Is Alan Joyce doing a good job?

[eastwest101]

Read the link provided by mannej.

I'll add my vote to the complicated financial anti-hedging camp. Perfect example of simple hedging is "buy staw hats in winter" which is not so silly, but when it gets to the scale of the CX losses and say what Pasminco went through, then that sort of hedging is idiotic - its basically taking your income down to the casino and betting on red or black, either way the house wins in the long run.

But I will agree with winfred as well - AJ inherited a shockingly bad fleet strategy and then "doubled down" with the B787 order after the A380 mistakes, and I argue that he has been there long enough to correct or adjust the fleet planning.

Fleet choices aside - there have been other problems like the QF Sales act where he can't do much about it but the biggest problems are all to do with bloated costs/overheads. Too many short term tactics/distractions, mixed messages and no long term strategy. The excuses are a bit too familliar and if you inserted the text of excuses in his recent loss into the "challenges ahead " part of a speech in say 2008, you would see the same things repeated year after year! These challenges are not unique to QF (except for the QF Sales Act).

Brand - constantly putting down one part of the brand and then expecting people to support it in some sort of patriotic fervour
Staff - they can be an asset or a liability - depending on how you manage/treat them
Costs - if wages are a problem then either take the workforce with you or do some serious hard core cutting and take the flak - neither was done
Efficiency - its a capital intensive industry - planes sitting on the tarmac at LHR and LAX do not make money
Input costs - after telling us how great their fuel hedging strategy is why was it not continued? And look at the price of fuel over 2007-2013 - not that different.
Economy of Scale - a concept that seems foreign to cost cutting managers whom cut production or product but will not cut the overheads
Macro factors - after the record high AUD with record outbound tourism how was QF either not getting more pax or buying more aircraft while the AUD was so high?
Competition - a ham fisted attempt to drive DJ out of business while the overseas competitors came in and ate your lunch, meanwhile your LCC only succeeded in decreasing yields, annoying your loyal customers, alienating your staff and bleeding the parent company dry.
Yield/Profit margin - flood the market with more capacity and then complain about falling yields, not very smart.

 

[Mwenenzi]

Hedging is not a gamble. It always works. You comit to buying fuel in the future based on a price set now.

(My bolding)
Perhpas you would like to tell these guys: Jetstar Pacific execs held in Vietnam following fuel hedging losses - 1/8/2010 - Flight Global and Jetstar Pacific Airlines - Wikipedia, the free encyclopedia
Fuel is such a large portion of operating costs if you get fuel hedging "correct" and fuel cost lower than the opposition, you are a genius. Getting the hedge wrong is not so good.

 

[moa999]

More so that people in Vietnam Govt just don't understand hedging... Probably exacerbated by someone having to sign an $xx_ cheque.

 

[drron]

Only? How long does he have to be there, before his fanbase stops blaming his predecessors?

I would rather see AJ go.I don't think his performance has been great but he is getting a lot of flak that is undeserved.So I come out with my defence of the underdog.
When it comes to fleet choices and even industrial relations as well as higher costs V his competition his predecessors do deserve a lot of the blame.
As well I doubt there would be a heck of a lot difference if AJ had not been made the CEO.

 

[Pushka]

Sometimes you just need a symbolic cleanse. I think this might be one of those times. Have a new CEO and everyone can drop the blame game and get on with the required changes to structure to try make Q profitable.

 

[DaveB]

Sometimes you just need a symbolic cleanse. I think this might be one of those times. Have a new CEO and everyone can drop the blame game and get on with the required changes to structure to try make Q profitable.

Agree and hopefully no past scores or agendas to settle.

 

[JohnK]

If he was hired to oversee the demise of Qantas then Alan Joyce is doing a great job....

 

[flying_double]

In a word, no. But he's making a cracker of a business case study for the undergrad and postgrad students of tomorrow!

 

[spencerdavid]

It was Harry Truman who said "the buck stops here". 5 years has seen share price plummet, dividends disappear, profits turn into losses,
market shares erode, workforce loyalty disappear, routes cut and Skytrak quality rating fall year after year. The buck stops at the CEO's
desk. Alan has to accept responsibility and resign

 

[JohnCarrWestwood]

For the past few days, the hottest topic must be Qantas and Alan Joyce. The debate (or shouting match) between Jeff and Mark on Sunrise this morning is one of the most entertaining one.

There are bits and pieces of opinions on this topic expressed by members here in different threads but I think it is a good idea to start one dedicated to this topic.

1 What do you think about Alan Joyce and his performance as the CEO of Qantas for the past 5 years?

2 Are you in Mark Latham's camp or are you with Jeff?

3 Do you think Qantas has a future as a premium domestic and international carrier?

4 What would be your turnaround strategy if you were appointed CEO of Qantas?

1 Regardless of his actual performance ( appropriate or lacking) much comment/opinion is based on perception of personality, charisma and personal appearance.

He has the public personality and charisma of a brick and unfortunately for him he acts/sounds like a jumped up short cough which does nothing to alleviate the first two issues.
Wrong, irrelevant ........but that's folk, folks.

He rubs me up the wrong way the moment he opens his mouth so his utterances are tainted..

I ALWAYS fly qantas BUT...............................

2 Mark who?

Jeff who?
Both Rabble rousers of the first order


3 Future as domestic and or International. Why not?

4 Plan to fix things?.. Show me the numbers . Blind speculations have no value

 

[JohnCarrWestwood]

Sometimes you just need a symbolic cleanse. I think this might be one of those times. Have a new CEO and everyone can drop the blame game and get on with the required changes to structure to try make Q profitable.

Like our governments you mean?

 

[Rodster]

It amuses me that most companies when results are poor & share prices are declining, that it is generally only the lower staff that lose their jobs. It is obvious that Alan Joyce & the Qantas Board have not only lost the confidence of the General Public but their own staff. Ask any staff member what they think of the decisions that are made by the "top brass" at Qantas & in-particular Alan Joyce. Majority will tell you, that a large number of decisions made make no sense, and in fact cost the Airline money. I understand that the job of a CEO is not easy, and your decisions won't always make you the flavour of the month with all your staff, but I have never seen morale so poor in an organization as I have seen at Qantas.
I would replace the Qantas Board & Alan Joyce, as it is obvious that the current management don’t have what it takes to take this Airline forward.

 

[Peter Gray]

Is Alan Joyce doing a good job? Most definitely NO. Since becoming CEO he has invested huge sums of money in attempting to set up deals with airlines in Asia effectively starving Qantas of funds it needed to maintain or improve its equipment and performance to remain a full-service airline. The capitalisation of the airline has been reduced by some 80% and the share price has nose-dived. His arrogance in grounding the airline completely shows his total disregard for the travelling public and his loyal customers and ultimately achieved nothing. His attempt to destroy Virgin by flooding the domestic market with seats to rival and exceed those added by Virgin has resulted in a vast overcapacity which has hurt Qantas as much as it has Virgin. He obviously doesn't believe in a competitive environment which can benefit both/all domestic airlines. He learns nothing from history, i.e. Virgin Atlantic's battle with BA which has seen VA grow and BA contract over the years. In any other publicly listed company a CEO who performed so disastrously would have been sacked long ago. There are some very capable people who could turn Qantas around but his presence is currently blocking them from doing so.

 

[raleyoz]

In short NO

Whilst I agree AJ shutting down the airline to achieve an objective may have worked, the Management and the Board , forgot the 1 critical factor that is killing them now. Customer confidence, customers have lost trust in the Brand and the management.

Also, where is the vision, why should we customers stick with the brand / where are we going?
People pay a premium for products they want to be associated with , Qantas has failed to create/Develop that equity, They used to have it in many Australians eyes. Ie I'm flying with QF because its the safest.

I am yet to see a strategy of cutting your way to prosperity,

Questions over decisions such as

J* Asia, as far as I understand has been poor
Not convinced the EK deal has made majority happy
Partnerships with CS, what were they thinking
poor relationship with CX,
challenging Virgin with the 2 planes to their 1

I am just not convinced he has a plan to get out of this , seems very slow to react, how could he not know the airline woes years ago and planned the way out. AJ get paid a lot of money to develop the company. does anyone think the company is improving.

and last but not least, if you were/are a shareholder, I am confident you are not happy with your investment. Isn't that the whole point of the business at the end of the day
FWIW , QF needs a fresh set of eyes with Staff /Media and most importantly Customer confidence to rebuild this once great Icon

 

[JohnPhelan]

His arrogance in grounding the airline completely shows his total disregard for the travelling public and his loyal customers and ultimately achieved nothing.

Actually, it achieved an immediate end to the (illegal) wild cat strikes and gave certainty back to his loyal customers. I disagree with some of the other things that he's done, but his actions on that issue vastly increased my level of respect for him. He was prepared to do what was necessary to fix the problem for the medium to long term, even at the cost of much short-term pain.

And welcome to AFF.

 

[bertair]

Have things too far gone to rescue Qantas whether Joyce goes or stays ?
Historically things probably went down hill from the days of Dixon and the typically Aussie "She'll be right mate"syndrome.
No enough lever pulling and pushing was done until it was too late.
As it stands a whole new business plan is urgently needed and maybe won't fix the problems anyway for Qantas to remain as we know it.
The days of air travel being a luxury and filled with frills and bling are gone forever, unless you fly in a private jet like a billionaire mogul, rock star or movie super star.
When you fly with a low cost carrier you see a range of passengers who would never otherwise get to fly (or some may say should never be allowed to fly !). But they are what keep many airlines still in the air while the likes of Qantas flap about wondering what to do.
I think that the trend will be to move away from club lounges, first class and elite services for the majority whether those who are used to it now as part of their loyalty packages like it or not. Airlines cannot rely on that level of business to underwrite their losses. many businesses do not need their execs. flying around when the internet and other communications can suffice.
Probably one class flying will be the way of the future and all in LCC airlines.
A revolution is happening in aviation and while many factors can be held responsible ( yes,unions and poor management are at the top of the list), all ideas of what an airline can be should be brought into the debate and not just the woes of what services and luxuries we are losing...
I think, as do many others, feel that Qantas is doomed to become a LCC, in fact why not just make the whole airline Jetstar and be done with it.
I don't like it, but I am a realist IMHO it is most likely going to happen.

 

[mannej]

Actually, it achieved an immediate end to the (illegal) wild cat strikes and gave certainty back to his loyal customers. I disagree with some of the other things that he's done, but his actions on that issue vastly increased my level of respect for him. He was prepared to do what was necessary to fix the problem for the medium to long term, even at the cost of much short-term pain.

And welcome to AFF.

A lot of people seem to be forgetting the impact of that union action in the lead up to the shut down.

 

[triple7]

It's easy to criticise A Joyce and the QF board whilst ignoring that he inherited most of today's problems. Yes, there were some 'unusual' decisions but overall he has done what was necessary. My concern is more for the dedicated staff that in many cases don't want to be bound by stifling Union decisions any more than you or I would.

 

[eastwest101]

It's easy to criticise A Joyce and the QF board whilst ignoring that he inherited most of today's problems. Yes, there were some 'unusual' decisions but overall he has done what was necessary. My concern is more for the dedicated staff that in many cases don't want to be bound by stifling Union decisions any more than you or I would.

However you want to measure it - market share, profitability, share price, dividends, investment, cash-in-hand, overhead costs, credit rating, route network reach, public and government relations, employee morale and onboard product (compared to their competitors) - if you compare the entire QF group now to back in 2008 by any of those measures - QF has gone backwards. Most people are saying that even if some of the problems were "baked in" by Leigh Clifford then 5 years is still long enough to turn around the business, or at least one of these performance indicators/measurements...

 

[moa999]

Given we seem to be at a political impass with QSA, how about something left field....


1. Remove the QSA

2. Replace it with a new Aviation Services Act.

International Ops of Australian airline
- Essentially no restrictions. If they want they can service planes overseas, have foreign pilot/FA bases etc, but must be at least 51% Australian owned
- This imho is needed if we are to keep any international operations against other low cost countries.
This helps to 'level' the international playing field, although there are obviously more issues than just maintenance and staff location (and wages)


Domestic Ops of Australian airline - which can be 100% foreign owned
- All maintenance (both line and major overhaul) must be conducted in Australia, subject to some caveats (eg fleet size under 5) and all pilots must be Aus based
This will obviously 'level' the domestic playing field - albeit by increasing the cost base of Virgin, Jetstar and Tiger
Should help alleviate unions concerns about job losses in international and probably boost aviation sector employment
Yes it will increase fares, but we need to accept that