Alan Joyce retires as Qantas CEO two months early
Alan Joyce has retired as Qantas CEO two months early, making the unexpected announcement on Tuesday morning.
Alan Joyce will retire as Qantas Group CEO two months early, with chief financial officer Vanessa Hudson taking over the role from Wednesday.
The sudden announcement was made on Tuesday morning.
Mr Joyce was due to retire in November.
“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,” Mr Joyce said.
“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.”
Qantas chairman Richard Goyder said the decision showed Mr Joyce “always had the best interests of Qantas front and centre”.
“On behalf of the Board, we sincerely thank him for his leadership through some enormous challenges and for thinking well-ahead on opportunities like ultra long-haul travel,” Mr Goyder said.
“This transition comes at what is obviously a challenging time for Qantas and its people. We have an important job to do in restoring the public’s confidence in the kind of company we are, and that’s what the Board is focused on, and what the management under Vanessa’s leadership will do.”
Rob Marcolina will become the Group’s chief financial officer, replacing Ms Hudson.
Qantas said, as planned, shareholders will formally vote on the appointment of Ms Hudson as managing director at Qantas’ annual general meeting in November.
Ms Hudson will become the first woman to lead the company.
She has worked in a number of executive positions across the company over 28 years, including chief customer officer and senior vice president for Qantas across the Americas and New Zealand.
Speaking to media at a press conference on August 24, Ms Hudson said she was “excited” about the future and said Qantas’ FY23 full-year results were “not as good as it gets” as the future earnings potential of the business was expected to continue to grow.
The Qantas Group posted an underlying profit before tax of $2.47 billion. It had a statutory profit after tax of $1.74 billion.
Grovelling apology after ‘nightmare’ week
Qantas’ reputation has “been hit hard on several fronts”, but the national carrier has vowed to repair it.
In a statement on Monday, Qantas pledged to regain Australia’s trust after a nightmare week plagued by the consumer watchdog’s allegations that the airline had sold tickets for “ghost flights”, a grilling by senators over competitors’ flights, backlash over bonuses, and a blowout in Covid refunds.
The Australian Consumer and Consumption Commission launched action in the Federal Court on Thursday, alleging the national carrier had “engaged in false, misleading or deceptive conduct” by selling sale tickets for more than 8000 already-cancelled flights between May and July last year.
The ACCC is seeking to penalise the airline by more than $250m.
A Qantas spokesperson conceded the airline’s service standards had “fell short”.
The spokesperson said the airline was aware that the ACCC allegations especially had “caused significant concern among our customers”, but the allegations were being taken seriously.
“The ACCC’s allegations come at a time when Qantas’s reputation has already been hit hard on several fronts,” the spokesperson said.
“We want the community to know that we hear and understand their disappointment.
“We know it will take time to repair. And we are absolutely determined to do that.”
The spokesperson said the period of time that the consumer watchdog’s claims relate to – mid-2022 – was “one of well-publicised upheaval and uncertainty across the aviation industry”.
Qantas also denied suggestions it had engaged in charging a “fee for no service” and said it would address the allegations in full “without cutting across the legal process”.
“Our longstanding practice is that when a flight is cancelled, customers are offered an alternative flight as close as possible to their original departure time or a refund,” the spokesperson said.
In launching its action, the ACCC alleged Qantas “kept selling tickets on its website” for an average of more than two weeks – sometimes up to 47 days – after the flights had been cancelled.
It also alleges that for more than 10,000 flights scheduled to depart over the three months, Qantas “did not notify existing ticketholders” that their flights had been cancelled for an average of 18 days but in some cases up to 48 days.
“The ACCC alleges that for about 70 per cent of cancelled flights, Qantas either continued to sell tickets for the flight on its website for two days or more or delayed informing existing ticketholders that their flight was cancelled for two days or more or both,” the ACCC said last week.
A fortnight of controversy
Mr Joyce’s retirement announcement comes after Qantas and Jetstar also scrapped the expiry date on Covid travel credits following intense questioning at hearing for an inquiry into the cost of living, which Mr Joyce was issued a summons to appear at.
Customers with a Qantas Covid credit can now request a cash refund at any point in the future, and customers with a Jetstar Covid voucher can use it for travel indefinitely.
At least $470 million of credits remain unredeemed and were due to expire at the end of this year.
“We’re doing this because we’ve listened,” Mr Joyce said in a video message last Thursday.
“We know the credit system was not as smooth as it should have been and while we’ve improved it recently, and extended the expiry date several times, people lost faith in the process. We hope this helps change that.”
It was revealed at the hearing on Monday, August 28 that the value of unredeemed credits Mr Joyce quoted the week prior when discussing the Qantas Group’s full-year results – $370 million – did not include Jetstar credits or international customers.
During questioning, Jetstar CEO Stephanie Tully, who also appeared at the hearing, revealed there were about $100 million in unredeemed Jetstar travel credits.
Four days before the Qantas Group posted an underlying profit before tax of $2.47 billion for the financial year, class action law firm Echo Law announced it had lodged proceedings against Qantas in the federal court over the airline’s handling of credits and refunds.
But Qantas and Jetstar were not the only Australian airline with a significant amount of travel credits due to expire at the end of the year.
Virgin Australia CEO Jayne Hrdlicka revealed on Tuesday the airline had its own mountain of unclaimed Covid travel credits worth about $400 million.
Qantas cracks down on invite-only lounge
Mr Joyce was also reported to have reviewed the criteria for membership of the airline’s invite-only Chairman’s Lounge.
The exclusive lounge was brought back into the spotlight last week when Mr Joyce was grilled by senators at the hearing.
In early August, it emerged that Prime Minister Anthony Albanese’s son had been granted access.
Mr Joyce has reportedly since reviewed the membership list, which includes Australia’s top CEOs, A-list celebrities, and politicians.
The Daily Telegraph reported on Friday on email correspondence between a Qantas Chairman’s Lounge member and a Qantas regional manager that suggested there was a crackdown to ensure members are spending money with the airline.
“Recently, our Chief Executive Officer, Alan Joyce, and his executive team reviewed the membership listing for Chairman’s Lounge and the criteria required to be an ongoing member,” the Qantas manager wrote, according to the newspaper.
“New criteria now require the member to be linked to organisations to have a commercial airfares agreement with Qantas and agreed on revenue and market share targets.”
Qantas did not respond to news.com.au’s request for comment.
During the hearing, Mr Joyce refused to answer questions about whether he had any conversations with Mr Albanese before deciding to grant his 23-year-old son access or whether Mr Joyce had given any family members of any other politicians a similar free membership.
Mr Albanese faced criticism earlier in August for not declaring university student Nathan Albanese’s membership in his latest statement of registrable interests, despite not technically needing to as he is not listed as a dependent family member.
“I’m not going to comment on Chairman’s club membership,” Mr Joyce told the senate committee.
“I’ve got privacy issues where we will not comment on who’s in, who’s been offered it and why they’re there.”
Committee chair Liberal senator Jane Hume told senators that if they wanted to ask about the Chairman’s Lounge, they should declare if they were a member.
“As the chair, I would declare my membership of the lounge. Thank you very much to Qantas on bestowing that upon senators when they are elected to parliament,” Ms Hume said.
Greens senator Penny Allman-Payne and Nationals senators Bridget McKenzie and Matthew Canavan confirmed their memberships.
– with NCA Newswire
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