ALAN JOYCE

HE’S THE QAN­TAS CEO, AND AUS­TRALIA’S MOST BE­WITCH­ING BUSI­NESS LEADER, WHO STOOD UP TO UNIONS AND CYN­ICS, AND WHO COR­RECTED THE CAR­RIER’S FI­NAN­CIAL FREEFALL AL­MOST OVERNIGHT. HE’S ALSO THE MAN STEER­ING THE AIR­LINE TO­WARDS AN EVER-BRIGHT FU­TURE, OVER­SEE­ING

GQ (Australia) - - GENTLEMEN'S QUARTERLY -

It’s a long, cruel climb from pariah to mes­siah. But Qan­tas CEO, Alan Joyce, has trod­den that pocked path over the past half-dozen years and some­how, he claims, never en­dured a sin­gle day where he wanted out. In that same pe­riod he man­aged to turn a bas­ket-case busi­ness into the envy of the global air­line in­dus­try, and per­formed fi­nan­cial alchemy by tak­ing Qan­tas from a $2.8bn loss to a $900m profit in a sin­gle year. Along that same path were job losses – he axed 5000 Qan­tas staff in 2014 – sav­age head­lines (‘For the love of Qan­tas, sack Alan Joyce’) and pun­dits pre­dict­ing his demise. But right now, he’s head of a com­pany which, in the first half of the 2016-17 fi­nan­cial year, has made more money ($515m af­ter-tax profit) than Cathay Pa­cific, Air New Zealand, Sin­ga­pore Air­lines, Eti­had and Vir­gin Aus­tralia com­bined, “with a cou­ple of hun­dred mil­lion to spare”, he proudly points out. Sat in a Syd­ney of­fice that feels a lot like a Qan­tas lounge (many of his staff ar­guably dressed like flight at­ten­dants), 50-yearold Joyce seems boy­ishly ex­cited by what lies ahead; about a fu­ture that soon means di­rect flights from (West­ern) Aus­tralia to London and ex­pected non-stop routes from Mel­bourne and Syd­ney to New York and Europe by 2022. Qan­tas is also rolling out things we’re not so sure about – like free wi-fi on planes – while pon­der­ing the re­moval of in-flight en­ter­tain­ment screens. On the plus side, it’s also test­ing en­gines that can fly on fuel made from re­cy­cled refuse, and which may help re­duce the huge part avi­a­tion plays in CO -in­duced global warm­ing. Af­ter years of bat­tling in­dus­trial ac­tion, naysay­ers and eco­nomic con­di­tions, Joyce hasn’t lost his taste for a fight, ei­ther, lead­ing the cor­po­rate charge to pres­sure the fed­eral gov­ern­ment on mar­riage equal­ity. Not be­cause he’s an openly gay man, but be­cause he’s be­come – de­spite his lilt­ing, lin­ger­ing Ir­ish ac­cent – a very proud Aus­tralian.

GQ: Di­rect Perth - London ser­vices are set to take off next March. This is mas­sive news if you’re in WA, but should the rest of us be equally ex­cited? Alan Joyce:

The ef­fect on in-bound tourism for WA will ob­vi­ously be huge, and the amount of ex­cite­ment in Perth has been amaz­ing, but it will change things for every­body. Go­ing via Perth from the east coast is still go­ing to be one hour faster than go­ing through Dubai. This is a step change in avi­a­tion and it’s been huge news world­wide – some­one cal­cu­lated it gen­er­ated $70m worth of pub­lic­ity for us. And this is only a step­ping stone to the fact we’ll soon have air­craft that can do Mel­bourne and Syd­ney di­rect to New York and London.

GQ: It means an even­tual 21-hour di­rect flight to London from the east coast – that’s a cruel amount of time to sit in econ­omy. AJ:

Look back to when we first flew 14 hours di­rect to LA – a lot of the com­men­tary was around, ‘will peo­ple sit on a plane for that long?’ And now we do it without think­ing. We’re very con­scious of this, and what we’re say­ing is, can we reimag­ine how we in­ter­act with the cus­tomers? We’ve been work­ing with the Uni­ver­sity of Syd­ney and say­ing, ‘let’s start from scratch’ – what would you do with meals on a su­per long haul flight like this, and what would you do to keep peo­ple re­freshed by us­ing mood light­ing? What’s the best thing for your body? And the [Boe­ing] 787 [Dream­liner] is com­pletely re­designed for th­ese long flights. One of the prob­lems with ex­ist­ing tech­nol­ogy is that the en­gines that run the air-con­di­tion­ing take the hu­mid­ity out of the air­craft, whereas the 787 has a com­pletely new sys­tem, so the hu­mid­ity stays in, which makes you feel less jet lagged, and less dried out. You’ll no­tice a dra­matic dif­fer­ence.

GQ: How is it that air­fares, much like home­de­liv­ered piz­zas, seem to defy in­fla­tion? Is it com­pe­ti­tion, or bet­ter fuel econ­omy? AJ:

It’s tech­nol­ogy. When we first flew the Kan­ga­roo Route [London to Syd­ney], in 1935, it used to take 13 and a half days – with a few stops and even a train jour­ney in the mid­dle – so you can imag­ine the costs in­volved. Then, in the ’40s, with the in­tro­duc­tion of the 70-seat Su­per Con­stel­la­tions, the av­er­age air­fare was still 122 weeks av­er­age salary – the [cur­rent] equiv­a­lent of $200,000 to get to London... But then the 707 came along, and the price came down to 22 weeks wages. To­day, it’s one week’s. So, we’ve taken those tech­nol­ogy changes and passed them on to the con­sumer, and that’s what will hap­pen with the 787 – air­fares will keep get­ting cheaper, be­cause it’s 25 per cent more ef­fi­cient.

GQ: Cheaper air­fares also mean more flights and more C0 dumped in the up­per-at­mos­phere. AJ:

We’re pas­sion­ate about that topic, as 2

an in­dus­try, and the mem­bers of the IATA [In­ter­na­tional Air Trans­port As­so­ci­a­tion] have said we want to get to a point where, by 2020, we have car­bon-neu­tral growth from then on. We’re ac­tu­ally the only in­dus­try in the globe that’s agreed to a mar­ket-based mech­a­nism for pric­ing car­bon, post that date, for any growth in car­bon emis­sions. Our in­ten­tion is that, by 2050, we’ll have half the CO emis­sions that we had back in 2 2004. We also want sus­tain­able avi­a­tion fu­els and we’ve tri­alled some to show you can get the kind of en­ergy per cu­bic cen­time­tre out of sus­tain­able fu­els that you get out of jet fuel… We’ve also hired the CSIRO to do a study, be­cause there are a num­ber of dif­fer­ent mech­a­nisms, from food stocks to al­gae, or an­other big one is po­ten­tially us­ing city waste and con­vert­ing that into sus­tain­able fu­els. We think it’s a great po­ten­tial in­dus­try be­cause our fuel bill this year will be $3.2bn, which is ba­si­cally an im­port, and if we could con­vert that into a lo­cal in­dus­try, wouldn’t that be phe­nom­e­nal?

GQ: You’re also rolling out on-board wi-fi – we’re not con­vinced this is a good thing. AJ:

I was re­cently fly­ing back from London with a friend and he was say­ing, ‘I re­ally love the space you get fly­ing – wi-fi is not go­ing to be great, I don’t know why you’re do­ing it.’ Then he was say­ing that he and his wife missed out on a house at auc­tion be­cause he was fly­ing, and I said, ‘but you’ve just given me the per­fect ex­am­ple of why you need it.’ We’re not telling peo­ple they have to use it, and we’re not al­low­ing calls, no Facetime or Skype. But if peo­ple want to stream Net­flix, they can. I think, even­tu­ally, in the medium term, that kind of thing might re­place on-board en­ter­tain­ment, be­cause peo­ple can bring more con­tent with their own sub­scrip­tions than we’ll ever be able to pro­vide. And that could be a huge change – al­low­ing us to de-spec and take some more weight out of the plane. And weight is ev­ery­thing. They say on an A380 flight to Dubai to­day, nearly half the fuel is used just to carry the other half of the fuel. It’s a crazy statis­tic, but if you can re­duce weight, you can re­duce the amount of fuel you’re us­ing. And the pi­lot ben­e­fits of wi-fi are huge as well, be­cause they’ll now have real-time weather for the first time, and they’re very ex­cited about that.

GQ: You’ve said Aus­tralia is the ‘land of the fair go’, your brand rep­re­sents ‘The Spirit of Aus­tralia’ and so, speak­ing out on mar­riage equal­ity was an obli­ga­tion. How did you feel, then, when Im­mi­gra­tion Min­is­ter Peter Dut­ton told you to keep out of the de­bate and “stick to your knit­ting”? AJ:

When you’ve been in this job as long as I have, you get a thick neck on things – you have to be very hard nosed in your ap­proach and your views and not be in­tim­i­dated by any­body. What’s im­por­tant is that peo­ple un­der­stand what we’re say­ing – which is that par­lia­ment should just get on and do some­thing about mar­riage equal­ity, most Aus­tralians are fed up with this and just want it to hap­pen. The re­ac­tion from all of our stake­hold­ers to our ef­forts on mar­riage equal­ity has been over­whelm­ingly pos­i­tive, and there are a lot of share­hold­ers th­ese days that will only in­vest in com­pa­nies that have good cor­po­rate so­cial re­spon­si­bil­ity. I’ve also had so many em­ploy­ees say­ing it’s great that Qan­tas is sup­port­ing this cause, be­cause it af­fects so many of the 30,000 peo­ple who work here. There was a great Deloitte study re­cently that said if you take the LBGTI com­mu­nity, the in­dige­nous com­mu­nity and dis­abled peo­ple as well – who are all look­ing at forms of dis­crim­i­na­tion – they now rep­re­sent more than 30 per cent of your cus­tomer base. And they’re three times more likely not to rec­om­mend a ser­vice or a prod­uct if they be­lieve they’ve been dis­crim­i­nated against. So, if you don’t ap­peal to that seg­ment of the com­mu­nity, the eco­nomic im­pact is go­ing to be huge… Not only do we think it’s morally the right thing to do, there’s a strong busi­ness case. And we also find it makes a big dif­fer­ence in at­tract­ing tal­ent… I re­mem­ber do­ing an event and a young in­dige­nous girl asked if I could see a young in­dige­nous woman be­com­ing the CEO of Qan­tas one day. And I said, which I fun­da­men­tally be­lieve, ‘If a gay Ir­ish man can be­come the CEO of Qan­tas, then eas­ily a young In­dige­nous woman could.’ So we’re very happy with stick­ing to our knit­ting, but our knit­ting in­volves be­ing part of the com­mu­nity, and our knit­ting in­volves us be­ing out­spo­ken on is­sues like this.

GQ: In 2011, you went to war with the unions and con­tro­ver­sially grounded the fleet to bring the bat­tle to a head. It was a brave move, and no doubt one that also car­ried a great de­gree of dis­tress? AJ:

That was a tough year, be­cause there were a lot of is­sues hap­pen­ing. But I think the hard­est thing was when the en­gine on QF32 went [in Novem­ber, 2010, a Qan­tas A380 suf­fered an en­gine fail­ure on take-off in Sin­ga­pore]. I was on my way back from an in­vestor con­fer­ence in the city and the first we knew about it was we no­ticed the Qan­tas share price col­laps­ing… At the time, pic­tures of what looked like the tail of a Qan­tas air­craft were be­ing posted on so­cial me­dia, then a news agency re­ported we’d lost a plane. That was a hor­ri­ble mo­ment. I rang the Op­er­a­tions Cen­tre and they said that no, they were speak­ing to the pi­lot but he was busy, the plane was still in the air. So now we don’t know if our A380s are safe, that air­craft is still cir­cling, try­ing to burn fuel so he can land, and we have to make the call be­cause we have three A380s about to push back – is there a safety prob­lem? Our se­nior en­gi­neer could see from the pieces in pho­tos that it was a cat­a­strophic en­gine fail­ure, so we made the call to ground the fleet im­me­di­ately. In the end, that was my call, and it went on for 12 days, and Qan­tas was un­der a lot of pres­sure, even though it turned out to be a prob­lem with the Rolls-royce en­gine.

GQ: Then came the cut­ting of 5000 jobs as part of the 2014 com­pany re­struc­ture. And, af­ter Qan­tas re­ported a $252m first-half loss, the me­dia was call­ing for your head. How do you front up for work at times like that? AJ:

I don’t think you can worry about it. If you have a clear di­rec­tion, if you know you’re do­ing the right things, which will even­tu­ally pay div­i­dends – ex­cuse the pun – and peo­ple will be bet­ter off as a con­se­quence of the hard de­ci­sions, then you have the deter­mi­na­tion and the fo­cus to get through. Most lead­ers who go through pe­ri­ods like that, say you have to com­part­men­talise. So, when you’re at work, you’re fo­cused on what you need to do, you’re fo­cused on the is­sues that need to be ad­dressed. And at home, I wasn’t dis­cussing work with my part­ner, I tried to switch off. You have to make sure you keep that bal­ance – it helps you get through. And I’ve never felt I’ve been un­der enough pres­sure that I wanted to leave the job, or ‘I’m not cop­ing with this.’ … But they were tough de­ci­sions – 5000 peo­ple lost their jobs. And a lot of those jobs didn’t ex­ist be­cause the tech­nolo­gies and ef­fi­cien­cies just weren’t there any more. Dur­ing the dis­pute, in 2011, we were los­ing $20m a week. We had the prospect of that con­tin­u­ing for an­other year, or we could have given into the unions’ de­mands, which never would have let us re­struc­ture the com­pany the way we did in 2013, with all of the 30,000 peo­ple in the com­pany work­ing to­gether to try and fix the com­pany. And we fixed it in three years, which was ab­so­lutely amaz­ing.

GQ: So, you can sim­ply stick crit­i­cism in a box and shut it out? AJ:

Yes. In this job there are prob­a­bly 20 or 30 things you could be think­ing about or spend­ing your time on at any given mo­ment, but we’re here now, and all I’m think­ing about is this in­ter­view. And you’re do­ing that too, so why can’t you do it all the time? When you’re at home, you fo­cus in on your fam­ily life, or if you’re on hol­i­day, why would you think about the work you’re go­ing to do when you get home? We can all do it, it’s just a mat­ter of train­ing your mind. And we’re putting a lot of our se­nior man­agers through

“Par­lia­ment should just get on and do some­thing about mar­riage equal­ity. most Aus­tralians want it to hap­pen.”

this kind of mind­ful­ness train­ing now, be­cause it’s a great way of deal­ing with stress and get­ting peo­ple to have that kind of fo­cus, to avoid dis­trac­tions around them.

GQ: And that same abil­ity to ‘com­part­men­talise’ shields you from stress – and as­sisted in your rise to CEO? AJ:

It’s im­por­tant, as a leader, that you don’t demon­strate any stress – you’ve got to be the swan on the wa­ter. And I talk about op­er­at­ing at the right level. To use the air­line anal­ogy, most of the time in this job, it’s about stay­ing at 35,000 feet, but when you’re un­com­fort­able with some­thing and you’re not sure that it’s work­ing well, then com­ing down to five feet is OK. But if you’re op­er­at­ing at five feet all the time, as a CEO or a se­nior leader, you’re not do­ing your job.

GQ: A re­cent busi­ness sur­vey named you the CEO most Aus­tralians would like to work for – not de­spite of what you’ve done at Qan­tas, but be­cause of it? AJ:

It was a nice thing to read, but if any­one thinks that one per­son is re­spon­si­ble for a sig­nif­i­cant change like we’ve achieved, it’s ab­so­lute non­sense. There are 30,000 peo­ple in the com­pany, and your peo­ple are the key. When we were go­ing around talk­ing about the re­struc­ture in 2013, there was so much angst and worry from peo­ple who worked here, were they go­ing to have jobs? But we needed a big turn­around, and they pulled to­gether to make it hap­pen. And see­ing the pos­i­tive na­ture of the place now, it’s a real credit to all those peo­ple. Not even the top 10 peo­ple here can take credit for what’s hap­pened, the credit goes to ev­ery­one.

GQ: What of that re­cent pie to the face - can we con­firm it was lemon meringue? AJ:

Yes, though I’m not re­ally much of a pie man... There’s been a lot of things hap­pen over my time at Qan­tas, that was dif­fer­ent, but not un­usual.

GQ: You’re nearly a decade in the job, would you like to move on and do some­thing eas­ier, say, Prime Min­is­ter of Aus­tralia? AJ:

No, I’m not go­ing any­where. I love Qan­tas, I’m an air­line per­son, and the avi­a­tion in­dus­try is a very ex­cit­ing one to work in. qan­tas.com

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.