2020 CEO Survey: Alan Joyce, Qantas

The challenge from here is how the economy can stand on its own, once government support is scaled back, says Qantas chief Alan Joyce.

Qantas Group Chief Executive Officer Alan Joyce. Picture: AAP Image

What are the three enduring lessons or changes to flow from COVID?

I think we were all reminded of the importance of the central co-ordinating role of government. When the crisis struck everyone turned to the federal government. The challenge from here is how the economy can stand on its own, once government support is scaled back.

We are social beings and we don’t like being couped up in lockdown or working from home for months on end. Some of the flexibilities that were introduced will remain but by and large I expect that a lot of our pre-COVID-19 way of life will return largely because we thrive on human interaction.

It’s very hard to truly plan for Black Swan events. We had a playbook for pandemics which was shaped by what we learnt from SARS. And it sits there are an item on your risk register. But in reality, what we thought would take months to happen was taking weeks if not days. What flows from that is the need for companies to have a decent buffer so you can weather these kind of storms that are so hard to predict.

How would you rate the shape of the Australian economy as we head into the New Year?

The signs are that it’s extremely resilient. Since borders started opening up, we have already had millions of people book a domestic flight with Qantas and Jetstar. That gives us great confidence going into the new year.

But there are still quite a few unknowns. On borders, consumer confidence, on the global economy, on the timeline for the vaccine rollout. That uncertainty does give us reason to remain cautious, too.

What three reforms are needed to sustainably grow the economy?

Federation was meant to put a stop to states and territories going off and making their own decisions which then impacted on the rest of the country. But that’s exactly what we have seen with the patchwork approach to opening and closing borders by each of the states and territories. Health has to come first but it hasn’t always felt like that was the primary driver in the past few months. If decisions continued to be made like this, it will hold back our economic recovery and really damage confidence.

•Industrial Relations - The Government’s IR reforms need to provide more flexibility and certainty. With business-as-usual turned on its head by the crisis, we need an IR framework that lets employers and employees make adjustments more easily.

•Climate Change - The longer we wait to genuinely tackle climate change, the harder it will be. Its been heartening to hear the Prime Minister and other world leaders recently talking about climate change and taking action even as they are responding to the pandemic. COVID-19 may be the most talked about threat, but we can’t lose sight of the ongoing threat posed by climate change.

What are the three best growth opportunities for your company in 2021?

Domestic tourism is likely to go through a boom next year as international travel is largely off the cards. Before COVID, more than 11 million Australians travelled overseas each year, so the opportunity for the tourism industry is to convert these into domestic holidays instead.

Our frequent flyer business has had an extraordinary year given what’s been going on. They have added some big partners like BP fuel, grown existing partners with the likes of Woolies and expanded into car and home insurance. Despite being grounded for most of the year, frequent flyers have continued to earn points on the ground which they are saving up to use on holidays. When the Queensland borders finally opened the border, we had a record day of frequent flyers booking seats. 2021 will be another strong year for our loyalty business, particularly as we expect more frequent flyers from other airlines to switch to Qantas.

Our freight business is also benefitting from a shift to online shopping, much of which is expected to stay even after the crisis. We are adding more freighter aircraft and have picked up some new large customers so 2021 should be another strong year as far as that part of the business is concerned.

What impact will digital transformation have on your company?

We expect some people will use video conferencing instead of meeting in person, which is a fundamental change for an airline. But we don’t think that shift is going to be as profound as some might assume. It might be truer for meetings within a company but the feedback from our customers is that travelling to meet clients in person is still going to be a big factor. There’s also the trend of people moving to regional centres for lifestyle reasons who now need to fly once a week to the office in a capital city.

How would you rate business, State and Federal Government performance this year?

From a health perspective, all governments around the country deserve praise. When you look at how things are in Australia compared with the rest of the world, they have clearly done well.

We’ve been particularly impressed with how the Federal Government has responded. They made big decisions very quickly. The standout is JobKeeper, which has been critical for thousands of our people who were stood down.

NSW has clearly been the best performing state when it comes to getting the balance right between protecting the community and keeping the economy going.