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Nov 4, 2011

Alan Joyce faces fire in Senate grilling

Qantas CEO Alan Joyce faces a huge task to rebuild his credibility after a morning of intense questioning before a Senate inquiry.

Qantas CEO Alan Joyce faces a huge task to rebuild his credibility after a morning of intense questioning before the Senate inquiry into the Qantas (Still Call Australia Home) Bill sponsored by Green leader senator Bob Brown and independent Senator Nick Xenophon.

Several hours into the hearing Senator Doug Cameron clashed with Joyce saying he was “trying to get an idea of the thinking behind this crazy idea of Qantas to ground the airline . You’re like Richard Nixon trying to talk your way out of everything.”

Joyce responded “You’re a bit like a McCarthy trial at the moment …”

The senators were unaware of the drama going on aboard QF31, a Qantas A380 flying from Singapore to London, which has made an emergency landing in Dubai after an engine failure.

The incident comes on the first anniversary of the incident in which the A380 operating QF32 suffered a catastrophic engine failure after departing Singapore for Sydney. It is still on the ground at Singapore airport undergoing a massive reconstruction.

Joyce may have been handed an alert about the incident just before his extended appearance before the Senate inquiry ended. It was hard to discern on the live streaming broadcast of proceedings.

In the session Cameron accused Joyce of deliberately destroying the Australian economy to try and get his way, and Joyce responded very clearly that the actions he took entirely on his own using his operational discretion were absolutely essential to save Qantas from a death by a thousand cuts and that he was justified in enlarging the dispute by shutting down the airline to force a show down in Fair Work Australia leading to the shutting down of lawful industrial action by its pilots, licensed engineers and ground staff.

The chairman of the Senate Committee Senator Glenn Serle said there were a huge number of questions arising from Joyce’s testimony and Cameron said he was going to study the Hansard very carefully to frame those that would be pursued when a return session with the Qantas CEO was scheduled.

During the session Senator Brown accessed Joyce of deliberately misleading parliamentarians in the weeks before the grounding as to its premeditated plan to lock out staff and passengers.

In the opening stages of today’s inquiry into Still Call Australia Home amendments to the Qantas Sale Act of 1992 Joyce said the Qantas group would have to be split up and Jetstar and its Asia interests sold if the legislation is amended as proposed. However he told the chairman, Senator Glenn Sterle, that Qantas  is not considering or planning to break up the airline group and sell off some assets and it has not been discussed at board level.

The amendments would stop Qantas using subsidiary investments to transfer assets offshore to some extent, and would outlaw the rotation of Asia based flight crews through domestic services.

Grilled by Serle about the illegality of Qantas continuing to sell tickets after it had decided to ground the fleet, Joyce briefly laughed and said it was a mistake but was pulled up by Serle who said “it was not a little mistake”.

Serle expressed incredulity that Qantas did not discover its mistake in continuing to illegally sell tickets after its decision to ground the fleet until 8.30pm, three-and-a-half hours after the grounding that left it with no real product to sell (contrary to law).

Joyce also insisted that Qantas did not book any more rooms than usual in hotels around the world in the four days before the snap grounding decision than normal, and disputed that letters to 30,000 Qantas staff concerning the shutdown had been printed or couriers booked, days in advance.

He then said the formal notifications after the 10.30am board endorsement of his grounding decision last Saturday were not printed until 11.30am for distribution not before 5pm and that the couriers were not booked until well after the shut down.

Serle asked if it was normal for Qantas to book several thousand hotel rooms in advance for a Saturday night in Singapore or Los Angeles, and Joyce indicated that it was. He undertook to provide written proof as to when the Qantas hotel rooms were booked in both ports, when the notifications were printed and when the couriers were engaged.

Serle told Joyce he had the most honest face at the table, but he had to satisfy other senators.

In answer to questions from Xenophon, Joyce confirmed he made the grounding decision alone using his unlimited delegated authority in operational matters. He had referred it to the board because of its implications  for the brand and for their endorsement.

Joyce told the inquiry that Qantas might not have survived a year because of the rate at which forward bookings were collapsing. He said that in October actual sales of higher yielding business fares were down by 40% on the prime east coast route, off by 14% on Perth routes and down by 7% on Canberra routes.

In a late development the committee will go in camera shortly to see emails to Qantas employees confirming that management had planned the grounding more than a week before Joyce claims to have woken up and taken a spontaneous decision.

*There will further coverage on Crikey blog Plane Talking

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57 thoughts on “Alan Joyce faces fire in Senate grilling

  1. botswana bob

    Just wait to read the RupertFurher’s ranters on this one. They probably made up their stories before the Irish joke said a word. “The heroic and poorly paid CEO put those gaggle of greens and recycled union hacks in their place with his forceful and factual answers to their weak questioning, saying his passengers had to suffer so he could defeat those terrible awful mean unions.”
    I gather Rupert has –thankfully briefly–returned to hand out awards. I’m betting THE TELLY will win this year’s best made up “news” story with no problems

  2. Robert Pullan

    In the 9th par I think Ben means accused, not accessed.

  3. Steven McKiernan

    You spell Chairman Glenn Sterle correctly once, and then incorrectly six times – whither subediting?

  4. michael r james

    the dreaded pre-emptive word-check:
    “…..Senator Brown accessed Joyce of deliberately…..” should be “accused”
    …………………

    Did you see that I am now a serious player in this game:
    “Chief executive and founder Michael James said the firm’s name (Air Australia) would draw more attention to the fact the airline was 100 per cent Australian owned and operated.”

    Nah, not me. Nor, I imagine, the other Crikey commenter MJ. Too many bloody MJs around. Still I wouldn’t mind if the aviator MJ accidentally contributed his super to my account. Alas it is always the other way around. For about 3 years in the UK my contributions were made to the ‘wrong’ Michael James! Even in Paris I couldn’t escape; the authorities (can’t remember if it was tax business) were after another former-resident MJ. And this aviator MJ also lives in Brisbane.

  5. zut alors

    Having watched over two and a half hours of the Senate Committee questioning J0yce, we have just witnessed a moment of monumental irony. When the Committee Chair asked if he could extend his time for more questions J0yce responded, without a hint of humour, that he had a plane to catch!

    In fact. he did extend the time but only after conferring with his now over-exposed PR underling, Olivia Wirth. On a couple occasions later in the session he looked to her for a nod of approval that he could continue the session.

    One would assume that a man who is so all-powerful that he can ground an airline with two hours’ notice can also re-arrange his pre-booked flight and diary at the last minute – particularly with the perfect and water-tight excuse ‘sorry, I’m delayed at a Senate Committee hearing.’

    The word ironic does not adequately describe J0yce’s concern that he may not catch his Qantas flight and have his plans inconvenienced.

  6. Bill Williams

    Ben,
    Qantas’ Queeg and the Peter Principle: the cost of flawed CEO recruitment
    Irrespective of the rights and wrongs of Qantas CEO, Alan Joyce’s decision to ground the airline’s aircraft, the question has to be asked: how did the situation get to that point? Are the unions really the problem as Joyce asserts or has his own leadership style produced a counter-dependent response…….a modern day, Captain Queeg-like “Caine mutiny”, that suddenly requires intervention by a higher authority (if we believe Julia Gillard and Tony Abbott)?
    A strong argument can be made that the board of Qantas is responsible for the state of the airline today. Alan Joyce was appointed to the role of CEO of Qantas less than 5 months after his 42nd birthday. Many executive recruitment experts would advise that at 42 (when he was appointed to the Qantas CEO role, Alan Joyce just could not have had enough experience of strategic management to do the job well. Some methodologies would suggest he would need to be at leas 50 before he could be expected to make effective decisions for an organisation as large and complex as Qantas. In fact, it could be argued that Alan Joyce’s Queeg- like behaviour (see Herman Wouk’s “The Caine Mutiny”) is a predictable outcome of putting someone in a job requiring decisionmaking above their capability level.
    In terms more familiar to most people, Alan Joyce is a perfect illustration of the Peter Principle: he has been promoted to his level of incompetence.
    It could be argued that the Qantas board should have taken more notice of Alan Joyce’s previous work performance. Joyce was in charge of Revenue Management and Fleet Planning at Ansett until the year before Ansett went into receivership. Certainly the warning signs about Joyce’s leadership have been clearly visible since he took the job. For a while Joyce could be forgiven for many of the problems he face because he was required to respond to the consequences of decisions that (it could be argued) were made before he was CEO. These decisions have required Joyce to respond to a range of issues that have included customer service, aircraft maintenance, aircraft selection, industrial relations, international relations & fuel price hedging . Crikey’s own contributor Ben Sandilands has documented many of them on his Crikey blog “Plane Talking”.
    It may also be that Alan Joyce will never attain the judgement making ability required to lead a 35,000 staff multinational operation organisation. It could be argued that the very fact that Alan Joyce finds enough time to read your “Plane Talking” Crikey blogs and write letters denying Sandiland’s assertions (see: http://blogs.crikey.com.au/planetalking/2011/06/09/letter-from-qantas-ceo-alan-joyce/) is evidence that Alan Joyce might be a classic “Narcissistic Leader”*….more concerned about his own image in the Crikey “mirror” than the health of Qantas. (*see Wikipedia’s definition of corporate narcissism @ http://en.wikipedia.org/wiki/Narcissistic_leadership as well as Sam Vaknin’s somewhat darker definition @ http://www.globalpolitician.com/print.asp?id=558).
    [A couple of extracts from Sam Vaknin’s essay:
    “The malignant narcissist invents and then projects a false, fictitious, self for the world to fear, or to admire. He maintains a tenuous grasp on reality to start with and this is further exacerbated by the trappings of power. The narcissist’s grandiose self-delusions and fantasies of omnipotence and omniscience are supported by real life authority and the narcissist’s predilection to surround himself with obsequious sycophants.”

    Narcissistic leadership often poses as a rebellion against the “old ways” – against the hegemonic culture, the upper classes, the established religions, the superpowers, the corrupt order. Narcissistic movements are puerile, a reaction to narcissistic injuries inflicted upon a narcissistic (and rather psychopathic) toddler nation-state, or group, or upon the leader.”]
    Those who support and admire Alan Joyce’s bold grounding of aircraft while CHOGM was being held and on the weekend of the Melbourne Cup might see Joyce’s timing as excellent. Those that view him as a dysfunctional narcissist would recognise that the bigger the audience and the more dramatic the “stage”, the more he probably enjoyed it. The damage to Qantas is a price he is happy to pay for his fame. Seeking fame is also a hallmark of the narcissistic leader. How many previous Qantas CEO’s can the average Australian name? Most would be hard pressed to name even one.
    To even begin to resolve its problems the board of Qantas has to replace Alan Joyce as soon as possible, with a successor with extensive large multinational experience in helping a “stalled” organisation to recover “flying speed”. It will need someone like Jac Nasser. [A case study for Qantas to compare itself to might be Telstra’s experience with Sol Trujillo or Labor’s experience with Kevin Rudd.]

    When the Qantas board has found Joyce’s successor they will also need to realise that many of the problems the new CEO will face in the next 10 years will have resulted from decisions made under Joyce’s watch. Ultimately, Qantas shareholders should hold the Qantas board accountable for its decision to recruit Alan Joyce in the first place.

    How can Joyce hope to win the hearts and minds of Qantas pilots and engineers at this point? If a Qantas employee sabotages a Qantas jet and causes an accident whose fault would it be? Where was Joyce’s concern for all of the passengers and businesses that were mere “collateral damage” to the great Qantas general with the grand plan and sense of drama?

    The Senate is right to grill Joyce….and Qantas shareholders will be right when they change the sycophantic Qantas board.

  7. Allison

    Serioulsy, sack him, sack him, sack him and cancel his visa. Then nationalise Qantas.

  8. Bohemian

    What a joke! Qantas is already a foreign entity with a kangaroo face as are most of our companies. See who the CEO’s of these shows are now. -all foreigners whose mothers aren’t going to belt them for selling out their country. Our guys are over in their countries doing the same thing. Truth is most Australian jobs are going the way of the beleagued USA – offshore. The multinationals have decided to a one, to obtain the human inputs the lowest cost providers – you know the states where slavery is still legal, and they won’t return until we are earning comparable wages. If they could export mining to China they’d be doing that as well but the Chinese are keeping their minerals in the ground (exept for gold), and buying ours. By the way they have reserves of most minerals which are larger than ours so why not exhaust ours first in return for fiat printed ticket money and twhen we are all cratered and fracked out with a surface resembling the moon, they will start digging up their stuff. If we are dumb enough to destroy our country for mining royalties then they are happy to oblige. Our soveriegnty is being sold to the highest bidder by our scumbag politicans. Is there an honest man in the house? Not in Greece where Papandreou has been pulled back into line by the internatonal bankers through their puppets in the Greek parliament.
    The Greeks need to call in the Spartans to help take back their country. We are five years behind.

  9. BustedPancreas

    I wonder if Allan Joyce knows that Stephen Fry is currently stranded in Dubai, informing his squllion Twitter followers about Qantas safety?

  10. Chris Tallis

    BOHEMIAN
    Well said, if only people could clear their heads from the fog that they seem submerged in.
    How can the Greek capitulation to the demands of foreign bankers be justified?
    I note with major irony that the Greeks are being forced into the sale of their publicly owned assets.
    Just a moments thought on this and it can be concluded that “Buyers borrow credit to appropriate “the commons” in the same way they bid for commercial real estate. The winner is whoever raises the largest buyout loan – by pledging the most revenue to pay the bank as interest. So the financial sector ends up with the revenue hitherto paid to governments as taxes or user fees. This is euphemized as a free market.”
    This is an insane way for governments to treat their own people.
    This is what has happened to Qantas and to our water supplies and to our power companies and telecommunications companies and any who support such maneuvers should be charged with treason but the people didn’t notice because they were too interested in they were watching funniest home videos or masterchef or some such brain rot instead of investing the mental energy to process what whats happening to their own futures.
    They they moan its the governments fault for not penalising the workers. Such stupidity we really do deserve the disasters that peak oil and climate change are about to visit upon humanity.

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