick their respective wounds.

2016–17: National stage – the fight for marriage equality

Under Joyce, one theme that was to emerge would be an expansion of the airline’s long-standing commitment to diversity – be it for Indigenous Australians, gender equality, or LGBTQ rights.

As an openly gay man, Joyce had long been an advocate for same-sex marriage, and as the Turnbull government prepared for a national postal survey on the subject in 2017, the CEO decided to bring the bully pulpit afforded to him by the national carrier to bear.

In this he was backed by the overwhelming majority of the shareholders, as well as by chairman Leigh Clifford – though opponents in the right-wing commentariat, as well as Coalition politicians such as Peter Dutton and Tony Abbott, vilified him for his stance, prompting him to hit back, saying far from “sticking to their knitting” as Dutton had demanded, standing up for social causes is part of a company’s duty to the community.

“In the past few years alone, Qantas has given its support widely. Charity flights for drought relief. Awareness raising for homelessness. Transporting volunteer firefighters around the country. Lots of companies do similar things,” he said in a 2017 opinion piece. “Qantas’ identity is the Spirit of Australia, and one of the most fundamental values in this country is the notion of a fair go. That’s why Qantas speaks up on gender equality. And recognising our Indigenous people. And for marriage equality. I have no doubt we’ll add to this list as time goes on.”

The vitriol came to a head in May 2017 at a conference in Perth when a disgruntled opponent of same-sex marriage slammed a pie in Joyce’s face on stage. This, however, failed to quash his resolve. “No attempt at bullying us and suppressing our voice will work,” Joyce told reporters the next day. “Certainly what happened yesterday has reinvigorated me in actual fact. It has really encouraged me to be out there and to continue to be out there and express my views even more strongly that I have done in the past.”

While no Qantas funds were spent in support of the Yes campaign, he and his long-term partner Shane Lloyd personally donated a million dollars of their own money. In the end, Australians supported marriage equality 61.6 per cent to 38.4 per cent, and Joyce and Lloyd finally tied the knot after almost 20 years together in December 2019.

March 2020: COVID-19 – 11 weeks from bankruptcy

When COVID-19 raged across the world, it was the biggest crisis aviation had faced in its history. Fleets all around the world were grounded as countries slammed their borders shut and cities went into lockdown. As Australia’s largest airline group, Qantas’ exposure was enormous, especially as even domestic travel was rendered near-impossible by hard state borders. At one meeting in autumn of 2020, it was estimated that the Flying Kangaroo had just 77 days of money left in the coffers. Under Joyce, Qantas management looked to reduce cash burn, figure out alternative revenue streams, manage health and safety concerns, and set the airline up for the future. Most of the fleet was grounded or mothballed in places like Alice Springs or Victorville, with the only Qantas planes in the air providing freight or essential flights.

Qantas also controversially axed 6,000 jobs with another 15,000 stood down, though the group reached out to other companies such as Woolworths to make sure many of these affected employees would still have work. The decision to outsource nearly 1,700 ground workers would later come back to bite the airline in legal action brought by the unions. The company also rented out some of its planes to the federal government for essential services, lobbied for what would eventually become JobKeeper, and borrowed just over $1 billion secured against seven of its wholly-owned 787-9 Dreamliners. The Loyalty division provided another lifeline, with ideas such as selling unused food, pyjamas and amenity kits as “care packages”.

“Over the past few years, we’ve significantly strengthened our balance sheet and we’re now able to draw on that strength under what are exceptional circumstances,” Joyce said at the time. “Everything we’re doing at the moment is focused on guaranteeing the long-term future of the national carrier, including making sure our people have jobs to return to when we have work for them again.”

Qantas’ previous strong financial position, coupled with Joyce and his team’s effort to cut costs and raise revenue, spared it the fate of long-time rival Virgin Australia, which collapsed into voluntary administration in late April, to be eventually bought by US hedge fund Bain Capital. While Virgin has since emerged from administration, its operations have yet to return to pre-pandemic heights, with a good chunk of its fleet including long-haul Boeing 777s sold off. Ultimately, as the world reopened, Qantas was able to turn things around and eventually posted bumper profits in the 2023 financial year.

September 2023: Joyce resigns – a storm of controversy

In mid-2023, Joyce and Qantas were riding high on the back of a $2.5 billion full-year profit, its first time in the black since 2019, which would help fund its purchase of 12 new 787 Dreamliners and 12 Airbus A350s. Joyce himself had announced his retirement in May, planning to leave the post at the November AGM and hand over the reins to CFO Vanessa Hudson. These plans, however, would come crashing down – alongside what Joyce hoped would be his legacy – by a string of negative headlines and reputational damage to Australia’s biggest airline. Qantas was forced into an embarrassing backdown over its COVID-19 flight credits policy, which would have seen unused credits from flights cancelled due to the pandemic expire at the end of the year, as it came under fire from a Senate select committee over the credits policy and high airfares. This was soon followed by an announcement from the ACCC that it was taking Qantas to court, alleging the airline had sold more than 8,000 tickets to flights it had already cancelled.

Faced with these issues, as well as complaints about service quality and customer experience, Joyce pulled the plug early, announcing in September that he would leave two months ahead of schedule to give the new management a fresh start. “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,” said Joyce in a statement. “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.”