Qantas CEO Alan Joyce has until October’s AGM to prove he shouldn’t be sacked

AFTER the airline’s worst financial result on record, the Qantas boss now has until October to prove he shouldn’t be sacked.

NO ONE would ever suggest that operating an airline is easy.

The costs are vast and many and the scope for revenue is virtually limited to paying passengers.

Margins are razor thin and the environment is fiercely competitive.

Certainly Virgin founder Sir Richard Branson once quipped that the fastest way to become a millionaire was to first become a billionaire and then buy an airline.

RESULTS: How Qantas lost $89 per second

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So it does beg the question of how harshly Alan Joyce and the Qantas board should be judged on the group’s worst financial result on record, a mammoth $2.8 billion loss.

The details are not pretty. In the space of a year, Qantas Domestic saw profits plunge from $365 million to a mere $30 million — a 92 per cent drop.

In the same period low-cost carrier Jetstar shed $254 million — to post a $116 million loss, and Qantas International slid another $251 million into the red — recording a loss of $497 million.

The Frequent Flyer program was the only saving grace, improving $26 million to $286 million.

It’s hard to argue that Mr Joyce should not take some personal responsibility for decisions made in recent years that have contributed to Qantas’ precarious position.

The build-up of Jetstar Asia, the decision to invest in A380s rather than the more fuel efficient Boeing 777s, and more recently the bruising capacity war with Virgin Australia have all played a part in the group’s horrible result.

But on the other hand perhaps Mr Joyce should be applauded for having the guts to slash costs, restructure and reorganise staff and stand up to the unions — even going as far as to briefly ground the airline in 2011.

Whether or not he should be given the chance to see out his strategy to reinvent the airline and return it to profit will be a matter for the board, and shareholders who have not been paid a dividend since 2009.

Financial markets delivered their verdict with share prices climbing 7 per cent on the back of the full-year result.

What happens in coming months could decide Mr Joyce’s future at the October 24 AGM, and in the aviation industry that could be anything.

Just ask Malaysia Airlines.

Originally published as Qantas CEO Alan Joyce has until October’s AGM to prove he shouldn’t be sacked