The gravy plane: How Alan Joyce cultivated a PM and ruled the skies

This story is part of the October 26 edition of Good Weekend.See all 15 stories.

The Qantas Chairman’s Lounge is not one particular lounge, but a network of them in every mainland state capital and in Canberra.

These vast, hidden, hushed spaces allow members to relax, graze, work and network in privacy and luxury before their domestic flights. Behind the black sliding doors, simply marked “Private”, the chosen elite can order from the à la carte restaurant menu, partake of bottomless premium wines and spirits, recline on designer armchairs and read the daily newspapers (except, in 2023, The Australian Financial Review, which then CEO Alan Joyce had banished from Qantas lounges in response to my columns criticising the airline and his leadership). When a member’s flight commences boarding, a lounge attendant personally comes and informs them.

This offering was established in the 1980s by Australian Airlines, before its 1993 merger with Qantas, and was a facsimile of Ansett’s exclusive Managers Lounge. It was (and remains) a globally unique offering. While the US and some European carriers have invitation-only tiers in their frequent-flyer programs that come with worthy perks, none of them operates dedicated lounges for those customers. Members of the Chairman’s Lounge receive those same perks, such as complimentary upgrades to business class (subject to availability), or to first class on international flights, and a dedicated VIP service line, the value of which increased exponentially during and immediately after the pandemic. Chairman’s Lounge members did not wait hours on hold trying unsuccessfully to redeem a COVID credit or track down a lost bag. And post-pandemic, should their child be stranded by a missed connection at a foreign airport, they are one phone call away from a salvage operation unavailable to mere mortals.

And who are these members? They are the board directors, CEOs and senior executives of Australia’s major companies – or any company that spends sufficient millions each year travelling Qantas. They are virtually every member of federal parliament, and state government ministers; they are the secretaries and deputy secretaries of all Commonwealth (and many state) departments, and senior military officers. They are the chairs and CEOs of government agencies, including Qantas’ regulators: the corporate cop, ASIC; the competition cop, the ACCC; and even the safety regulator, the Civil Aviation Safety Authority. All judges of the Federal Court and the High Court are Chairman’s Lounge members, as are newspaper editors, certain commentators and breakfast television hosts, and an assortment of B-list celebrities. And in most cases, their spouses are also members. In 2023, there were about 5000 consecrated primary members of the Chairman’s Lounge – 9000 if you count their approved spouses.

The Chairman’s Lounge is a speakeasy for Australia’s ruling class, yet it is so much more than that. Possessing its membership means passing the mystical velvet rope of high social status – something Western consumer culture conditions us all to strive for. It is confirmation that you’ve made it, entitling you quite literally to breathe different air to regular people. Of course, it is a classic chimera, because if you’d really made it, you’d be at the ExecuJet terminal boarding your own Global Express. Most Chairman’s Lounge members are only there in return for spending a tremendous amount of other people’s money.

This system has been terrific for Qantas because while Australia’s leading corporate and government figures would never shell out their own money on a five-star ego massage, they are more than happy to squander shareholders’ or taxpayers’ funds on the very same. Countless Australian companies elect to spend 25 per cent more on a travel deal with Qantas – instead of requiring staff to take the cheapest available flight – solely because their boards and top executives prefer the lounge memberships to the savings. The Australian government’s travel policy of the “lowest practical fare” is openly flouted by MPs and public servants, with Qantas receiving more than 80 per cent of Commonwealth spending on domestic flights. In the 2023 financial year, Virgin Australia received only 11 cents out of every dollar spent on domestic travel by MPs and their staff, and just 9 cents in financial year 2024, despite Virgin offering the lowest practical fare at least 90 per cent of the time. Such was the power of the Chairman’s Lounge, the Shangri-la of corporate patronage.

When it comes to Chairman’s Lounge membership … otherwise high-functioning individuals completely lose their senses.

It was also the power of Qantas’ loyalty program and public officials’ hunger for status credits. Achieving lifetime Qantas gold or platinum status courtesy of the taxpayer was a holy grail pursued by many, as a soft cushion for post-political life. Kevin Rudd’s finance minister, Lindsay Tanner, ended the accrual of frequent flyer points on all government travel in 2010, saving $40 million per year, but he fatefully allowed politicians and public servants to continue accumulating status points.

Qantas well understood the enormous clout derived from operating what Joyce himself once described as “probably the most exclusive club in the country”. The Chairman’s Lounge enabled Joyce to render the pointy end of modern Australia in his own image.

He alone decided who was in and who was out – and inevitably, this bred fear of, and kowtowing to, Qantas among this ruling class. When it comes to Chairman’s Lounge membership, current, aspiring or former members do not behave rationally. Highly intelligent and otherwise high-functioning individuals completely lose their senses. Those who eventually received Qantas’ merciless form letter of annihilation – “I trust you understand that we are not able to extend your membership beyond its current expiry” – often fell into a kind of madness.

“Let’s just say it’s a very valued benefit,” former Qantas chairman Leigh Clifford concedes drily. “Some of the calls you get, and some of the pleadings, are unbelievable. People forget that it’s a commercial decision. I had one guy ring me up and say, ‘I’m going to take this further!’ I’m not sure who he was going to take it to after me.”

The receipt of benefits by company executives is a matter for those companies and their shareholders, but benefits provided to politicians are a matter of public interest. Sadly, the Chairman’s Lounge is where Qantas’ skilful influence-peddling meets the spectacular entitlement culture of the nation’s parliamentary caste. A large part of the resulting problem is the opacity of these benefits, due to the scandalously loose disclosure regime governing them. All MPs are required to declare any gifts, sponsored travel or hospitality (including to their spouse or dependent children) worth more than $300. Yet there are no practical consequences for failing to do so. Despite the $300 reporting threshold, MPs performatively declare every worthless souvenir handed to them by interest groups: books, bottles of wine, a box of chocolates, a pair of thongs. It is an affectation of pedantic transparency, behind which many quietly enjoy the far grander perquisites of office.

Flight upgrades are specifically required to be disclosed and while some MPs disclose them, others disclose none. “Like the American alliance and the offshore processing of asylum seekers,” I wrote in the AFR, “undeclared airline freebies are a bipartisan article of faith.” Anthony Albanese regularly reported flight upgrades for himself, though he did so only once for his family. In July 2009, when he was transport minister in the Rudd government but travelling in a private capacity, he received an upgrade to business class from Qantas on Sydney-Los Angeles return flights. In April 2010, he and his son received a “ticket upgrade” on Sydney-Rome return flights from Emirates. No classes of travel were specified, making it impossible to know the precise monetary value of this gift, but it would’ve been in the vicinity of $10,000. Again, in July 2011, and still transport minister, Albanese “accepted upgrades from Emirates travelling unofficially to and from Europe”. On a personal trip to Hawaii on December 29, 2012, he was upgraded to business class by Qantas from Honolulu to Sydney. And in March 2013, Albanese travelled with Joyce on Qantas’ inaugural flight to Dubai, as its partnership with Emirates commenced in earnest.

PM Anthony Albanese with then Qantas CEO Alan Joyce at a 2023 gala celebrating the airline’s 100 years of operation.Credit: Getty

The upgrades continued after Labor returned to opposition, when Albanese became shadow minister for transport. In September and October 2013, Albanese received free upgrades from economy to business on 10 different “privately funded flights” within Australia on Qantas and Virgin. He was then upgraded by Qantas on “personally funded flights” from Sydney to London on November 30 and from Rome to Sydney, presumably on Emirates, on December 5. Again, Albanese did not disclose which class of travel he was upgraded to or from. It would be a safe presumption that he paid for an economy ticket in the full knowledge he would never have to set foot in that unholy cabin. The price difference between a return first class, Sydney-London ticket and an economy ticket was more than $10,000 – or
4 per cent of a shadow minister’s (then) pre-tax annual salary. Even the fare difference between business and first was about $5000 (as was the differential between economy and business).

The new prime minister was an ‘asset’ the airline had been developing for 15 years.

In October 2016, Qantas again upgraded Albanese’s “personally funded” flights both ways between Sydney and London but again, he did not identify what class he was upgraded to or from. And in October 2019, by which time Albanese was opposition leader, Qantas again upgraded him on a flight to Honolulu. According to Qantas insiders, Albanese would liaise with Joyce directly about his personal travel. While other Qantas executives could authorise “space available” upgrades in flight bookings, meaning an upgrade would occur only if there was an empty business or first class seat after check-in had closed, only Joyce could issue “confirmed” or guaranteed upgrades, the kind that Albanese was treated to.

None of this made Albanese Robinson Crusoe in the parliament – far from it – but neither did that make it right. In all of these cases, Albanese was either transport minister or shadow transport minister, so he was accepting gifts cumulatively worth tens of thousands of dollars from one of the largest and most important stakeholders in his area of policy responsibility, creating at the very least a perceived conflict of interest regarding the independence of his decision-making. Yet nobody batted an eyelid. That was the most disturbing part – that it was utterly common practice in Australian politics. It was a slice of fortune that fuelled Qantas’ hubris: the new prime minister was an “asset” the airline had been developing for 15 years; a transport minister who’d been upgraded to the top job.

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MPs are also required to declare “membership of any organisation where a conflict of interest with a member’s public duties could foreseeably arise or be seen to arise”. Most MPs declare their Chairman’s Lounge and Virgin Beyond memberships, but many do not – and again, there are no repercussions. Albanese first disclosed his Chairman’s Lounge and Virgin club memberships in 2019, more than 20 years after his election to parliament. He never disclosed the Chairman’s Lounge membership of his then wife Carmel Tebbutt – the widely respected former deputy premier of NSW – nor that of his subsequent partner, Jodie Haydon, despite his “requirement” to do so. According to multiple senior Qantas sources, who requested not to be named, soon after Albanese became prime minister in 2022, he asked Joyce to make his son Nathan a member, too. What was Joyce supposed to say?

Minutes after I’d put the fact of Nathan Albanese’s Chairman’s Lounge membership to the prime minister’s office for comment, for a story I was writing for my then employer, The Australian Financial Review, Anthony Albanese called the masthead’s then editor-in-chief, Michael Stutchbury. As Stutchbury recalls, the PM “made the case that politicians’ families should be off-limits, but he came away knowing we weren’t going to kill the story, so he was pretty unhappy about that. I think he’s still unhappy about that.”

Stutchbury had already sense-checked my story with other senior heads in the AFR newsroom, concluding, “No one was necessarily saying it was a terrible thing, but there was a public interest in knowing that.”

It was Alan Joyce, not Anthony Albanese, who responded to my story, which was still hot off the press when Joyce was door-stopped by a huddle of reporters at a tourism industry event in Brisbane on August 3, 2023. “I don’t deny it and at the same time [I] don’t confirm it,” he said, as his PR minder huffed at the journos to change the subject. “I’ve been good mates with Albo for some time,” he added defiantly.

Chairman’s Lounge membership, Joyce insisted, “is not a gift, it’s a commercial arrangement that we do. Some of the politicians are … our largest flyers and we facilitate access to our lounges if you’re in BHP, if you’re in Rio. The government has a big contract with us – it’s absolutely no different.”

Joyce was presenting an account of the situation that was hopelessly compromised by logical shortcomings, the first quite obviously being that Albo’s son was not a member of the government, nor was he an MP’s spouse. The second was that BHP and Rio Tinto did not regulate Qantas. They couldn’t deny traffic rights to Qantas’ competitors, defund the ACCC’s airline monitoring powers on Qantas’ behalf, or shower Qantas with taxpayer subsidies.

Thirdly, the exact number of Chairman’s Lounge memberships that a mining company or bank might receive was determined by how much it spent on travel, and those companies decided which of its executives or directors got them. In contrast, Qantas gave Chairman’s Lounge privileges to literally hundreds of Commonwealth officials, and Alan Joyce decided which ones. Yes, the government spent many multiples of what even the airline’s largest corporate clients spent, but the number of Chairman’s Lounge memberships given to government figures was not formulaically linked to that spend. How could it have been, when the government’s travel policy was supposed to be based not on any guaranteed minimum paid to Qantas, but on every government traveller taking the cheapest flight of the day? What’s more, the travel policy explicitly stated that “the ability to access an airline lounge is not to be considered” when booking flights. Here was the entire point: the Chairman’s Lounge was an inducement – and a very successful one – for government travellers to defy policy and misspend public money.

“This is just a nonsense that Qantas has this unbelievable influence that can dictate anything with the government,” Joyce railed at the Brisbane doorstop. “I don’t know how that mindset has got there because it’s just not right.”

Joyce could not see that the mindset he was denouncing was that of the overwhelming majority, and indeed, one of his own creation. As proof of Albanese’s non-capture, Joyce said the then-transport minister “had a go at me when we grounded the airline in [October] 2011”. Albanese was so angry he didn’t even ask Joyce for a free upgrade that Christmas – though he was straight back on the Qantas-Emirates gravy train the very next year.

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It emerged in June 2023 that the Albanese government was actively considering an application by Qatar Airways to double its flights into Australia’s four major cities, from 35 to 70 a week. The Qatari government had in fact initiated the process in August 2022; Qatar Airways CEO Akbar Al Baker put the inspiration in a nutshell on Sky News in October that year, pointing out that Qantas had cut its international flights by 50 per cent and “more than doubled the price of airfares to the Australian people [for] the benefit of shareholders”.

Its case was also being pushed hard by Virgin Australia, which had struck an alliance with Qatar Airways in 2022. Virgin’s private equity owner, Bain Capital, was looking to refloat the company on the Australian Securities Exchange and was rumoured to be talking to Qatar about taking a cornerstone equity stake. Qantas was anxious about Qatar’s deep pockets, and the brutal experience of competing with Virgin when, the previous decade, it had been majority-owned by Air New Zealand, Singapore Air and Etihad.

Transport Minister Catherine King met with Virgin CEO Jayne Hrdlicka and discussed Qatar’s application on January 23, 2023. According to Hrdlicka’s later evidence to a Senate inquiry, King told Hrdlicka that Alan Joyce was unhappy that the department was recommending negotiations with Qatar and that he’d asked to speak to King. “Nonetheless,” Hrdlicka said, “I was left with a very clear impression that a decision to proceed was very compelling and imminent. Based on this conversation, I felt comfortable that Qatar would be granted additional air rights.” Her comfort would be short-lived. Behind the scenes, the Qantas influence machine had jolted into action.

Virgin CEO Jayne Hrdlicka.Credit: Glenn Campbell

According to one Joyce lieutenant, “We were told the department was going to give Qatar a big increase in traffic rights. That was bad news given how they behave commercially. We had a view and we were entitled to put that view. We said, ‘How are we hearing about this at the end of the process?’ ”

Qatar’s application was in the ether when Joyce met with King – and separately with Albanese – at Parliament House on November 23, 2022. Albanese then attended and delivered a stirring speech at Qantas’ centenary gala dinner on March 31, 2023 and Joyce also met with King at Parliament House on May 10. By April, Hrdlicka was worried that Qatar’s bid seemed to have stalled. When she spoke to King again on May 1, it “was a very different conversation from my conversation with the minister in January”. King now indicated that the government had reservations about Qatar’s application in light of “the Doha Airport incident of 2020″. Hrdlicka was completely taken aback.

The Doha airport incident was a grisly story with lingering consequences. On October 2, 2020, a newborn girl was found inside a plastic bag in a bathroom bin at Doha’s Hamad International Airport. Police conducted an urgent search for the child’s parent/s, including onboard 10 aircraft at nearby gates. One of these was a Qatar Airways flight bound for Sydney. Officers ordered numerous female passengers, among them 13 Australians, off the flight and into ambulances, where they were subjected to abdominal examinations to ascertain whether they’d freshly given birth.

The barbaric and incompetent episode shocked the public and made global headlines. Then-prime minister Scott Morrison described the incident as “appalling” and “unacceptable”. Qatar’s then-prime minister Sheikh Khalid bin Khalifa Al Thani expressed his “sincerest apology for what some female travellers went through”, while his deputy described the incident as “a violation of Qatar’s laws and values”. The police officer in charge was sacked, charged and convicted, and received a suspended jail sentence, while the child’s mother – who had been on another flight entirely and was identified only as being of “Asian nationality” – was charged with attempted murder and her extradition sought. In November 2021, having received a confidential report from the government of Qatar, Morrison declared himself satisfied, noting that “there was an investigation, there has been a conviction, and there’s been a significant change to airport processes in Qatar”. Diplomatically, the case was closed.

Quite understandably, five of the women put through this ordeal in Doha didn’t see it that way, and in 2022 they sued both the airline and Qatar’s Civil Aviation Authority in the Federal Court of Australia. Qatar Airways argued that it had no ability to refuse the directions of Qatari police and, handing down its judgment in April 2024, the Federal Court agreed. The judge found that “the proposition that Qatar Airways was able to exert any relevant control over the officers conducting the police operation or the nurse in the ambulance can fairly be characterised as fanciful, trifling, implausible, improbable, tenuous or one that is contradicted by all the available documents”.

In a quest to discover who had abandoned a newborn baby at Qatar’s international airport in 2020, numerous female passengers were forcibly examined. Credit: Doha News/AP

And yet in July 2023, King rejected Qatar Airways’ bid for more flights. The airline only learnt of its rejection when the AFR broke the news and the AFR only learnt of the rejection because King had written to the women suing Qatar to inform them of her decision before she’d even informed Qatar. Confusingly, the following week, King told The Sydney Morning Herald that the Doha airport incident was not a reason for her blocking Qatar’s new flights. The idea that the system was rigged in favour of Qantas might never have flourished so robustly had King not made the most extraordinary hash of explaining herself.

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The deal between Qantas and Emirates, in operation since 2012, was far deeper than the nascent alliance between Virgin Australia and Qatar, which merely sold seats on each other’s flights and offered reciprocal frequent-flyer benefits. Qantas and Emirates did those things too, but they effectively operated as a single company, even jointly setting their airfares and flight schedules. The ACCC granted authorisation for this cartel conduct in 2013, 2018 and, incredibly, again in August 2023, despite the two carriers commanding a 52 per cent market share between Australia and the UK and a 37 per cent market share between Australia and Europe. Irrespective of its lessening of competition for the travelling public, Anthony Albanese was an unabashed fan of the Qantas-Emirates tie-up. In May 2023, he told a Labor Party fundraiser in Brisbane that it was one of his proudest achievements as transport minister in the Rudd and Gillard governments.

According to a senior Albanese confidant, ‘Alan getting to Albo was the only thing that made sense.’

In the battle with Qatar, Qantas was just a front, behind which loomed Emirates, the world’s fourth-largest airline. Sir Rod Eddington, a former CEO of Cathay Pacific, Ansett and British Airways, and who also served on the Qantas board, observes: “Emirates was the major winner in keeping Qatar at bay. I don’t know the minutiae of the Qantas-Emirates joint service agreement but I have no doubt that Qantas is an economic beneficiary of Emirates’ success on the kangaroo route and it was very clear that for Emirates, more capacity for Qatar would have been a problem.”

Qatar Airways CEO Akbar Al Baker, who applied to double the number of the airline’s flights into Australia’s four major cities.Credit: Bloomberg via Getty Images

Senior Qantas executives now concede privately that Qantas was acting at Emirates’ behest in lobbying against Qatar’s bid for additional flights. It was an audacious proxy mission in circumstances where the lack of available seats had sent international airfares skyrocketing and Emirates itself was only operating half the flights it was allowed to Australia. One Joyce lieutenant says Emirates president Sir Tim Clark was “exercised” by the news that Qatar was on track to double its traffic rights, having spent 20 years building Emirates’ Australian rights (most of which, ironically, was opposed by Qantas before the two climbed into bed together; it was also ironic because Emirates had doubled its rights in one hit – from 42 to 84 per week – in 2007). Another told me, “It probably made more sense for [Qantas] to be in business with Qatar than Emirates but Alan’s allegiance to Tim Clark was just so strong. That’s the story that everyone missed: we did all that bidding on [Clark’s] behalf, and we sustained all the damage.” Qantas would become a victim of its own vaunted lobbying prowess.

“It was a mistake by the Australian government to deny Qatar Airways,” says Eddington, who is nevertheless a long-time friend and supporter of Albanese. “They continued flying here through COVID when pretty much everybody else had pulled the pin … I have no idea what went on in Canberra, but Qantas are masters at getting the outcomes they want – particularly on the traffic rights front.”

By September, the Qatar imbroglio was consuming the Albanese government. Catherine King had by then offered three completely different reasons for rejecting Qatar’s new flights, none of which made the least bit of sense. Her inability to provide a rational explanation – or even just stick to a single irrational explanation – had created a political debacle. “She just keeps changing her story and I don’t know what’s fact and what’s fiction,” marvelled Opposition Leader Peter Dutton.

Transport Minister Catherine King.Credit: Michael Quelch

No lesser figure than the Labor Party’s federal president Wayne Swan called for Albanese to conduct “an appropriate review” of its Qatar decision. With South Australia’s Peter Malinauskas, Western Australia’s Roger Cook and Queensland’s Steven Miles also in Qatar’s corner, Albanese was now also at odds with the Labor leaders of three states.

Yet the prime minister remained a picture of defiance, shouting into a clamorous Question Time that Qatar “can fly as many flights as they like into Adelaide, into the Gold Coast, into Avalon, into Hobart and into Canberra”. These were Alan Joyce’s talking points on Qatar, and Albanese scarcely diminished the perception he was in cahoots with the Qantas CEO by parroting them in the House. Virgin’s Jayne Hrdlicka responded archly that airlines “need to add seats where the demand exists; it’s a bit of an obfuscation to say ‘fly into cities where there is no demand’.” Indeed, Qantas didn’t operate international flights from any of those airports. “How can they ask us to fly to a destination – like Darwin or Cairns – where there are only 20 passengers to Europe?” a confounded Akbar Al Baker wondered to me. Albanese told parliament that he had never been lobbied by Alan Joyce over Qatar’s flights (something Joyce had refused to confirm or deny). “I had one extensive conversation with someone about Qatar [and] it was not someone from Qantas,” he said. Nobody believed him.

The Qatar matter was never satisfactorily explained, and short of forcibly injecting Joyce and Albanese with truth serum, it never will be. The Department of Infrastructure and Transport had supported granting the additional flights; it told a Senate inquiry into the Qatar affair that it sent a negotiating mandate to Catherine King in January 2023, which was the next step towards approval. The Department of Foreign Affairs and Trade also supported the flights, as did the powerful trade minister, Don Farrell. King herself was supportive until suddenly she wasn’t. In parliament, she repeatedly refused to confirm or deny whether she had been lobbied by Qantas or directed by Albanese to block Qatar’s application.

According to a senior Albanese confidant, “Alan getting to Albo was the only thing that made sense.” Albanese lost a painful amount of political skin on this issue and refused every opportunity to back down or even compromise. There is only one plausible explanation for that refusal: it was personal. Says his confidant, “He’s a relationship guy and Alan cultivated him for a long time, even in opposition. Albo’s a loyal, loyal guy.”

This is an edited extract from The Chairman’s Lounge: The Inside Story of How Qantas Sold Us Out, by Joe Aston (Simon & Schuster, $37), out October 28.