FLYING KANGAROO BOUNCES BACK
It’s been Quite A Nice Turnaround, All Smiles for Alan Joyce having led Qantas out of trouble and back into the black after a very turbulent few years, writes Sarah Blake
WHEN Qantas chief Alan Joyce realised the scope of the staff cuts he needed to make to steer the national carrier back to profit, he hit his lowest point.
Friends and mentors were among the 5000 workers to be axed during the three-year transformation on which he embarked 18 months ago, and the man who had already stared down unions and made history to ground the national fleet was gutted.
“That was horrendous,” he said of the announcement in February last year.
“A lot of people I knew, a lot of people that were colleagues, a lot of people I worked with for a long time (were lost). But we had to focus on the 28,000 jobs that were going to be left and protected and making sure that we had a business that was successful and viable for the future.”
Thursday’s annual results are widely seen as vindicating Joyce’s actions. Qantas’s $1.6 billion rebound, which turned last year’s $646 million loss into a $975 million profit, was the airline’s strongest showing since the global financial crisis, and shareholders were rewarded for the first time since 2009 with a 23¢-a-share cash distribution. But while the numbers appear to be in place, the biggest challenge for the 95-year-old company has been the cultural change required to turn an admittedly entitled workforce into the lean and competitive operators needed to win over a spoiled-for-choice customer base.
Joyce says a conversation earlier this year with a veteran flight attendant brought home just how much the people at Qantas had to lift their game.
“She said when she first started almost 20 years ago, ‘We felt like the customer was lucky to be there, and if they wanted a drink, we’ll give you a drink, but why are you annoying us?’ Now we realise we are fighting for every customer and we need to deliver,” he recounts.
“You can talk about the financial changes and how that’s improving, but it’s the cultural changes that are hardest to do, and having people who are engaged or interested, having people who are delivering customer service because it’s so competitive out there – we are dependent on what they do every day.”
That day was a turning point for Joyce who, since being appointed chief executive in 2008, has used the sixmonthly roadshows with the engineering staff at Qantas’s Brisbane hangar as a quick and easy mood-check on his people.
“The first time I walked out, maybe four or five hundred of them were lining up for the presentation, arms closed, you know, very reluctant to listen,” he says. “The last one we did, which was amazing, the engineers are all there, listening, very polite, and asking extremely strategic questions, you know ... Why is Asia important to us? Why do we need to grow there? They were talking about the share price, they knew the share price better than I did. They said obviously the strategy is starting to work because the share price is recovering, and it was like a health assessment of the company. They were very passionate about it, very different from where I was six years ago.”
Qantas on Thursday also confirmed the purchase of eight Boeing 787-9 Dreamliners (below), which will open new, longer international routes.
Veteran pilot Captain Alex Passerini says this announcement has done more to lift the mood at Qantas Sydney HQ than anything else on Thursday.
“With 23 years in the airline I have seen my fair share of ups and the downs and the last two years or so have been very tough on a few fronts,” he says. “But this is a terrific day for us.”
And he says there is some surprise within the airline at the speed of the turnaround.
“I am an optimist by nature so I always take the positive view and to my mind I always thought we could turn it around,” he says. “We knew internally if we put our heads down we could effect the change that was necessary, but I didn’t think it would be possible at this speed.”
Whether Qantas has done enough itself to ensure its long term future remains to be seen, but Joyce says it is this question that guides each decision he makes, including grounding the fleet during industrial action in October 2011 – an action which drew fierce public criticism.
“In the boardroom we have a big board table, as you’d expect with a company our size, a $16 billion company, but in the corner there’s a little table,” Joyce says. “And that little table was the first board table we had. It was the table where the articles of association were actually signed by our three founders in 1920 in a little hotel up in Queensland.
“So we have always been very conscious of being around for at least the next 95 years and I think we can see more of that future becoming real every day as we make this transformation.”
The last two years or so have been very tough on a few fronts