Qantas’ outgoing chief executive Alan Joyce has delivered a hideous parting gift to the airline – a public relations grenade, the damage from which could take years for his successors to fix.
The public pressure on Qantas has been relentless, and punishing the airline’s top brass for their seemingly astounding complacency will require many uncomfortable walk-backs, most notably from Qantas chairman Richard Goyder.
First, Goyder will have to concede Joyce may not be the greatest ever chief executive. That would be a big concession, given how effusive Goyder has been in his praise of Joyce. Goyder has also been remarkably muted in his public comments, even as the Qantas brand is shredded around him.
Qantas chairman Richard Goyder (left) and CEO Alan Joyce.Credit: Louie Douvis
Next, Qantas’ major shareholders might have to acknowledge that the airline has a bigger public responsibility than just churning out record profits.
Then there is Prime Minister Anthony Albanese, who might have to admit that his government has made a poor judgment call on the request from Qatar Airways for extra flights. The fallout from that decision continues to hang over the Albanese government, which chose to give Qantas a financial leg up by blunting Qatar Airways’ moves.
For incoming Qantas chief executive Vanessa Hudson, who was in part appointed as a foil to Joyce, mending the fractured relationship between the airline and its disaffected customers will take a mammoth effort.
Hudson should have been the fresh face of Qantas but instead will take up the role of chief litigator in two upcoming legal battles – the first, a shareholder class action claiming it misled customers over refunds, and the more damaging case being mounted by the Australian Competition and Consumer Commission, which alleges the airline engaged in misleading and deceptive conduct when it sold tickets for flights it had already cancelled.
Hudson also made the rookie error of tying herself too closely to Joyce. For example, when he farewelled shareholders and analysts at his final profit briefing, Hudson declared staff were “blessed” to have had Joyce as their leader.
But for Hudson to avoid being mired in the Joyce customer relations swamp, she needs the help of the board – which has been studiously avoiding any move that looks like it’s holding Joyce accountable.
ACCC chair Gina Cass-Gottlieb has crashed Alan Joyce’s farewell tour.Credit: Michael Quelch; Dion Georgopoulos
But how can Goyder exercise any discretion the board may have to claw back Joyce’s performance-based bonuses when he has regularly described him as the country’s best chief executive?
Inadvertently or not, Goyder has painted himself into a corner.
The board has the option to ask Joyce to leave the company before his official departure date in November, but there is no suggestion of this. In a practical sense, an earlier departure of Joyce wouldn’t disadvantage Qantas given he is already leaving in a couple of months, and it would improve the optics.
Instead, the board opted for a cookie-cutter statement on Monday, saying it would review the allegations made by the ACCC. It also took issue with what it believed was an unfair comparison between the airline selling tickets to flights that had been cancelled and financial institutions that were previously found to have charged fees for no service.
Qantas says these customers were offered alternative flights or refunds. (Of course this would be cold comfort for the person who missed their business meeting, or their friend’s wedding, and had to navigate Qantas’ Byzantine refunds policy.)
The difficulty in dealing with Qantas when attempting to change flights or get refunds back in 2022 was legendary. Customers complained that it was near impossible to navigate the process online and call centre wait times ballooned out to 14 hours.
And then there are those who attempted to redeem credits for the same destinations, only to find the price had risen significantly.
The statement from the board on Monday said it recognised Qantas’ reputation had already been hit hard – and that was before the ACCC action. So the regulator’s legal action has just moved the dial for Goyder and Co from disastrous to Defcon 2.
Not that the board would be unaware of how furious its customers are about the way they had been treated. Over the past week, social media, mainstream media and talkback radio has been a flooded with complaints about Qantas.
Having misread the public sentiment on Qantas, the Albanese government is now having to deal with division within its own party’s ranks, with Queensland and South Australia now questioning the Qatar decision.
And the country’s largest travel agency, Flight Centre, has mounted an advertising campaign applying even more pressure to have the government reverse the decision.
But nothing puts a board under pressure like the share price. And on that front, Qantas’ stock has dipped more than 7 per cent over the past week, as shareholder goodwill for a record $2.5 billion profit clashes with the moral outrage about the airline’s perceived impudence.
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2023-09-04 06:20:12Z
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